If you’ve been tossing up the idea of investing in a vacation home, one of the most important things you can do to ensure a decent return-on-investment (ROI), is your due diligence. What exactly does this entail?
In short, seek out the right opportunities — look for properties that are well-priced in relation to the popularity of a destination. Talking about destination, invest in a property in the right place. In the U.S., some of the top vacation home destinations include Florida, Tennessee, and Vermont.
And if you have your doubts about the perks of investing in a rental property, check out the rest of this blog on why a vacation home could be your best decision yet.
1. Benefit From Vacation Home Tax Breaks
There’s a difference between hiring out a vacation home as a rental, versus buying a vacation home and using it as a second home. If you choose to do the latter, you can benefit from a few favorable tax breaks. And who doesn’t love a tax deduction?
You will be able to deduct the mortgage interest and property taxes when you do your annual tax filing. But bear in mind, you cannot rent out the property for more than two weeks throughout the year if you want to use it as a rental, too.
2. Use It as a Secondary Source of Income
If you choose to invest in a vacation home and rent it out for use, then this is a great way to earn yourself a second stream of income.
Depending on the location of your vacation home, you could bag yourself some decent profit based on the popularity of the location. Another added bonus is that the expenses of renting out a vacation home are also tax-deductible.
If you’re looking to ramp up the overall aesthetic of your property for added appeal, be sure to check out WDG Vacation Property Design for more.
3. Enjoy the Convenience of It
How much more convenient can you get than simply packing a bag, catching your flight, and arriving at your second home for a getaway? You don’t have to worry about booking accommodation, whether the beds are comfortable, and how close you are to local amenities.
To add to this, a vacation home is convenient because it’s a place to store all your vacation-related items. This could range from bikes, canoes, paddleboards, and even a boat. No matter the location, whether it’s near a lake, or surrounded by mountains, you don’t have to think about packing and lugging all your vacation gear with you.
4. Vacation Homes Are Comfortable and Familiar
When you arrive at your vacation home you know exactly what to expect and what you’ll find. In essence, it becomes like your second home and makes for a truly comfortable getaway.
Being comfortable in your own space allows you to relax and unwind, without having to impress anyone or behave in a certain way. You can just be yourself around your family and friends and make the most of your downtime.
5. You Can Prepare for Your Retirement
One of the greatest benefits of investing in a vacation home is that it can eventually become a place you retire to, down-the-line. When you approach retirement age, you can sell your first home and use any profit you make towards a renovation of your vacation home.
In short, it makes for a great head start as you make the transition into your ”golden years”.
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Investing in a vacation home may not be the best decision for everybody. In fact, most people may not be able to achieve such a goal in their lifetime. But if you are at a stage in your life where the investment is possible, make sure to do your homework and you won’t regret it.
If you plan on buying a ”fixer-upper”, check out the rest of this site for home design and renovation inspiration!