Location, Location, Location
Where do you enjoy vacationing? If you live just hours from the mountains or the beach, either of these options may provide a wonderful place to purchase a second home. Focusing on condos will probably provide many additional amenities like a community swimming pool, fitness area, tennis courts, beach access, or cross country ski trails. If you're a big city person, a condo in the city provides easy access to restaurants, stores, and the local bus system, which can provide easy transportation to places of interest.
Whatever location you choose, you'll want to pick one that's popular with tourists. This is especially if you're planning to make money by renting your second home out to others during various times of the year.
Making Income on Your Second Home
Whether you're simply looking to cover your mortgage or you'd like to generate some extra revenue, renting out your vacation home can be a great option. If you're not interested in managing the rental details yourself, you can hire a management company. They will book clients, collect rent, clean the home after each rental period, and provide items such as bedding, towels, and maid services. You just let them know the dates it will be available for renters. Typically management companies receive a small percentage of the rent in exchange for their services.
In the long term, you may earn extra money through the sale of your vacation home. Like any property, rental condos appreciate and can sell for more than they were bought. As the owner, you have control over when you sell the property.
Tax benefits provide a third monetary advantage. By tracking the time you spend in the condo vs. the time that others spend renting it, you may be eligible for certain tax advantage when you file in April. There are tax benefits for renting long-term also. So, if your rental is available for long-term rent, you can still take advantage of tax breaks.
The Purpose for Your Vacation Home
You and your family will have to decide if you'd like to rent out your second vacation home or if you'd simply like to keep it for family and friends. There are several options to consider when you're thinking about utilizing you vacation place as one of the many rental condos in the area. You may lose the freedom for spontaneous weekend trips, since other tenants may be occupying your home . You may feel uncomfortable with strangers in your home on a regular basis. You and your family will have to discuss the pros and cons to owning a rental property.
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