FirstPrev Page 1 of 1 NextLast

Why Buying a Vacation Home Is a Savvy Investment

Added: Jul 11, 2021
Category: General

Four Reasons Buying a Vacation Property is a Savvy Investment

Looking to buy a vacation home? There are many benefits of this type of investment. Keep reading to find out how you can reap the rewards that come with a second home.

Mortgage-Interest Tax Deduction

Whether you rent it out or not, you can deduct the mortgage interest as long as you use the home more than 14 days or more than 10 percent of the number of days the home is rented annually at a fair rental—whichever is longer.

Qualified second homes include houses, condominiums, cooperatives, mobile homes, house trailers, boats or similar properties that have sleeping, cooking and toilet facilities.

Here's an interesting twist on the mortgage interest deduction: if you take out a home equity loan on your first home and use the funds to acquire your second home, the interest on the home equity loan is also deductible. That's three mortgage interest deductions off your tax return!

Consult IRS Publication 936 for a complete discussion of how mortgage interest for a second home is deductible.

Purchase Your Future Retirement Home Now, at Today's Prices

Though your second home may be a vacation home now, if you buy right you can convert it into your principal residence later. This way you can lock in the price of the home you'll retire in at today's market prices.

Vacation Homes Produce Their Own Income

Renting out a second home occasionally or often can help you pay for the property with OPM (other people's money). Check with your tax advisor about how much of the upkeep and management expenses are deductible against your income.

Although you may be able to generate rental income from your vacation home, it may not cover your ownership costs. (If you want to try real estate investments, give us a call to look at properties in the local area).

Consider Different Styles of Properties in a Vacation Area

To minimize upkeep and have a more secure environment, a condo may be preferable to a single-family home. If you plan on converting it into a retirement home, consider what type of home you'll want as a full-time residence.

Continue Browsing

FirstPrev Page 1 of 1 NextLast
[Expand]General (3)
[Expand]Specials (2)
[Expand]Things to Do (4)
[Expand]Travel (2)





Don't miss out! Be the first to comment.



Powered by CiiRUS Property Management Software