The Second Home Property Market is Booming, Despite the Pandemic Where Do You Want To Buy?
As a significant proportion of Americans have spent most of 2020 confined to their homes, it is not surprising that interest in second homes has increased exponentially as many people yearn to travel to exotic locations again. Trends in what many Americans are searching for property wise and reasons behind this, changed in 2020 compared to previous years.
A similarity that has evolved is that many people are tired of working and living in small apartments in the big cities and are wanting to move to more rural areas so that they have more space to move around. If they are wanting to purchase other city condos it is for the change of scenery, even if it is another largely populated city.
Different Property Investments
If having excess cash is not a concern for you then you could invest in a second property to maximize your investment returns. There are various types of properties to purchase as a second home, such as condos, single-family homes, townhouses, multi-family homes. Depending on what you are looking for and desired location, there will be plenty of options to choose from. You will just need to research thoroughly before you make any decisions and invest your money.
In the long run your investment into a second property will be beneficial in terms of revenue, as the property is likely to increase in value over the years from when you initially bought it. You also have the option of renting it out as well, which will certainly guarantee another form of revenue whilst you live in your main property, if this appeals to you.
Benefits of Owning a Second Property
If you decide not to rent and mainly utilize your second property as a vacation haven for over 14 days annually in total, then it is considered to be a personal residence. As a result you would be eligible for a reduction in mortgage interest rates and property taxes. You would be able to deduct up to $10,000 in property taxes according to The Internal Revenue Service (The IRS).
There are benefits from owning a second property that are worth considering, apart from just having somewhere else to escape to.
- Less to pay on your Mortgage interest
- Reduction on property tax
- Deduction on Home Equity Loan
If you decide to opt for renting, then as long as the total number of days is less than 14 days annually, you would be able to keep this income, tax free. Any deductions are stipulated in the Internal Revenue Service (The IRS) of Publication 527 Residential Rental Property which goes into further detail and is certainly useful to know.
Outsource to REIGs
If you like the prospect of owning a second property but do not want to deal with the effort of looking for potential tenants and organizing payment each month, you could always outsource to a Real Estate Investment Groups (REIGs). Essentially they are a company that buys an entire apartment block or several different buildings and sells the condos separately to investors. They would then deal with all the finer details of advertising for tenants, securing rent and maintenance building costs. In return they would take a percentage cut from the rent each month charged to the tenants.
Kuala Lumpur as an Investment Opportunity
If you have extra cash that you would like to part with, then why not consider getting yourself a second property in Sunway Velocity. Once life starts to return to normal post-pandemic, goodness knows you will need a vacation retreat to escape to when you want. As a city Kuala Lumpur is considered to be a good investment to purchase a property in, as it is considered to be good value with many amenities available nearby and plenty of newly built condos to choose from if modern bustling city life appeals to you.
Overall it would be advisable to research your ideal location, property type and average prices before you settle any deposits down. There are a plethora of options to choose from whether you want to remain in the US or venture somewhere else in the world and establish a base there. The benefit of doing this is that you would know you would have a second property to escape for a last-minute vacation, post-pandemic, when life once agains returns to normal.
- Written by James Hills
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