Listing Courtesy of SUNRISE REAL ESTATE - LEWES
In Ocean View real estate, there are happy words (“sold!”) and there are troubling words (“default”). Because of the associations they conjure up, some phrases just automatically make us happier. Two of the leaders in the positive category are the magical words, ‘vacation home.’ All by themselves, they can trigger a smile. Why not? “Home” is comforting; “vacation” is fun. Put them together in “vacation home” and you’ve got a double positive. It’s a real estate equivalent of Jimmy Buffett’s Cheeseburger in Paradise.
As the economy recovers, some American families are doing more than just smiling at the idea. The Wall Street Journal says that vacation home sales jumped more than 50% in 2014—up from 717,000 the year before. Quicken Loans reports a jump “in both the number and dollar volume of second home mortgage applications.”
To a Ocean View homeowner with sufficient wherewithal, there are some practical, real life incentives for moving the idea from daydream to the ‘to do’ list. The primary motivation is what comes first to mind. Just as a vacation is a welcome respite from the day-to-day, a vacation home needs to qualify as a destination that is pleasurable in itself. Where that could be differs for everyone, but whether it be the beach, desert, mountain, lake, cultural metropolis or outdoor sporting mecca, any Ocean View homeowner’s vacation home should be a haven inherently suited to relieving the stress of the workaday world. Although it would seem to be properly classified as a pure luxury expense, vacation homes can be more financially sensible than that.
The Kiplinger web site has a number of observations for vacation home buyers. It finds that some mortgage interest rates on second homes have lowered to first-home rates. Another alternative is the “favorite source” for all-cash purchases: a home equity line of credit. According to Kiplinger, “Mortgage interest on a second home is deductible on as much a $1 million in principal for both homes combined.” If lenders calculate eligibility via the Fannie Mae and Freddie Mac guidelines, a borrower’s total debt payments should not exceed 36% of gross income…but if the second home is to be rented, that income can be part of the calculation.
Which brings up some other possibilities. A vacation home can not only cut down on vacation expenses (hotel and restaurant prices are rising, after all); if rented out some of the time, it can contribute offsets to its cost. To take advantage of IRS rules regarding personal versus rental classification, you should consult a tax expert. Since a quarter of vacation homes are rented out at least some of the year, it’s a tactic that deserves investigation.
Perhaps the advantage that’s talked about most for second home buyers is the contribution it can make toward retirement. If a retiree ultimately converts a vacation home to principal residence, profits from the former home can make a handsome contribution to the retirement nest egg. And if by retirement time that vacation home has been paid for in whole, it can make for an even more pleasing financial picture.
For an Ocean View resident with sufficient resources, purchasing a vacation home can be a practical as well as emotionally sustaining venture. If it sounds like an idea worth investigating further, talk it over with your financial advisor—and I’ll be standing by to help with any and all real estate considerations! Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com.
Last weekend’s regular Delaware news should have been promoting all the usual upbeat feature stories about the onset of football season, the start of a brand new school year, the finals of tennis’ last grand slam tournament and the like—but Delaware readers would have gotten eye strain trying to find any of them. Instead, the dark clouds brought by Hurricanes Irma and Harvey cast dense shadows across the region and the nation’s news. It was certain, too, that even after the terror of their actual passages had subsided, the fallout would continue to reverberate—expensively—for a very long time.
What was covered was how the prayers of millions not directly affected were being answered by many thousands of Good Samaritan volunteers. That uplifting story was joined by another, too; a piece of hurricane-related real estate news. Too bad it was all but drowned out by the fury of the storms and their tragic aftermaths.
Nonetheless, for Harvey-stricken Houston area homeowners with home loans backed by FHA, Fannie Mae or Freddie Mac, the announcement came that evictions and foreclosures would be suspended immediately. Added: the same government-backed entities would forego demands for monthly payments for at least 90 days (along with hints that “in some cases” that relief might be extended for up to a year).
As for those just beginning the climb out from Hurricane Irma’s destruction, I think it would be all but inconceivable that the same relief won’t be swiftly forthcoming for those homeowners—even if the size and cost of that will eclipse the cost of defraying the Harvey-affected loans. The small print has it that interest will continue to accrue—but Delaware onlookers will probably agree that the immediate granting of this relief is more than welcome at this juncture.
It's really too soon to be able to concentrate on what happens in the months and years to come—but the future of the American story is entirely predictable. This year we may have lost focus on traditional late summer sports, but in the championship ring of our real world and our real communities, we don’t suffer knockdowns easily. In U.S. history, there are no true KOs; there won’t be this time, either. The communities Americans rebuild will be better than ever! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestatemarket.com.