Have you ever thought of owning a second home? Or maybe you have one but because of your schedules, they do not permit you to spend more time in it than you’d love? Guess what? Your options are limitless especially when the property is located in the island of Hawaii. Hawaii is known for its rocky landscapes of cliffs, waterfalls, tropical foliage, and beaches with gold, black and even green sands.
We are blessed with diverse natural scenery, abundance of public beaches, oceanic surroundings, warm tropical climate as well active volcanoes. These attributes have all contributed immensely to make this island a popular destination for tourists, surfers, volcanologists, and environmentalists. Among other things, a lot of Hawaii’s rich cultural diversity, as well as the exotic location, have made this island what is today. Hawaii is a huge investment hot spot for not only businesses but most important investment in real estate.
We spend so much of our lives working. It is important to think about what tomorrow holds for you and your families. This thought may be supported by the desire to buy a home in a quiet and pristine location, which is calm, peaceful, has friendly local, and has a safe environment. There isn’t any place better to buy a second home than in the island state of Hawaii.
Owing a second home is regarded by many as extravagant, especially when viewed from a neutral standpoint. Critics may oppose a second home, as it may stay unoccupied year upon year. What they fail to understand is that having an unoccupied second home in an island is like discovering a gold mine. You can generate thousands to even a hundred thousand dollars in rent profits per year, depending on the house.
Here are some of the benefits of renting out your second home.
Getting A Shot At Real Estate Investment Firsthand
There aren’t many better ways out there to get a shot at what investment in real estate really is, but you can get a taste of it by renting out your second home.
Cash Flow Generation
An extra few hundred or thousand dollars a month generated by your second home really comes in handy during these uncertain economic times.
Who Doesn’t Need a Security Blanket
Aside from cash flow, the property will go up in value, giving you an investment to fall back on if ever needed.
Buy More Properties
Considering the finances the second home generates on rents, it may help you with the funds to buy a third home to be leased out as well. This leads to more financial security.
There are Tax Benefits For Being A Landlord
here are some great tax benefits to owning rental property. The cost of repairs to the rental property (provided the repairs are ordinary, necessary, and reasonable in amount) are fully deductible in the year in which they are incurred. Good examples of deductible repairs include repainting, fixing gutters or floors, fixing leaks, plastering, and replacing broken windows. The insurance premiums you pay can be deducted for almost any insurance for your rental activity. They may include fire, theft, flood, and the mandated hurricane insurance for the rental property, not forgetting the landlord liability insurance. Finally, you can deduct fees that you pay to attorneys, accountants, property management companies, real estate investment advisors, and other professionals. You can deduct these fees as operating expenses as long as the fees are paid for work related to your rental activity.
Conclusively, considering the fact that selling your second home or renting it out are both profitable, know that their levels of profitability differ immensely. What this means is that if you are seeking a short-term investment, then selling your second home is definitely the best option. However, if you intend to be in it for the long term, then listing it out as a rental can be quite profitable, and as you are earning the rental income, your house will be increasing in value over time, maximizing your investment.
Dana Kern is the Principal Broker at Lokahi Properties