With the low property prices and affordable mortgage lending rates available today, it’s an excellent time to consider buying a vacation property. Home prices all over the country are up to 30% below what they have been over the past two years. If you find a vacation home that you love, there’s a good chance that you’ll catch it at a great low if you act now.
The question is, though, is buying another home really a good idea?
How a Vacation Home can be a Sensible Idea
If you live a busy life and frequently consider doing away with your vacation simply because you can’t find the time or the budget, a second home is a great idea. There’s ample scientific proof in existence to show how important vacations are to better mental health, job performance, family bonding and general creative thinking. When you have a second home, going there whenever you have the chance will become second nature. You won’t find yourself wondering as much about skipping it.
If you’re looking for more tangible reasons, here are a couple of important ones.
There’s Money to be Made Out of a Vacation Home
Long-term profitability: Vacation homes are popular. If you pick one in an undiscovered location today and hold onto the property, it’s a safe bet that it will appreciate in value. If you decide to sell one day, or at least borrow against your home, you may have plenty of equity.
There are tax deductions: Many second homes remain unused year-round when their owners aren’t vacationing. If you decide to let your property out to tenants, though, you will be able to claim tax deductions on your mortgage and property taxes. You’ll enjoy a lower tax bill.
The rental income that you make can considerably lower your mortgage burden, as well.
If you’ve decided that it’s the Right Time to Buy Now
If you see that buying a vacation home makes sense, you need to follow the right process to land on the best choice of property.
Think about your goals: Your vacation home could also double as your retirement home if you plan to hang up your hat in a few years. Alternatively, you may want your vacation home to be a place that you can use when you are away on business or visiting family. Before you decide on the location, you need to think of all the different kinds of use that you will put your home to.
Think investment: It takes research to identify parts of the country where property prices are likely to appreciate. Before you actually buy, it’s always a good idea to also try the place out first. You can get a rental in the area to get a feel of the place.
Research the rental possibilities: If you plan to make a rental income out of your property, you need to make sure that your plans will work out. If it’s a community that you’re buying in, you should ask about the rental rules in effect. Many communities have rules against rentals. If it is a regular house, you need to ask a local real estate agent about the prospects.
In general, working with a good agent is an excellent idea if you will be far away most of the year. An agent can help you manage your rentals, maintain your property, and in general, make the most of your investment.