Residential real estate has strong investment potential, but this is not the only reason many Americans are choosing to invest in second homes. While certain factors, such as the strength of the real estate market in your area, might help you determine when the time might be best to buy a second property, there are many clear benefits that come with doing so.
Here’s a closer look at seven reasons to consider investing in a second home.
1. It Has Tax Benefits
Owning a second home allows you to take advantage of certain tax breaks. More specifically, you may be able to deduct mortgage interest, property taxes and rental expenses from any homes you own. The exact tax breaks to which you may be eligible may vary based on whether your second home serves as your primary residence, among other factors, but these tax breaks may add up, leading to significant savings over time.
2. It Generates Vacation Rental Income
Depending how often you use your second home and where you choose to buy it, you may have the option of renting it out and generating money through rental income. This may help you pay the mortgage on the second residence, and it may, too, help offset any expenses relating to depreciation.
3. It May Appreciate in Value Over Time
While it is difficult to predict where the real estate market is going to go each year, real estate tends to appreciate over time better than vehicles and most other investments. Typically, the longer you own a second property, the more you are going to see it appreciate in value.
4. It Gives You a Designated Vacation Destination
With all the financial benefits that often accompany buying a second home, you might forget about the other perks that come with owning another property – especially if it is in an in-demand location. Many people invest in second homes to have a designated place to take their families on weekends or vacations.
5. It Helps Diversify Your Assets
Investing in a second home helps you diversify your assets, which in turn reduces the risk of financial losses in other areas. This may come in handy if one or more of your other investments fail to produce what you thought they would.
6. It May Help You Access Emergency Funds
Having a second home may also prove beneficial if you face a financial emergency and find yourself needing cash fast. To free up cash quickly, you may be able to access your second home’s equity through a home equity loan while leaving your primary home untouched.
7. It May Bring You Closer to Loved Ones
Many people buy second homes as they age because they want to have a regular place to stay when visiting adult children or grandchildren. Your second home may also be able to double as a vacation property for other loved ones visiting from outside the area.
Explore Your Options
Discover the possibilities of having a vacation retreat or investment property that can provide both enjoyment and potential financial gains. Whether you're looking for a cozy beach cottage or a mountain getaway, Chapel Hill Realty can help you find the perfect second home that matches your needs and preferences. Don't wait! Call Chapel Hill Realty today at (919) 740-0884 and let our experienced team guide you through the process of finding your dream second home.