The purchase of a condo as a second home is something that many families consider, especially those who like to vacation in the same general location each year. Historically, real estate investments of this nature have generally risen in value, making them a good long-term investment strategy.
Buying a condo that can also double as a vacation destination for your family can offer some other financial benefits, as well. If you are considering this type of purchase, the following information can help you understand the potential advantages a condo purchase can offer.
Rental income and tax deductions
One of the most financially advantageous reasons to purchase a condo as a second home in a good vacation destination is the ability to receive both rental income and tax deductions. According to Internal Revenue Service guidelines, those who own a second home that they occupy fewer than ten percent of the rented days can deduct many of the expenses incurred in owning the home.
As an example, a condo that doubles as a vacation home could still earn rental income 300 days a year while still allowing the owner to use if for up to 30 days, or one-tenth of that time, for their own vacation usage. As long as the one-tenth rule is observed, the owner can still deduct many of the costs of management and ownership on their taxes, including cleaning, maintenance, and mortgage interest, among others.
No extra exterior maintenance costs
Another financial advantage of purchasing a condo instead of a single family home as a vacation home is that it frees the owner from the cost and time involved in exterior maintenance. Each owner pays condo fees that are then, in part, used to pay for any exterior maintenance required to protect the property value and ensure safety. Examples of exterior maintenance that could be handled in this manner include landscaping, exterior painting and cleaning, and roof repairs or replacement.
Reaping the gain of rising property values
A condo unit purchased in a popular vacation or residential area can become much more valuable over the years of ownership. Well-selected properties that rise in value in this manner can be lucrative components in the property owner's investment portfolio.
To learn more about the potential value available through the purchase of a condo and to get expert advice on selecting the right one, contact a reputable real estate professional who specializes in condos, second homes, and vacation properties.Share