The mountains… The shore… A secluded island in the Caribbean… It doesn’t really matter where you go to relax. If you love a place enough to return year after year, it may make sense to buy a vacation home you can call your own. In many cases, you can put the equity you’ve earned in your primary residence to work to help make your vacation dream come true. Here are some considerations to keep in mind when you’re thinking about buying a vacation home:
- Location: Is it close enough that you’ll be able to use the property often? You’ll pay a premium for a home in a vacation hot spot, but you may command a higher rental price if you want to offset some of your costs.
- Repairs: If the house needs work, consider whether you’ll earn your investment back. Updates to kitchens, bathrooms, HVAC systems and roofs can all be costly.
- Maintenance: Maintaining the property helps protect your investment. If you don’t live nearby, you’ll need to contract with someone to keep the house in good shape and looking lived-in.
- Tax implications*: You can deduct mortgage interest on a second home—that is, if you use it at least 14 days each year or one day for every 10 days it’s rented.
* Consult your tax advisor.
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I encouraged my relocation buyer to consult with Trident Mortgage because we were making an offer on a highly competitive property. For several reasons it was very fortunate that he chose Trident. The seller recognized and trusted the local Trident name, the mortgage officer, Mike Lee was very resonsive to both the buyer and myself as the agent but ultimately, we were so grateful to Trident because we had a last minute addendum on Sunday evening. Trident Mortgage and Trident Title working together were able to change the CD, get it back through underwriting and complete settlement within an hour after our planned closing time of 9:00am on Monday morning!~ S.P.