The Benefits of Owning a Second Home
There are many benefits of owning a second home. It can enhance your lifestyle while generating valuable supplemental income. Homeowners often acquire a second home for vacation or investment purposes, which leads to years of personal enjoyment and financial benefits. A person may also inherit a second home from a loved one’s estate.
No matter how you acquire a second home, you can reap some fantastic perks from having another asset in your portfolio. What are the benefits of owning a second home, and how can you maximize your second home’s potential with Marketplace Homes? Here are some of the ways owning two homes (or more) can improve your livelihood.
Extra Income Potential
When you own a second home, you must designate which property is your primary residence during tax time. This means you should use the second residence as a part-time vacation house or investment property. Whether you lease it to tenants long-term or make it a short-term rental, a second home can generate valuable passive income.
Passive income acquired from rent payments is taxed at a lower rate due to the depreciation and amortization of real estate. Even if you’re a high earner at your day job, the side income that funnels from your rental property won’t get taxed at the same rate as earned income.
You don’t even have to live near your second property if you hire a national property management company to handle all the paperwork, tenant intake, move-ins, move-outs, maintenance calls, and other detail-oriented tasks that can take up a lot of your time.
As you can see, owning a second property is a valuable (and convenient) decision that can benefit you well into your golden years when retirement and social security checks don’t keep up with inflation.
A Vacation Home for Years of Enjoyment
Instead of looking for a short-term vacation rental at the beach every year, why not own the place? Owning a second home as a vacation property can provide years of enjoyment and treasured memories for you and your loved ones.
There’s no need to settle for less-than-perfect rentals because you missed the right time to book either. Gather several times a year at the same vacation home to celebrate holidays or simply to get away from it all.
Along with this lifestyle enhancement, you can also make your vacation home a source of good side income. If you only plan to stay at your property for a few weeks out of the year, then you can market it as a short-term rental when it’s vacant.
This venture has the most success when you choose a property near a popular destination like the beach, lakes, mountains, or near significant tourist attractions. And, best of all, you can deduct any expenses related to maintaining your rental on taxes while reaping the benefits of a lower tax rate.
Potential to Grow Wealth Over Time
Historically, real estate has been one of the best investments to safeguard and grow your wealth. People will always need a roof over their heads, and real estate meets that evergreen need. Over time, home values have steadily risen due to inflation and appreciation too.
Even though the market may fluctuate, and prices may go up and down in the short term, they have generally climbed upward. Just compare the home prices of today to that of the 1980s. The cost of living has trended upward for decades, and it shows no sign of slowing down. Therefore, if you’re looking for a way to secure your wealth and have your money work for you, it’s time to acquire some marketable real estate investments.
- Tip: When you consult a full-service brokerage like Marketplace Homes, you can learn valuable insights such as where to buy the most marketable properties and when to sell a property that has become a risk. Our team of real estate experts can give you the best advice on how to time portfolio acquisitions and dispositions correctly to maximize your returns and minimize risk.
Find Your Second Home with Marketplace Homes
Marketplace Homes is your one-stop brokerage to meet your diverse real estate needs. Whether you need to find a second home or manage your investments, we can help. Our experienced property managers can take the work out of being a landlord.
We’ll market and manage your second home so that all you have to do is enjoy your rent checks and passive income tax breaks. For more information on finding a second home or managing your existing portfolio, contact Marketplace Homes today.