If purchasing a weekend home, vacation house or investment property has ever been on your radar, now could be a great time to act. With historically low mortgage rates and high demand for short-term vacation rentals and long-term rental properties, conditions are prime for second-home purchases.
Here are four reasons why a second home would be a solid financial investment in today’s real estate market:
Mortgage rates are historically low.
While they may fluctuate from week to week, today’s rates are still significantly more affordable than in years past. In fact, they’re the most affordable they’ve been in 40 years.
The rental market is hot.
A second property can add a consistent stream of income no matter what your intentions for the home may be. Rent it out full time for year-round cash flow, or list it as a short-term rental for some bonus cash when you’re not using it. Demand is high for both types of rentals, so your opportunities are endless.
There are tons of financing options.
There are dozens of ways to finance your second property without jeopardizing your financial stability. Cash-out refinances and home equity lines of credit (HELOCs) allow you to leverage your current home equity to cover the costs of your new property, or renting out the home can give you reliable income to afford a new mortgage. You can also tap into your IRA or 401(k) to help.
The new tax law can help.
The latest tax reform has led to decreased demand for vacation homes, which means prices on investment properties could be on the decline. The result? More house for less cash. Additionally, interest on HELOCs and second mortgages will still be deductible under the new tax law, so there’s even more saved cash on the horizon.
Are you ready to make the leap and buy that second property you’ve been wanting? Get in touch today to discuss the opportunities available.