Imagine escaping to the comfort of your beach condo or cozy lake cottage. Buying a vacation home ensures there’s always a place to go with family and friends – no hotel required. If you’re ready to make the investment, congratulations! You can look forward to years of great memories in a location you love. Plus, you’ll enjoy these key financial benefits.
Your vacation home is more than just a fun place to relax. It’s a long-term investment that could grow your wealth and diversify your portfolio. Equity on your home can build over time as you make mortgage payments, depending on the loan type. Just make sure your new home comfortably fits your budget – so you can grow your wealth and enjoy a convenient vacation, too.
Vacation homes could grow in value depending on appreciation in the real estate market. Like with any investment, there’s no guarantee you’ll be able to sell your home for more than you purchased it. However, vacation homes in popular locations could see prices rise over time. It comes down to supply and demand. Beautiful mountains, beach views, temperate climates and lakeshore properties are highly valued, but geographically limited. There’s only so much coastline to build on, and only so many homes to sell.
Do you plan to eventually live in your vacation home full time? There are a few advantages to purchasing your home years – if not decades – prior to retirement. And after years of mortgage payments, you can start retirement with more equity in your home.
Say goodbye to hotels and timeshares. Your vacation home makes it easy for family and friends to gather in one place without worrying about the expense. They can happily forgo the cost of lodging and eating out for every meal.
There are potential tax deductions for second homes, but they vary depending on how you plan to use your property. Will you retire there for over six months each year? Will you be renting your home for two weeks or more each year? Do your research and consult a tax professional for personalized advice. Tax laws can be complicated, but the hassle will be worthwhile if you can save each year.
Good luck with your search for the perfect vacation getaway. For help navigating the house hunt, talk to a mortgage loan officer today!