By Barbara Ballinger, REALTOR® Magazine
How a Second Home Can Be Your Best Investment By Tom Kelly and John Tuccillo (The McGraw-Hill Cos., 2004)
The authors of this book advocate investing in second-home real estate because it represents a more stable purchase than other investments, such as corporate stock, and because you can leverage it, enjoy tax advantages, rent it out, or even live in it. However, making a decision about where to buy can be tough since you will likely have more options than when you purchased your primary home, which usually must be near a job or schools.
To make the choice, the authors recommend considering several factors, including the community itself, whether there are enough renters nearby, and the condition of the house—unless you’re going to do a lot of work or find someone else to do it. The authors also advise visiting the area at different times of the year, and making sure it offers all the amenities you consider important. When it comes to the investment factor, they say it’s wisest to buy near water since so many renters consider that a key feature.
Buying near a population center also is a good move, both for a healthy pool of renters and to find a caretaker if you’re not always going to be there or don’t want the headaches of being a landlord. Finally, carefully consider the cost of buying, furnishing, and caring for your investment.
After all, paradise can be tough on the wallet.