Many of us dream of owning our own vacation home, especially at this time of year when winter is drawing near and the thought of heading off to sunnier climes is hard to resist. But, we’re worried. Is it really a good idea to blow so much money on a second home? Does it make financial sense? What are the benefits?
Worry no longer because we’ve put together a list of reasons why it DOES make sense to own your own vacation home…
If you look at these amazing vacation home rentals, you’ll see that they can fetch a pretty penny. Obviously, these are the cream of the crop when it comes to vacation homes, but it does show you what is possible if you invest in a prime piece of real estate in a desirable location.
A lot of people worry about renting their vacation home when they’re not there, but if you vet your guests, or have a third-party management company do that for you, it should be fine. You’ll get a decent second income and you’ll have a place to go when you need to get away from it all.
Cheap Vacations for Life
Imagine what it would be like knowing that you can head off for fun in the sun, or the shade if that’s your thing, whenever you like, only having to pay for gas or flights. It would be pretty great, right? That’s what a vacation home gives you - the freedom to get away and get some peace whenever the mood takes you at very little cost. Sure, you have to maintain the home year-round, but you can pay for that and make a profit by renting your vacation property out when you aren’t there. You could even rent your main home on Airbnb while you’re at the vacation place to make money all year round wherever you’re based!
Invest for the Future
Although there are no sure things when it comes to investments, real estate is a pretty safe bet, especially real estate in desirable areas like the coast, so investing in a second vacation home could be a great way of investing for the future. Your vacation home can be used as often as you like for as long as you like and then sold should you want to bolster your retirement fund. You could also move in and sell your main home, or even release equity in one or both properties so that you can still enjoy them AND give yourself a quick cash injection.
You can get big tax breaks on real estate and this can be as true for your vacation home as it is for your main residence. If your vacation home is used solely as a second home for you and your family, you may be able to deduct your property taxes and mortgage interest, making for a very shrewd investment. Of course, you should always check your entitlements with the IRS before you go ahead, just to be sure.
Put simply, owning a vacation home just makes sense.