Owning A Second Home Is Easier Than You ThinkBuying a second home is a serious financial commitment, but it is can also lead to a feeling of complete freedom. It can provide you with a vacation home, a place to escape from your mundane routine and an investment in
future for when you retire. Aging and wealthier households, smaller families and new technologies that allow professionals to work from remote places are all significant demographic trends. These trends indicate that buying a second home is becoming a more reasonable option for many Americans. The recent changes in tax laws are also making second home purchases more affordable. Strategically planning your purchase, consulting a trusted professional and taking your time are keys to making perfect investment.
Strategies For Retirement Investments
Planning for retirement early is smart, especially now. Many experts believe that as Baby Boomer generation gets closer to retirement property values will increase at a rapid rate. More people will be buying second homes in high demand locations so locking in a lower price now can save thousands. If you are buying a house you want to retire in later be certain to consider all possible changes and growth for area. Many times development and increased populations change face of a seemingly perfect location within just a few years. Another alternative to consider is investing in a home and using it as rental property first. At retirement you can choose to improve and make rental home your primary residence. You can then sell or exchange and buy retirement home of your dreams.
Tax Advantages Can Be Found Everywhere
Regardless of avenue you take to invest in your retirement, IRS offers tax advantages in a wide variety of ways. Mortgage interest and local and state real estate taxes are all deductible if you live in your second home a portion of year. Write offs are limited to two homes. If you rent home for less than 15 days you do not have to claim rental income or pay taxes on it. If you rent your second home more than 15 days you must report rental income. However, now all of expenses used to run property are deductible. Property taxes, interest, insurance, repairs, utilities, supplies, cleaning and maintenance are all considered expenses. Equity in your first home can also help with purchase of a second home as a retirement investment. A home equity loan or line of credit can be used to cover down payment on a second home. Be aware however, that borrowing in this way only allows first $100,000 of equity debt to be written off.
