There are countless reasons why someone would want to buy a second home, but some reasons are definitely a little better than others. For instance, a second home can be an amazing investment if done right.
Of course, the moment that you mention to someone that you have been thinking about making the plunge and buying a second home, everyone suddenly becomes a real estate expert and has countless unwarranted (and unwanted) opinions. If you have been wavering between buying and not buying, here are a few reasons why you probably should consider signing those papers and nabbing that second property.
Let’s Talk Investments
Since we already mentioned it, let’s talk about how buying a second home could be a fantastic investment. Purchasing things like stocks and gold is always a good idea, but putting money into something larger, like a property, can yield much larger returns. However, it’s important that you have your financial ducks in a row before putting in any type of offer on a home.
For some, the capital is ready and waiting, but for many of us, it’s crucial to find an alternative form of financing. What are you going to do if your bank denies your request for a loan? It’s important to consider all of your options—and don’t forget to look locally. If you want to buy in Northern California, opt for Redding hard money lenders; if you’re in upstate New York, look into NY-based angel investors. Consider your locale and find lenders in the area who know your market and can provide the amount of funding needed for your investment.
Let’s Talk Tax Benefits
No one actually enjoys paying taxes—but what if we told you that buying a second home might actually offer some nice tax benefits? Generally, when you purchase a second property, you get some tax benefits on the interest payment on your home loan.
Let’s Talk Rentals
Whether you have a day-to-day job or you retire and still want income rolling in every month, renting out your second home can bring in a lot of spare change. If you are purchasing the house with it being a rental in mind, you need to consider the location and overall style of home. After all, a cute little one-bedroom cottage in a beach town is going to pull in a lot more revenue than a five-room estate in the middle of nowhere. Another great perk of renting it out is that you can use it as a vacation home for yourself and your family.
Obviously, this is dependent on the style of rental it is (meaning, is it a home someone rents for years at a time or is it a vacation rental that people rent for short periods of time?).
If you handle the rental correctly, you might even end up purchasing several homes to then rent out. Bring in enough income and you can retire from your day job way earlier than you planned.
Let’s Talk Retirement
Since we just touched a little on how a second home could act as a rental to bring in income after you retire, you can also choose to retire to that second home that you bought. If you want to go this route, make sure that wherever you purchase that property is somewhere you would like to retire to. Maybe you want to settle down after retirement in the town you grew up in, or you have always dreamed about running away to Hawaii after finally leaving your day job. Just make sure that you think long and hard about where you’d want to live out those golden years.
Let’s Talk Family
One of the best reasons for buying a second home is that you and your family will be able to enjoy it for years to come. It can be used as the central hub for family reunions, a vacation getaway for you and your loved ones, and something you can ultimately leave to your children and pass on after you…well, pass on. A second home is a wonderful way to make memories with loved ones, so what are you waiting for?