It’s always a dream to have a second home to either vacation in or utilize as a rental property for additional income. If you're a homeowner where your primary residence suffers cold, icy winters, you may want a second home in California. If you’re not planning on living in the house a majority of the time, it's a great way to have the property as rental income. Many people come in and out of the state for work and play throughout the year, making the housing rental market here in California hot. Through renting the property out, you can cover all of your expenses including things like the mortgage and property taxes.
Buying a second home is not unlike buying your first home. You’ll need a downpayment, to find the best mortgage rates and more. The difference is that you’re taking on a more significant financial burden when you purchase a second home. That’s why the decision to buy a second property is so significant. You’ll need to consider the following:
It’s especially important to take a close look at your financial picture because a second home may carry a bit more of an expense than your first home. In addition to the mortgage, property insurance, and taxes, you’ll need to consider the management of the property while you’re away.
Finding these management options will all require quite a bit of research on your part. You’ll want to price out different options and services.
Of course, if you are paying cash for your property, you’ll have fewer expenses on your plate. The management of the rental property is crucial to ensure that your property stays in good condition and keeps rentals rolling.
Tax breaks are one of the perks of being a homeowner. A vacation or rental property may be a bit different. Depending on how much income you make and the number of write-offs that you have, a second home can either help or hurt your taxes. It’s a good idea to speak with a tax professional to see where you’ll stand tax-wise after the purchase of your California rental property. Like it or not, taxes are a significant part of your financial picture!
When it comes time to sell your California rental property, keep in mind things like the capital gains tax, and the current state of the housing market. Because you’re buying in a desirable area, it can be easier to sell, but you want to be sure that your transaction makes financial sense.
We hope you find this information helpful. Have questions? Don't hesitate to give us a call, we are here to assist you in home buying and selling.
Thanks,
Pete & Christine
Lommori Stahl Group
Remax Star Properties
Christine Stahl and Pete Lommori combine their experience and skills to better serve their real estate buyers and sellers, making your transaction a successful one. Both Christine and Pete learned the business from the ground up and were taught the ins and outs of good real estate practices and procedures from their fathers – real estate brokers and owners. With two generations of real estate practice, Pete and Christine continue a family tradition as realtors helping buyers and sellers protect their investments time after time.
