The phrase “buyer’s market” has probably been driven into your head by now. For those who are looking to move up to a larger home, or those on the look out for their first home, the time is right. But another market has also been blooming for those already comfortable in their current housing situation; the second home market.
“While the second home market has seen more highs and lows lately than the primary home market, vacation homes are a trend on the rise,
says Todd Hetherington, CEO of Century 21 New Millennium.
These homes, often purchased in appealing areas or destination locations, can be used as summer homes and for weekend getaways, or can even be rented out for extra income until you are ready for retirement or decide to sell. “At a time when prices are low, now is the time to consider buying a vacation home an investment,” Hetherington states.
Some of the tax benefits of a second home are similar to those for a primary residence. Additionally, you will most likely obtain some substantial appreciation in the price of the vacation home as the years go by, and if you sell the home, any gain from that sale would likely qualify as a tax-favored, long-term capital gain, Hetherington explains.
However, before you jump right into purchasing a second home, there are a few key things to consider, Hetherington warns. “Take a look at your finances and determine if you can afford to carry two mortgages, maintain two households, and pay the extra utilities and maintenance costs,” advises Hetherington. If you plan on renting the home, consider what would happen if you were unable to find tenants for a period of time. Could you financially sustain the property? Also, look into financing requirements and options, as they often differ between second and primary properties.
“If it is financially feasible, purchasing a second home is a great investment, regardless of whether you decide to use it as a family destination, rent it out, sell it down the line, settle in for retirement, or any combination of the above,” says Hetherington.
CENTURY 21 New Millennium. Smarter. Bolder. Faster.
CENTURY 21 New Millennium, www.c21nm.com, is a full service real estate brokerage company specializing in residential and luxury properties. The Virginia locations are in Alexandria, Centreville, Culpeper, Fredericksburg, Gainesville, McLean, Stafford, and Woodbridge. The Maryland offices are located in Annapolis, Dunkirk, La Plata, Lexington Park and Lusby. Its core services include: mortgage financing, investing, settlement services, property management, property insurance, global relocation assistance, and commercial real estate.