With low prices and affordable mortgage rates, there is no question that the current economic conditions have helped to create a tremendous opportunity for real estate investors. This is especially true on the Outer Banks.
With low prices and great selection, there has never been a better time to buy that second vacation home. Investing in a second vacation home could eventually allow you to be able to pay for the home and use it as your permanent residence when you retire.
"Buying and renting out a second home as a vacation rental property until you're ready to move in upon retirement can significantly help offset the cost of ownership," says Brian Sharples, CEO of HomeAway, the world's leading online vacation rental marketplace. "The income stream, in addition to tax write-offs for maintenance and repairs, make this an attractive strategy for many people nearing retirement."
According to HomeAway, on average $28,000 of rental income is pulled in from owning a second investment property. With the popularity of vacation homes increasing, it is hard to overlook this opportunity. It is reported that about 87 percent of all travelers that have stayed in a vacation home in the past will stay in one again this year.
HomeAway suggested taking the following steps in preparation for investing in your second vacation home.
- Consider the location and market potential - Carefully review the markets where you want to retire, and before you buy, consider the areas where consumer demand for vacation rentals is high, but inventory is low.
- Factor in tax write-offs - Talk to an accountant about the tax advantages of owning and renting out a second home. Expenses such as insurance, utilities, home maintenance and depreciation can be deducted, depending on how often you rent out the property and how many weeks you personally stay there each year.
- Stay competitive and network with owners - Check out other similar vacation rentals in the area to determine what rates they're charging travelers, and price your home at a competitive rate to help drive bookings. Also, be sure to talk with other owners to get their tips and advice for maximizing a second home investment.
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