Ever Thought of Buying a Second Home? It’s High Time You Did
Whether or not buying a second home is a good idea has always been a subject of debate. And looking at the percentage of American families that own a second home, around 6 percent, you might deduce that owning a second home is not a great idea. We, however, have a completely different view and have more than a few reasons to encourage people to invest in a second home. Come let’s take a look at some of the biggest benefits of owning a second home that might compel you to buy one too.
An Alternate Source of Income
Rent from your second home is one of the obvious benefits of owning a second home. You can also use the rent to pay off your monthly installments. Initially, the rent may be a very small part of your monthly installment, however, with time as your monthly rent would increase, you will be able to pay a substantial part of your monthly installment from the rent amount.
A Home Away from Home
With the concept of vacation homes on the rise, an increasing number of people are buying second homes as a vacation home where they can spend their vacation. A vacation home not only allows homeowners to decorate the home the way they want, but it’s also a cost effective way of spending your vacations, considering the high hotel room rates.
A Contingency Asset
If you are one of those people who wouldn’t save until they are forced to save then investing in a second home is a great way to save money in an appreciating asset that would come handy in case of an emergency. You can also use your second home for future milestone’s such as your children’s education, marriage or retirement.
Let’s say you took a home loan to buy a second home in Texas, while you already had a home loan running on your primary home. In this scenario if your total home loan is less than $1million and your home equity is not more than $100,000 then you are eligible for tax deduction on all the interest you pay annually towards your home loans. Besides this you can also exclude a portion of your capital gains from selling your primary home, if you start using your second home as your primary home (for at least two years).