Why Owning a Second Home is a Smart Move Now
Believe it or not, owning a second home is not just for the wealthy. With mortgage interest rates still under 5%, purchasing and maintaining a second home is more affordable than you might think.
There are many reasons for buying a second home, but the most common is to create a retreat away from the stress and routine of normal daily life – a vacation oasis. Being able to get away to a new environment that is also familiar and comfortable is relaxing and restorative. Many families find that second homes are where memories are made, where generations can gather and reconnect. Sure, you can take vacations together, but returning to a home that you’ve visited through the years and where you’ve shared special times is even more enjoyable than a cruise or group tour somewhere.
Of course, the ability to customize and furnish your home to your taste is a big advantage, too. You can decorate it to match your style and preferences, rather than having to make do with what’s in the Airbnb you’re staying in.
There’s also the convenience factor. By owning a second home, you can safely store all of your sports and vacation equipment there, rather than having to lug it with you every time you visit. This is especially handy when we’re talking about larger items, like skis and snowboards or stand-up paddleboards and fishing rods.
On top of the ability to create a vacation retreat, owning a second home does have its financial advantages, too.
All the mortgage interest and property taxes on a second home are tax deductible – the same as for your primary residence – up to $1 million in value. That $1 million covers the value of all your real estate and any improvements you’ve made.
You can even rent out your second home for up to 14 days a year and still keep all the deductions. However, if you rent it out more than 14 days, you’ll only be able to claim a pro-rated portion of the interest, taxes, and expenses on your tax return.
And as an investment vehicle, second homes are more likely to hold their value than other, more volatile, instruments like stocks, bonds, and cryptocurrency. This is especially true if the home is located in a popular vacation destination or major city.
However, a second home doesn’t have to be in a resort town to make sense. In fact, reports indicate that second homes located in larger cities are an even smarter buy, especially if you hope to rent it out. A USA Today article found that popular cities frequented by business visitors and vacationing families can provide plenty of opportunities to rent out your home on a regular basis and earn a decent income stream.
So if your goal is to invest in a second home and rent it out for income, you can do quite well even if it’s not near a mountain, popular amusement park, or beach.
If you are interested in finding your own second home, please contact one of our luxury experts at Portfolio Real Estate.
600 E Market St, San Antonio, TX 78205 | $3,500,000 | Listed by Kevin Crawford
610 E Market St, San Antonio, TX 78205 | $829,000 | Listed by Paulette Jemal