Owning a Second Home in Delaware- Rehoboth Beach Real Estate
Are you in a position where it would make sense to have another home in a resort town like Rehoboth Beach, Dewey Beach, Bethany Beach or Lewes? You’ll be interested to know that there are still tax benefits, along with lifestyle perks to owning a second home In Delaware. Our state is simply one of the best places in the country due to our location to major metropolitan areas and our low tax burden.
Owning a second home in Delaware can offer many financial advantages. First, a second home used as a rental property can be a way to increase your income and cash flow. Also, in terms of quality vacation time with family, a second home at the Delaware shore sounds a lot more “fun” than a mutual fund. A third aspect to consider though is that homes typically are solid investments. The Rehoboth Beach real estate market regularly changes, however looking long-term, you’ll find that homes here always appreciate.
You may be able to find a great deal on a condo or home while mortgage rates are still low. Current low interest rates can provide for a more desirable property without increasing your budgeted amount, and depending on your situation, can be advisable to paying cash. Be aware that qualifying for a second home loan can be tricky. If you intend to use the home as an investment, you will need to evaluate that the “numbers” make sense.
Owning a Second Home – the Numbers
Some of those numbers, aside from any mortgage payment, include insurance, taxes, and maintenance costs. If you plan on using the home as a rental, you will most likely need to plan on increased insurance and furniture costs. Maintenance will be higher than just a simple garden and pool service as cleaning and repairs will be required after each tenant. If you will not be living in the home, it is wise to hire a caretaker to oversee the property and handling emergency weather events.
Before you buy, you may want to consult with advisers who work with estates, taxes, and finances to make sure owning a second home is the right decision for you. Decide if the second home would pay for itself as an investment property or if you can realize tax-benefits with expenses or depreciation. If it is a rental, the home may only be available for your personal use about two weeks per year, unless you agree to take less of a deduction. If you choose to only rent the home for up to 14 days per year however, you can still receive rental income, but tax deductions will not apply. Be armed with the correct information and the right real estate agent, can explore the options of owning a second home.