Listing Courtesy of ReMax Coastal
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 email@example.com, visit more listings at www.beachrealestatemarket.com.
When it comes to making the most of Delaware real estate, knowledge is power. The schools didn’t teach us anything about selling a home or how to decide which home to buy, yet those are subjects that have lasting impacts on our lives. When such key decisions are in our immediate future, we come face-to-face with the importance of making the right choices, asking the right questions—and engineering the best deal.
Whether or not you’re about to head a foray into Delaware real estate, here are a number of excellent recent books that will help arm you with actionable knowledge:
100 Questions Every First Time Home Buyer Should Ask
This book is a general go-to reference for buyers (and I think for sellers as well: being able to put yourself in the shoes of potential buyers is essential for intelligent marketing). Answers to the “100 Questions” are provided by top brokers from around the country, so every detail won’t necessarily answer our Delaware real estate specifics; but on the whole, this book is concise and informative. The questions are arranged in an easy-to-read format, separated into chapters like “Putting Together the Deal” and “How Do I Know What I Can Afford to Spend.” Readers rate it very highly.
Smart Essentials for Selling Your Home
Solid, practical information that can be invaluable for homeowners about to enter the Delaware real estate market. In the same way that 100 Questions book is also useful to sellers, this one would make excellent reading for itinerant home buyers who’d like to know what’s important to sellers…thus being one step ahead when it comes to striking a win/win deal. Smart Essentials is mercifully short: just under 100 pages.
Buying a Home: Don’t Let Them Make a Monkey Out of You
Newly updated and with the highest reader reviews, this one is most appropriate for potential buyers with little or no previous real estate experience. As author Musgrave puts it, the object here is “to convey to the reader only the necessary information—and not one word more.” The extremely easy-to-read, informal approach is a welcome departure for first-timers: no wonder readers are almost unanimous in agreeing that if first-time home buyers read just one book, this is a worthy choice.
Investing in Real Estate
A newly written follow-up to the 2008 best seller, this is an accessible starter book that addresses most of the key issues that successful real estate investors learn to evaluate. The index is especially useful for locating individual topics quickly (something eBook readers don’t need to worry about: they just highlight a search term).
Thinking of buying or selling real estate in Delaware? Knowledge truly is power—and I’m here to share what I know and to bring it all to bear on your behalf!
Savvy shoppers; don’t sit on the sidelines, call/text 302-228-7871 or email me, Russell Stucki, REALTOR ® of Beach Real Estate Market to provide detailed information on Delaware homes for sale, investment and commercial properties, luxury and waterfront homes, condos/townhomes, new construction, lots and land, farms and equestrian properties located in but not limited to Bethany, Bethel, Bridgeville, Dagsboro, Delmar, Ellendale, Fenwick Island, Frankford, Georgetown, Greenwood, Harbeson, Laurel, Lewes, Lincoln, Milford, Millsboro, Millville, Milton, Ocean View, Rehoboth Beach, Seaford, Selbyville, Delaware.