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Second Homes – Now is the Time to Buy

Hi! Tax Day – it’s a great time for a blog post about more tax deductions!

Have you ever considered buying a second home? A retreat from the busier lifestyle of the DC area? An investment? Well, now is a great time to buy. As a second home and Virginia countryside expert, I talk with people all the time about what will work for them.

Virginia Horse Farm

First, let’s talk about why to buy at all. You have probably seen your current or past primary home increase in market value. This added to your wealth, right?
Buying a second home gives you another way to invest in your future while enjoying the home (if it is a getaway for you) and benefitting from the tax breaks.

Why buy now? Mortgage rates are hovering around 4%. At one time not terribly long ago, they were double, and not too long before that double that double – in the teens!
Secondly, more baby boomers and others who have the desire and financial ability are expected to continue entering the second home market. This drives prices up. Avoid paying more money! Buy now before homes increase in price and you cannot afford as much house or perhaps cannot afford one at all. And before the availability of existing homes decreases and you have less to choose from. For instance, there is a shortage of older farmhouses in the Virginia countryside already.

There are so many options to choose from across the US and the world. And right in your own back yard where there is the ocean, some lakes, rivers, mountains and stunning countryside.
Whatever your preference, one recommendation is to consider how often you will use it and whether or not you will rent it out. You wil also want to consider:
1. How do I spend my free time now?
2. How much travel time would be the maximum I would want to spend to get to and from the home?
3. How often would I use the home?
4. How much maintenance is required or would I be willing to do?
5. What cost of owning the home is agreeable to me?
6. Do I want to enjoy the home seasonally, in more than one or in all seasons?
7. Does the area I am considering buying in have a growth history and /or a stable price sales history?

So, why is buying a second home a great financial investment? Often, when you or anyone buys a home, you borrow money to do so. It is referred to as “leverage.” For example, say you buy a $300,000 second home with a 20% down payment. And then suppose that the property increases in value a modest 5% per year. At the end of the first year of your ownership, the home will be worth $315,000. You have earned $15k on your investment of $60K, an increase of 25%! Isn’t that an impressive return on your money?

Do keep in mind that second homes are considered a luxury and can sometimes be a volatile market to buy in. So, get Realtor who helps you to buy wisely. Not every second home is a wise or good buy. Always invest with the current market in mind and also think of resale. Determine or project how long you will or might own it and whether or not you will make any improvements or corrections to it while you own that may increase its value.

Next – Tax Breaks – yes!

Here is a list:
1. Mortgage interest may be tax deductible depending on your use of the home, just as interest payments are on the mortgage of your primary home.
2. Property taxes – ditto on no.1.
3. Used an equity line to buy? This may be tax deductible also.
4. Renting at all: If you have used it to rent out, you may be able to deduct some expenses including depreciation, if the government considers your home to be a “vacation home.”
Ask your accountant about the distinct government regulations of claiming a home as a second home or vacation home. She can advise you on the government’s definition which has to do with the number of days you use the home for a rental vs the number that you enjoy it yourself as a vacation home. Possible other specifications. Find out the distinct guidelines. Make the numbers work well for you, if you can by adjusting the days you rent it vs. spend there yourself.

Again, as a second home and Virginia countryside expert – and a land and homeowner in Rappahannock County – I talk with people all the time about what will work for them and what they will enjoy. Reach out to me for a free consultation. Let us show around and show you some homes in the Virginia countryside or elsewhere. It will be our pleasure.

Have a great day and a wonderful summer!

Cheers,
Ken

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Arlington’s Pentagon Row’s Ice Skating Rink Reopens

Arlington’s Pentagon Row’s Ice Skating Rink Reopens next week, on Friday, November 15th. With a rehaul that includes a 50% larger rink and some new ice skates. Enjoy the fireplace as the weather gets chillier. The Grand Opening Celebration is Saturday, December 7th.

From Pentagon Row’s website:

Pentagon Row Skating Hours

Sunday 10am – 7pm or 10pm*
Monday Noon – 10pm
Tuesday Noon – 10pm
Wednesday Noon – 10pm
Thursday Noon – 7pm or 10pm*
Friday Noon – 11pm
Saturday 10am – 11pm
*If there are Ice Rentals we will close at 7pm and re open at 9pm

Rental and Tickets
Adults-$8
Children 12 and under-$7
Senior Citizens 55 and up-$7
Skate Rentals Figure or Hockey-$3

Discount Cards and Season Passes are available
Discount Card – 10 Admissions – $60
Individual Season Pass
Family Season Pass
Group rates
Ice Skating Rink Rental Contact us 703-418-6666

Parties and Special Occasions
Celebrate your special day at Pentagon Row. Your dedicated host will assist the group with picking out the right skates and equipment. In addition, once everyone is on the ice, the host will give a 25 minute skating lesson.
Birthday parties are $12 per person with a 6-person minimum. $72 deposit.
Tables may be reserved for your party to use.

For more information please call 703-418-6666 or email us at [email protected]

We hope this finds you keeping warm with the chilly weather expected next week. Have fun skating! It’s another reason that ARLINGTON ROCKS!

Cheers,
Ken & Team Yes I Ken!

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When and Where do I Start to Buy a Home? What is the No. 1 Best Practice to Save me Time and Money?

I have buyers ask me this often. With about half of my buyers being first time home buyers, I may get these questions more frequently than other Consultants.

Often, people come with these questions long after they have begun considering buying. The plain fact is that, could they turn back the clock and come to me with the questions before they began seriously thinking about buying, looking at homes online, going occasionally into open houses, Read the rest of this entry »

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What are the Best Questions to Ask Realtors I’m Interviewing to LIST and SELL my House?

This is so often a consideration for homeowners, let’s make it an ongoing conversation here. Consider this part one of an unnumbered series!

Some top questions include ones that draw out the solidity of the agent’s own business and that of her Broker’s (her office’s). Because, first off, is it not important to know that the agent is seriously dependent on doing great work for you in getting your home sold in order to be paid and hopefully have a profitable business, Read the rest of this entry »

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Friday Frivolity! Where’s Great Pizza in Alrington? Here are Five!

Here’s my list! (In no certain order, and not inclusive, not exhaustive – I need your help to finish it…)

1. Pete’s – In Clarendon

2. Z Pizza – Washington Blvd enoroute South towards Pentagon City Read the rest of this entry »

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