Second Home for Pleasure and Profit

The dream of owning a beautiful getaway as a second home has occupied the minds of many people. But more and more people want their second home to be a good investment as well. John Tuccillo’s, the former chief economist for the National Association of Realtors, and Tom Kelly, a nationally syndicated real estate columnist and talk show host, wrote a book about how to find a second home, finance it and use it to build long-term wealth. In How a Second Home Can Be Your Best Investment, John and Tom state “there are two points that we wanted to make clear. . .The first is that most folks buy second homes as an investment and would like to see that investment grow over time. The second is that real people buy second homes. We wanted their experiences in the book.”

The Northwoods has been an excellent location for people who are looking for a second home. Whether the individual is looking for a home they are going to retire to or just a getaway they can escape to, the Northwoods offers an experience that few places in the country can offer.

It has also proven to be an excellent investment for many people. Over the last 7 years both Vilas and Oneida counties have averaged over 10% appreciation. The tourist industry in the Northwoods has allowed many people to rent their second homes out to cover many of the expenses of their home. Beyond property appreciation and rental income, there are other methods people can use to make their second home a good investment. In an article written by Broderick Perkins, he talks about how “tax laws, now exclude from taxes up to $500,000 in capital gains when you sell a home. That extra money can be rolled over into another home – or two – where additional tax benefits await.” This technique is also explained in Tuccillo’s and Kelly’s book.

Perkins warns though, “returns on any investment, especially real estate, are almost never over-night sensation, but long term obligations.” He also says, “Pick a real estate team. Line up an investor advisor, real estate agent, loan officer, tax specialist, attorney, and others who can assist you. An investment-smarts heavy team of professionals positions you to identify, and quickly close on the best investment properties.” . . . “Think location, location, value.”

According to the authors of How a Second Home Can Be Your Best Investment, “the typical vacation or retirement home is not a million-dollar house in the Hamptons or a posh ski condo. Cottages, cabins and chalets are much more common than expansive estates. As millions of Baby Boomers get nearer to retirement, they are buying vacation homes where they hope to eventually retire and the second home market is expected to increase by 100,000 to 150,000 (homes) each year during the next decade. Investors of all ages now are considering a variety of rental homes that can later be traded for an eventual getaway property.”

If you are thinking of buying a second home or if you are ahead of the curve and already own one, take a look at information on how to make your second home a good investment as well as a place to enjoy. Kelly and Tuccillo’s book shows readers how to save thousands through exchanges and exemptions and includes valuable experiences of second home buyers and real estate investors. Study your options and talk to experts. You might find pleasure and profit in the same place.