So…you have some equity built up or finished paying for your primary residence and you are wondering whether it makes sense to buy a second home. Many homeowners who live in a large city like Boston, may be looking for that second home in a surrounding cities such as Cohasset or Weymouth. Some choose to purchase a second home so they can have a vacation style getaway and purchase a beachfront condo in Panama City. You may want to retire to the music life of Austin TX. There are many reasons someone may choose to invest in that second home; below are some of theadvantages that come with owning a second home.
Second Home As an Investment
The first is that it is an excellent form of investment. Stocks and other such assets fluctuate in value all the time and you can never be sure that you will make a profit. A home, however, is an investment that you can rely on to increase in value over time. If you have a long term project, such as sending your kids to university, you can buy a second home so that when the time comes you can cash in for the necessary funds.
Second Home as Source of Extra Income
A second home is also an excellent way to make money every year. With the massive popularity of Air BnB – it has become even easier to leverage a second property for income purposes. You can rent it out or lease it for a good amount of money which you can use to fund your other projects. If you plan to use it as a vacation home you can plan it in such a way that during the time you want to go on vacation the home is empty.
Second Home For Tax Savings
If you don’t plan to rent out your home you may be in a position to see significant tax savings. So long as the home is not occupied for more than a couple of weeks a year the property taxes are deductible from your gross income. Depending on your specific situation, there are many potential ways to leverage a second home as a tax writer. Needless to say, you should defer to a tax professional before writing that offer.
Some of the Possible Tax Advantages
A Second Home as a Vacation Home
A second home provides you with a familiar place to go when you are on holiday. You will not have to worry about the hassle of staying in hotels and eating hotel food. You will have your holiday the way you like it – you can come and go as you please and you can eat whatever you like. If you have small children it is a particularly good idea because children don’t do very well when they are cooped up in hotel rooms. You will also enjoy a high level of convenience – you don’t have to worry about packing because you can store items in your second home. When the time comes for your holiday all you need to do is travel to your second home – you will not have to worry about packing and unpacking. A second home is also a great place for gatherings – once or twice a year you can have the whole family come together and enjoy some time away from work.
A Second Home for Retirement
Lastly, if you want to retire well there is no better way than to choose a second home in a nice city. When the time comes you will sell your first home and the money that you make will go a long way in helping fund your retirement lifestyle.
There is no doubt that owning real estate is the #1 way that the average person can acquire wealth in the United States. If you can make it happen — it is always recommended to invest in real estate.
Find a good real estate website — start searching. Do the math. You may be surprised what you are able to do.