Whether you’re looking to purchase real estate as an investment or in need of a place you can escape to when the day-to-day gets to be too much, buying a second property can provide amazing benefits to your lifestyle and your wallet. As with any big purchase, you should go in with a clear idea of exactly what you are looking to achieve, particularly in the long run. Read on for some important factors to consider and some of the big perks that accompany owning a vacation home.
Financial Benefits
Owning a vacation home is an excellent way to build equity through a long-term investment. If you and your real estate advisor do adequate research into what’s the right type of property, the best location, and how you intend to utilize the property in the future, you can see incredible gains from not only renting it out but also eventually selling it for more than what you purchased it for. Understanding the market goes a long way in making a smart purchase.
Lifestyle Benefits
Apart from the potential of using the property as a rental or seeing a significant ROI (return on investment), a second or third home can serve as an amazing personal vacation getaway. Consider whether you want a place close enough to drive to on the weekends or a more distant, different locale than the one your full-time residence is located in. Either way, knowing you have a home away from home to escape to you when you need a break from your everyday worries can add immense value to your life. It could even be a great way to slowly transition to a new city and see if you’d like to settle down there either in the near future or in retirement.
Pros (And Cons) of Renting the Home Out
If you’re planning to rent out your home, it’s important to have a firm grasp of the associated benefits and time and work that go into that process. As far as benefits go, renting your home will bring in additional revenue that will help you in paying off the mortgage. Also, you’ll receive tax breaks which could be particularly helpful if you’re planning on making major renovations to the home. However, the time, labor, and sometimes stress that accompanies renting out a home should also be considered. A property manager can help take some of this off of your plate, but be prepared to lose out on some of your revenue as you’ll have to compensate them. It’s all about figuring out what will work best for your specific lifestyle and needs.
Best Locations for Rental Properties
When it comes time to pick where you’d like to purchase your investment property, you should decide if you would like to also use the property when it’s not being rented out. If so, make sure you’re purchasing in a place that you’d enjoy vacationing in. In terms of ensuring it’s a profitable venture, you’ll want to take a look at cities that not only present as a desirable place for people to rent long-term or short, but also cities with properties you can afford to purchase and are on an upward trajectory, promising you an eventual return on investment.
Purchasing a vacation home can seem like quite the undertaking, but you don’t have to tackle it alone. An experienced broker will be able to guide you on the exciting journey, providing market knowledge to help you in making your decision and leading you towards the investment of a lifetime.