Having a second home is an ideal way to invest your money. Whether it's a vacation home, or a rental property, it's worth exploring your options with a real estate agent that knows their stuff. You don't want to go in blind, so these are some possible pros and cons of acquiring a second home.
Rental income. Keep in mind that you can earn an extra income by renting out property. Rentals range from short to long-term, with monthly or annual leases. The tenants will ideally pay off the mortgage payment and some each month, that way you can pull profit to reinvest and move up the fiscal ladder faster.
Deductible taxes. By leaving your second home unoccupied while you are not using, the interest and property taxes can be fully deductible from your gross income. This is great for people who don't want to rent their second home, but want to hold property.
Building equity. Homes in MA appreciate at an average of ~3% YOY. That increase, and any money you put in, builds equity. If you have people living in the property, so does their "rent" money.
A vacation home. Enjoy the slew of benefits that come along with having a vacation home. You could rent it out when you're away, let your friends visit whenever they want.. the possibilities are endless!
More responsibility. The payoff of undertaking responsibility is usually a gain in power. Purchasing a house comes with a lot of responsibility, so owning two properties is even more challenging. As you own more properties, it gets easier to do everything in the process. In the beginning, most people have "DIY" money, not "hire a bunch of people to use my money to make me more money" money, so that, plus a learning curve, is where most mistakes happen.
Additional expenses. Owning a property means you have to maintain it, which includes maintenance expenses, taxes, and other expenses. As long as you have tenants, their payments should've cover all this and more, but prepare yourself for possible vacancies.
Risks. As this is a secondary home, you would not be there most of the time, be aware that accidents happen, and you have to manage to properly secure the home while you're absent.
Remember to contact us at Castles Unlimited with all of your real estate needs!