Buying a vacation home can be an ideal first step when looking to make profound lifestyle changes. Not only will it allow you to escape your everyday surroundings, but it can also give you the peace of mind that comes with having an investment that's always appreciated. If this sounds like something you want to pursue, keep reading below to learn how buying a vacation home can improve your quality of life.
Advantages of Buying a Vacation Home
Save Money
The first significant advantage is that you will save money. Buying a property for use as an investment property comes with substantial tax advantages over other investment options. If you're planning on investing in something anyway, consider investing some of your funds in real estate. It gives you access to higher cash-on-cash returns than stocks or bonds due to low annual costs and potential capital appreciation – but it also comes with special treatment from Uncle Sam.
You Can Make Rental Income
When you're not at your vacation home, rent it for additional income. At the end of the year, deduct rental expenses like mortgage interest and utilities from your rental income to see how much you made off the rental portion of your property. A reasonable goal would be $25,000 per year in gross rent. For example: if you have a condo worth $300,000 (including depreciation) with a monthly rent of $2,500 ($37,500 per year), then you could expect around $10K-$12K per year after deducting expenses (depends on deductions).
Improve Life Quality
A vacation home allows you the time to relax and unwind. If you're stressed, returning to your vacation home can help alleviate those feelings. If you want to explore new places, renting out your home while travelling allows you to do so without worrying about being away from your regular living space.
Your Vacation Home Can Become your Full-Time Home
In the future, you could change your vacation home into your full-time house. Investing in a lovely vacation home while young could offer you a great retirement home in your later days.
Tips to Consider before Investing
Before you purchase a vacation home with Lewis Realty, it's essential to consider how often you'll be able to visit and if it's a wise investment. Will you be able to rent it out when you're not using it? How much will upkeep and taxes cost? It's also essential to consider your financial situation and whether or not you can afford the mortgage and other associated costs. Investing in a vacation home is an excellent way to build equity in an appreciating asset.
Conclusion
A vacation home can offer many benefits, from providing a place to unwind and relax to increasing your property value. If you're considering purchasing a vacation home, be sure to do your research to find the perfect fit for you and your family. With careful planning and preparation, owning a vacation home can be a rewarding experience that improves your quality of life.
