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2013-02-02 20:46:34
Owning a Second Home Pros and Cons

Owning a second home. It’s one of the great American dreams, right? It symbolizes freedom and the ability to travel and vacation, to see different sights and just get away from it all whenever you want, all without sacrificing the familiarity or comforts you’re used to. There are so many perks to owning another home.

Pros and Cons of Owning a Second Home

But is there a downside to owning a second home? What do you do with it when you’re not there? What are the maintenance costs? And how often will you really use it? Some of these important questions are answered it the following list of pros and cons of owning a second home taken from a recent article on MoneyCrashers.com.

Pros

  1. Long-Term Profits: If there’s one thing we’ve all learned from the economy the last few years, it’s that nothing is a sure thing. In the past, buying a home (or second home) has always been seen as a good investment. Recent times have proved otherwise. And yet, with the market evening out, the pendulum is beginning to swing that way again. Of course, there are no guarantees that your second home will increase in value, but buying a vacation home in the right area is once again being seen as a fairly solid long-term investment.
  2. Tax Deductions: Depending on how and when you use your second home, you may be able to use it as a tax deduction.
  3. Rental Income: Buying a second home in a popular tourist destination allows you the opportunity to bring in rental income when you’re not using it. This income can offset the mortgage and other expenses, while still allowing you to enjoy all of the other benefits of home ownership.
  4. Familiarity: Your furniture. Your dishes. Your closet. Your own space. There are a lot of unknowns when you go on vacation. What will the hotel be like? Do I need to bring this or that, or will it be provided? Will there be enough space? Owning your own vacation home takes the guesswork out of traveling. It also allows you to become more familiar with an area and enjoy all it has to offer.
  5. Convenience: If you live on the beach, but vacation in the mountains, it can be a pain hauling your gear back and forth. Not to mention finding a place to store it in your home. With a second home, you can keep all your “vacation gear” in your vacation home and save yourself the hassle.
  6. Retirement Head Start: We’ve all heard of people who retreat to warm destinations during the winter, or hole up in the mountains during the summer. Whatever your pleasure, owning a vacation home opens the door to that option when the time is right.
  7. Location for Gatherings: Much like a home is filled with memories, returning to the same place for vacations can allow families to create lasting treasured remembrances.
  8. Access to Other Vacation Homes: If you decide you want to visit another locale for your vacation, you can use your second home as a bargaining chip. Home owners are always looking to swap vacation properties for a week or two to experience new and different places.

Cons

  1. Initial Purchase Costs: Purchasing a home in a popular destination can result in a hefty price tag. Especially if you want your home to be equipped with high end finishes and all the bells and whistles.
  2. High Cost Mortgages: Because of the recent housing crisis, lenders are more strict about loaning money, especially when it comes to second homes. A healthy credit history and 20-30% down are typically necessary to get a mortgage on a vacation home.
  3. Home Maintenance: Maintaining a home you don’t live in, or even near, can be tricky. If no one is there on a regular basis, a problem can go unnoticed for long periods of time.
  4. Travel Time: The amount of time it takes to get to your second home will influence how often you use it. While you may have ideas about flying in every other weekend, when reality sinks in and schedules get tight, you may find yourself vacationing less than you had planned.
  5. Inflexibility: We’ve all done it. We go on a vacation to a dream destination and the next thing you know we’re checking out real estate and fantasizing about living there. Before you take a leap and commit to your second home, make sure you’re not just living in the moment, but will really enjoy returning to that same destination year after year.

Owning a second home can definitely be a dream come true, if you think through the pros and cons first, and go into the process with a plan.

 

Call Nick Coleman at 435-640-7781 or email [email protected] to find your dream Park City Home.

Follow Nick @ParkCitySold

 
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