What are the Pros and Cons of Owning a Second Home?
As you explore the options of purchasing a second home, you should be sure to consider the advantages and drawbacks. What are the pros and cons of owning a second home? Here are a few things you should consider before purchasing a second home to see if it is right for you.
Pros
Buying a second home might be a great way for you to be closer to the people you love and places you enjoy. Owning a second home might also help you accomplish your financial goals. Here are some of the biggest advantages of buying a second home:
- Designated vacation spot. If you and your family love the mountains but are tied to the city for work, you might be able to spend more time getting away if you have a house in a place that you love to be. The same goes for if you have people or other places you want to establish a home near.
- Work life balance. Let’s say you have to travel often for work, it may benefit you to have a long term residence that helps with your work life balance.
- A place to retire. When you plan to move after you retire, you can get a head start on creating a community in a place you love by purchasing a second home. You can use the home as a retreat for now and retire to it later.
- Diversifying your assets. Homes tend to increase in value, so you can use your second home as a means of diversifying your investments. You can choose to keep or sell your home down the road.
- Rental income. When you decide to rent your home, you can earn rental income to help cover the expenses of owning a second home. If you want to vacation at your home, you can rent it out short-term. If you decide to have it only as an investment property, you can rent to individuals or families on annual leases.
- Potential tax breaks. Many people choose to leave their second homes unoccupied when they’re not using them. If this is the case, the interest and property taxes may be fully deductible from your gross income. Be sure to talk to a your tax advisor.
Cons
Although the pros make purchasing a second home sound attractive, there are a few things you should consider before buying a second home.
- Added responsibility. Owning twice the property might also mean twice the work. You should consider how you will keep up the property grounds and manage the financial burden of taking extra care of your properties.
- Risks of security and property damage. You can’t be in two places at once, so you may need to consider the security of your unoccupied home.
- Additional expense. There may be additional expenses involved in getting from one property to the other. For example, if you live in Ohio but plan to spend a few weeks a year at your second home in Florida, you might incur parking charges, costs of flights and more.
- Lack of Variety for vacations. If you like variety in your travel, owning a second home can limit your travel opportunities. You will ideally be visiting the area of your second residence often.
- Limits on VRBO: Some popular vacation areas limit vacation rentals by owner. Example: certain cities put in place laws that make it impractical to lease your home of a short term basis.
Are you considering a second home in Seattle or the Seattle metro area? Let us help you work through the pros and cons hand help you find the right home for you. Contact one of our agents today at Ewing and Clark.
