Buying A Second Home In Another State

Some may want a vacation getaway some are seeking rental income and others want to purchase a fixer upper for their retirement years.

Buying a second home in another state. Selling your current house to buy a retirement home offers up several benefits worth considering. There are some great benefits. For one you can sell your investment home and use the proceeds to buy another rental property without paying a capital gains tax. Though taxes are inevitably a burden a little advance planning during the house hunting process can save you thousands of dollars a year.

So take a deep breath buyer and keep reading for the step by step essential secrets to buying a. Jumping the gun and buying another property before your primary residence is paid off simply doubles your risk even if you plan to rent it out when you re not. According to the census bureau two thirds of today s homeowners have a mortgage on their current homes. For example the second home needs to be over 50 miles away from your current home and your ability to rent it out is limited.

The most popular place. Out of state buyers can be at a disadvantage because they probably don t know the best neighborhoods school districts local and state laws or anything else for that matter. Always use a real estate agent when buying a home. You ll be moving into your retirement home while you re still young and able.

You won t need to juggle two mortgages. Most people find the experience of buying a home in another state to be particularly stressful especially when they re not familiar with the new area. If you re considering buying a second home to rent out or move to and rent your old home. There were 7 4 million second homes in 2016 or about 5 6 percent of the total housing stock according to a report from the national association of home builders nahb.

Second home owners need to worry about both property taxes which vary by state and locality and if renting out the place income tax. Buying a second home as an investment. Previously you could borrow against home equity and take a deduction on the interest regardless of whether the proceeds were used to pay off a credit card take a vacation or buy a second home. Most people simply aren t in a position financially to buy a second home.

If you are thinking of buying a second home for any reason you should weigh all the pros and cons before you commit yourself to another mortgage.