If you're thinking about buying a beach house or another vacation home, you could be considering hiring a real estate agent to help you with your purchase. One person that you might not have thought about hiring is a financial planner. However, if you want to be sure that you make a smart decision when purchasing a vacation home, it can be a good idea to hire a professional to help you with the financial aspect of things.
Ensure You Can Afford It
Even though the idea of purchasing a vacation home can be quite exciting, many people don't think about all of the extra expenses that can go along with it. Not only do you have to worry about the house payment, but you have to worry about all of the other costs of owning a second home, like paying taxes on the property, keeping the utilities turned on and maintaining the home. Your financial planner can look at your income and expenses and help you determine if you are truly making a wise decision.
Get Advice on Taxes
Right now, you might get tax deductions for being a homeowner. However, you can't expect for your tax situation to stay the same once you add another property into the mix. There are still tax breaks for people who own second homes, but there are certain restrictions, such as if you rent out the home. A financial planner can talk to you about how you are going to use your second home and can help you determine how your vacation home will affect your taxes.
Consider Making Additional Income
Have you thought about renting your vacation home out when you aren't using it? Doing so can be quite lucrative, particularly if the home is in a popular vacation spot, but there are certain things that you have to worry about when doing so. A financial planner can talk to you about the pros and cons of renting out your vacation home when you and your family are not using it and can help you determine if this is the right choice for you.
As you can see, it is a good idea to meet with a financial planner before you ever decide to purchase a second home. In fact, it can even be smart to talk to the planner first so that you will know what to look for when you are house hunting. Luckily, it shouldn't be difficult to find a local financial planner, like Family Financial Partners, who can assist you with this decision and purchase.