Buying a second home is a fun way to lock in a perfect vacation destination and make some extra rental income. There are also some financial considerations to weigh before making your decisions that many homeowners aren’t aware of before they purchase their second home.
If you rent your second home more than fourteen days a year, the IRS qualifies that home as a rental/investment property. As such, the income you gain from your home is taxable. Your second home doesn’t qualify for the same deductions as your primary home.
Risk & Liability
It’s easy to overlook problems like leaks and water damage in a home that goes unoccupied for long periods of time. Empty homes are also more likely targets for vandalism. Hiring a property management company to keep an eye on the home can help ensure you catch potential problems before they get out of hand.
Expenses like home insurance, security monitoring fees, and utilities can add up in your second home. You will also have annual maintenance costs and repairs over the years.
Understanding the expenses involved with owning a second home is an important part of purchasing your next home. When you consider all the pieces and parts to the puzzle it will help you make your plan. Vacation rental services like Airbnb make it easy to cover the costs of owning a second home or even profiting from it. You can also use remote monitoring technology, such as video doorbells, access control systems, and environmental monitoring to minimize the risks while you are away from your home.
Buying a second home can be a great investment, just be sure that you are well informed before you commit yourself. For more information about buying a second home or an investment property, give us a call at RE/MAX Capitol Properties 307-635-0303!