In the March 2011 issue of Money magazine (www.cnnmoney.com), there is an article about what you need to know about buying a vacation home. I did not find the article online yet, but check it out in the March issue on page 51.
1. Now is a good time to buy. No surprise here. With home prices at an historic low.
2. A home is a better deal if it can be rented. A home’s rental potential can affect its resale value.
3. Don’t count on rental income to pay all your bills. On average, a vacation rental property rents out 17 weeks a year. You’ll need to factor in cleaning, maintenance, insurance, and possibly management fees into your cashflow projections.
4. Your loan rate depends on how you use the property. Lenders tend to give extra scrutiny to vacation homes. If you use the property as a second home, you’ll pay about the same mortgage rate as you would on a primary residence.
5. Tax benefits. Stay in your second home for less than 10% of rental days and you can deduct operating costs.
Looking for a great second home with rental income potential? 3 BR log home overlooking the Gordon St Croix Flowage in Gordon Wisconsin.