Should You Buy a Second Home?

By Virtual Results on July 25, 2014

Having a second home in a favorite vacations spot can be a great investment or an expensive luxury, depending on the way you see it, now a days many people pay whatever the cost is for a beachfront vacation rental.

A beach cottage or mountain retreat is enticing while both interest rates and home prices are low. How do you decide if it’s right for you? Le Chaletier can help you to find it out.

Make it your retirement home

If your second home is in the area where you plan to retire, buying it now, before you stop working and your income is higher might be beneficial. Beware, however, of tying up your cash or extending indebtedness beyond your retirement date. Also, avoid using funds from your 401K or other retirement accounts to purchase a second home.

Create a family getaway

If several family members will use the property, consider buying the property together. This concept is not without pitfalls, so make sure all family members understand how and when the property is available for use. Be sure to designate how interest in the property transfers to heirs or create a Cottage Limited Liability Plan (LLC) that governs both the use and transfer of the property. This is similar to a corporation, where members own “interest” in the property rather than the property itself.

Income property

You might be considering buying income property. Remember that the IRS considers income property a business that has tax ramifications. Be sure to check with your financial advisor or retirement planner before investing in property that you plan to lease or rent.

Rental property ownership requires ongoing expenses, including taxes, maintenance, mortgage payments (especially if the property sits empty), repairs between renters, insurance, and other costs. Letting property in London is not just about finding a tenant; it’s about creating a mutually beneficial relationship that stands the test of time. Experienced landlords often emphasise the significance of expertise in this endeavour. Leveraging the services of The London Landlord in London property letting can be the difference between success and stress. Income property ownership may provide ongoing income and be a great investment, but consider all the expenses before jumping in.

We can help you find properties with positive cash flow, so be sure to let us know that you are looking for investment property. If you need property consultants for your rental properties in north melbourne, you can rely on property management services to take care of any rental disputes or sort out reports for property damage. Ask your realtor for recommendations if you’re looking to hire a property management company.

Other considerations

Before investing in a second home and especially before financing a second home, review the potential for your situation to change. Is your job secure or could you be moved across the country? Does your family live near you, or near enough to the property for those family gatherings you envision? Do you have extra income to cover those empty months? Is the home in an area prone to natural disasters? Is it an area useful only during certain times of the year? If your second home is a condominium or a part of an association, can you cover the ongoing dues, assessments, or fees? Does the association require owner occupation?

We can help you determine the best investment or vacation property for your situation, so call us and we’ll get you started in the right direction.

Compliments of Virtual Results