You get a great sense of pride and satisfaction when you put your feet up and enjoy a different view from your newly-acquired vacation home.
Buying a second home is not just about enjoying a change of scenery as you are also likely to be enjoying a number of other benefits too.
Here is a look a why you might want to buy a vacation home, including some tax benefits to consider. There are also some tips on how to choose the right home and an overview of why you need to apply for the right finance when buying a vacation property.
Get your finances right
The golden rule whenever you are thinking about buying a vacation home is to have a budget and always stick to it.
It is easy to get carried away with the excitement of finding a dream home that you would like to buy, but you really do need to know exactly how much you can afford to commit to spending comfortably.
Remember that there are associated costs attached to buying and owning a second home, which you need to budget and plan for, both now and in the future.
It would be better to get a professional opinion on your finances beforehand. This way you will be able to bid for a property with confidence, knowing that you have the resources to afford the deal.
List of priorities
In order to reach your decision as to where you would like to buy a vacation home, it makes sense to take the time to write down a list of preferences.
If you definitely want to be within easy reach of the beach or want to be close to downtown restaurants and nightlife, these priorities will help you to draw up a shortlist of properties that fit the bill.
If you are going to buy a second home you want to choose a place that you will visit regularly and get plenty of enjoyment from, so take your time deciding exactly what you want.
Change of plan
If you buy a vacation home for your own family to use, you need to be aware that if you have a change of heart or circumstances and don’t end up using the property as often as you had envisaged, you might not be able to rent out your vacation home instead.
If you take out a mortgage to buy your second home, the lender might require you to switch to a more expensive loan if you use the property to generate a rental income. You might also find that are some local restrictions on renting out your home.
Decide exactly how you are going to use your home and get the right finance for its intended purpose, or you might have some issues with a change of plan at a later date.
Make the most of the tax benefits
Buying a second home could open the door to some worthwhile tax benefits as well as providing you with a potential place in the sun.
It is possible for instance, that some or all of the interest you pay on your second-home mortgage could be deductible. You might also be able to deduct your property taxes for your vacation property.
It is always best to get a professional opinion when it comes to taxes, but there are potential tax benefits available that could make your second home seem even more attractive.
Faith Parkinson is a property portfolio consultant. She enjoys following the movements in the property market. Her writing mainly focuses on property and lifestyle.