Buying a holiday home is a big decision to make and potential holiday home buyers are often unsure about whether to make the jump and make this large investment and life decision. There are many positive reasons, both financial and personal, for owning a holiday home which we explore below.
Financial benefits
Rental income
When a holiday home is not in use by the owner, there is the option to rent it out which can generate an extra source of income. This can be extremely lucrative if the property is in a desirable location.
Tax breaks
If renting out the property is not on the cards and the home is going to be used as a second home, then the mortgage interest and property taxes can be tax-deductible. The home cannot be rented out for more than two weeks a year in order to qualify for the tax breaks.
Long-term profits
The price of a property in popular holiday home locations tends to retain its value and mainly appreciate over time, even when the property prices in other areas are depreciating. Owning a property in a desired holiday location can generate large profits when selling the property, especially if the home is kept longer-term before selling.
Personal/lifestyle benefits
A place to retire
It makes going on holiday easy
Having a holiday home at a spot you frequently go to anyway can be convenient as you can leave belongings and store large items such as boats and water ski equipment if the property is near a lake or the sea and skiing and winter wear items if the property is in the mountains.
It offers comfort and familiarity
Not everyone is up for an adventure when going on holiday and for some, being comfortable and within familiar surroundings is a must for a relaxing holiday. Owning a holiday home means that you can rest assured knowing that you can have a relaxing time as soon as you arrive.
Access to other holiday homes
Owners of holiday homes often have the option of swapping the use of their home with other holiday homeowners in different regions or even countries. So if you want a change of scenery for your holiday, the option is there.
A place to retire
When it’s time to retire, a holiday home is often a good place to retreat to. There is also the option to sell the first home and use the profits to live off, to pay off the mortgage of the second home or for property renovations.
There is plenty to consider before purchasing a holiday home, especially regarding the finances. Click here for free mortgage advice before you make your final decision.
