Whether as an investment or a getaway, buying a second home comes with a wide range of benefits. Not only can a second property act as a place to relax with friends and family, but it also offers some surprising financial advantages. Before you contact a Real Estate Agent
have a look at the informative guide below to learn more.
What Are the Perks of Purchasing a Second Home?
1. Tax Benefits
Depending on the level of maintenance and improvements needed, you can deduct the interest on a line of credit or home equity loan from your taxable assets. Similarly, if a purchase raises your total debt level to over $1 million, it may be possible to write off the interest on your loan payments.
There are additional perks if you plan to rent out a second home. If the property is used as a rental for more than 14 consecutive days in a year, you might not have to pay taxes on the income, and any improvements made to accommodate the residents can also be tax-deductible.
2. Rental Opportunities
If a Real Estate Agent sells you a second home in an area popular with tourists, make the property work for you by renting it to guests. Use this income to make mortgage or loan payments, invest in upgrades, pay HOA dues, or improve personal finances.
If you rent out the property on a consistent basis, you can generate an annual profit, even as you retain a convenient vacation home for your personal use.
3. Long-Term Appreciation
Unlike many other large purchases, owning property is a reliable, if low-return, investment. While the house itself may depreciate in value over time, the land beneath it will appreciate. As a result, your initial investment can be a viable long-term financial prospect. Potential purchasers will be interested in your home’s location and square footage for later construction or development.