(April 16, 2007) Benefits of Owning a Second Home

Whether it’s a vacation home or a rental property, a second home can offer you as many advantages as your primary resident.  It is important  you understand the tax implications before you buy.. 

Lifestyle benefits

If you are purchasing a second home as a personal getaway, you’re probably looking forward to having a place to relax with family and friends.  Whether it’s lakefront condos,  or a getaway in the Great Smoky Mountains... Just knowing that you can retreat from the hustle of daily life to your own private vacation destination can have such appeal. 

Financial benefits

A second home investment can be very financially rewarding with tax deductible interest, real estate appreciation, and potential rental income. If you are looking at your investment strictly as a rental property in most cases it has the potential to  create a significant source of income. Long and short term rentals are both great options of off setting some of  the cost of ownership.

Tax implications*

How do you plan to use your home? Second Home or Investment. To the IRS a second home is one that you personally use 14 days per year or at least one day for every 10 days it is rented out. Keep in  mind you cannot deduct mortgage interest for an investment property, however, you can deduct operating expenses such as maintenance and advertising cost  of which exceed the your rent you collect.

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