If you own a home it’s probably safe to say that you are somewhat familiar with the home buying process. You may find that you are now in a place where you are searching for a place to get away from it all and relax. Purchasing a second home or a vacation home can be a rewarding experience. However, it is not the same as when you bought your primary residence. Here are a few differences you should know.
You may find that a mortgage on your primary residence was easier to obtain than on a second residence. Mortgage lenders on average require a higher down payment and a high credit score on homes that will not be owner-occupied. Before buying a vacation home review your budget carefully. Be sure you have a strong emergency fund and cash reserve in place before buying.
Before signing on the dotted line for that vacation or second home, plan your goals. The stage of life you are in could impact your decision to buy. Consider how much time you will have in the near future to use the home. If you are a young family, you may find that you will use the home less and less as your children grow busy with activities. If you are sure that you will have enough time to use and enjoy a vacation home, then purchase it. Know what your goals are for the future and if a second home fits them before purchasing.
There are often tax breaks and home credits that come with owning a home, but not all of those apply to a second home. If you are anticipating using your second home as a vacation rental carefully calculate your return on investment over the next year to determine if it will be worth it. Determine how much you will rent it for, how many days a year you anticipate it renting, and any expenses you may incur. It is always wise to consult with your tax professional before renting out your vacation home. If your vacation home is considered an investment property there are many tax deductions available.
If buying a second home along the Jersey Shore is something you are considering, we’d be delighted to take the time to show you potential homes and to answer any questions you may have about owning a second home. Our job is to make your tomorrow better than today. Contact us today via email or give us a call at 609-264-6762.