Owning more than one home is a good financial strategy to have and a great long-term plan towards retirement. When the chance arises, a lot of people prefer to invest in a second home. While the use might not be immediately apparent, it is actually more useful than it seems at first glance.
Second homes are great as an additional lifestyle option, but they can be even much more than that. Here are some of the best ways to make the most of a second home:
There are many financial instruments available to invest in such as fixed deposits, mutual funds or even precious metals like gold. However, a second home is a good investment to have. Market metrics indicate that real estate investments are one of the best performing asset classes with higher returns on investments than almost all the previously mentioned assets.
A second home is a great way to get tax benefits on the interest payments on your mortgage. There are also other deductions that you can claim even when you are making income from the home.
You can make your second home your retirement villa. If you live in the city, you can buy a home in a quiet countryside of your choosing where you can either live when you have retired or also rent out part of it as an income property. When retirement comes, there’s a good feeling that comes with being able to make the choice to leave the city and relax in a quiet country while maintaining a similar standard of living.
Your second home can serve as a rental property that will be generating income for you. With the help of reliable property management company, such as Lokahi Properties, you can turn over your second home to be rented out to tenants. The income can even be enough to pay part of the mortgage for your first house.
Buying a second home in a coastal area can give you a vacation spot where you can take your family for holidays. In most areas, you can also rent it out by using a property management company, such as Lokahi Properties, to find short stay tenants. This will help cover most of your maintenance expenses and even some mortgage costs during peak tourist seasons.
Having a second home does not have to be a luxury. With efficient property management, you can turn it to an income generator that will help you meet your financial goals. If you are considering getting a second home, be rest assured that there are many ways that it would benefit you both financially and non-financially.
Dana Kern is the Principal Broker at Lokahi Properties