November 14, 2011 – (RealEstateRama) — The phrase “buyer’s market” has probably been driven into your head by now. For those who are looking to move up to a larger home, or those on the lookout for their first home, the time is right. But another market has also been blooming for those already comfortable in their current housing situation; the second home market.
“While the second home market has seen more highs and lows lately than the primary home market, vacation homes are a trend on the rise,
says Patricia Bell, President of Gloria Nilson Realtors, Real Living.
These homes, often purchased in appealing areas or destination locations, can be used as summer homes and for weekend getaways, or can even be rented out for extra income until you are ready for retirement or decide to sell. “At a time when prices are low, now is the time to consider buying a vacation home an investment,” Bell states.
Some of the tax benefits of a second home are similar to those for a primary residence. Additionally, you will most likely obtain some substantial appreciation in the price of the vacation home as the years go by, and if you sell the home, any gain from that sale would likely qualify as a tax-favored, long-term capital gain, Bell explains.
However, before you jump right into purchasing a second home, there are a few key things to consider, Bell warns. “Take a look at your finances and determine if you can afford to carry two mortgages, maintain two households, and pay the extra utilities and maintenance costs,” advises Bell. If you plan on renting the home, consider what would happen if you were unable to find tenants for a period of time. Could you financially sustain the property? Also, look into financing requirements and options, as they often differ between second and primary properties.
“If it is financially feasible, purchasing a second home is a great investment, regardless of whether you decide to use it as a family destination, rent it out, sell it down the line, settle in for retirement, or any combination of the above,” says Bell.
For more information on home pricing, please contact Gloria Nilson Realtors, Real Living at pbell (at) glorianilson (dot) com, 732-450-2300, or Gloria Nilson Realtors, Real Living.
About Gloria Nilson, REALTORS, Real Living: Gloria Nilson, REALTORS, Real Living has 18 offices and more than 700 sales associates throughout New Jersey. Owned by SCS Realty Investment Group, LLC, led by Dick Schlott, the company also owns RLS, REALTORS, Real Living with offices in Bernardsville and Mendham, NJ, and is a franchise of the Real Living Network. Real Living is owned by Brookfield RPS, a division of Brookfield Asset Management Inc., one of the largest relocation companies in the world with a RealtorÂ® network nearly 30,000 strong, based out of 1,500 locations across North America.