The decision to purchase a second home is a huge one. It should not be taken lightly. You will want to weigh the pros and cons carefully before making a final decision.
A Personalized Vacation
By purchasing a second home in one of your favorite locations you’ll always have a place to vacation. It will eliminate having to book rooms or deal with peak season pricing. You will also have plenty of space to invite friends and family along.
Best of all you can decorate and stock the home with your own tastes and needs in mind. This makes packing for a vacation a simple task as you’ll have much of what you use already there.
Even if the second home is bought as a vacation home, you won’t be there the majority of the year. This provides the opportunity to rent it out to other travelers, bringing in additional income. This money can be used towards the house expenses. If you rent it out for at least two weeks each year, you can claim many of the home’s costs as a tax deduction.
Like with all real estate, a second home can appreciate over time. Remember to buy smart. Look at the purchase as an investment, and don’t over pay by using your emotions to make the decision.
A Jump Start on Retirement
As you return to the second home for vacations, you’ll become familiar with the people and places there. If this is an area, you are already dreaming of for retirement, you’ll be well on your way. It will already fell like home, it’ll be familiar, and chances are it will be paid for, allowing you to use the money from the sale of your main home for other retirement expenses.
This is the number one down fall of a second home. Along with the monthly payment, you will be responsible for repairs and maintenance, property taxes, utilities, and insurance. These may seem especially high if the home is unoccupied most of the year. Screen potential renters carefully. You want people who will respect the property rather than incur additional costs.
Limits Vacation Opportunities
With all of the expenses that come with a second home there won’t be much money left over for traveling to new areas. Keep in mind that even if this second home is in a favorite spot of yours, it can become dull year after year.
Although there are more pros than cons when it comes to buying a second home, the cons are very important. You will want to think about this decision for some time before jumping in to the additional costs it will produce.