Buying what is considered a second home before purchasing the more conventional first is beginning to appeal to some renters. Those in metro areas are watching the red hot housing market and may be interested in a place of their own. With remote work trending, they can take advantage of the opportunity to spread out and buy a small getaway home with a vacation-first mentality, Apartment Therapy reports.
These second-home buyers may be drawn to country cottages or mountain cabins while they continue to rent apartments in the city. They may search for their second home in a less competitive market than their current one, too.
Jamie Manning, founder of the real estate blog Exposed Brick DC, told Apartment Therapy that she and her husband didn’t expect to purchase a vacation home in Charlottesville, Va., before ever buying their first property in the Washington, D.C., area. “[We] see this as a true second home, somewhere we can spend weekends and possibly work remotely during the week,” Manning told the publication. “This idea had been on our radar because real estate costs are so high in D.C. that we felt buying here may not be realistic. We have been diligent and saved and were anxious to make some kind of real estate investment. We were craving a change of scenery and a different pace of life.”
Low interest rates may be attracting some renters to the thought of buying, but they may be priced out of their own area as many markets have seen escalating home prices over the past year.
A second home could offer these first timers a financial benefit and investment while they continue to rent in the city, financial analysts say. For example, Lisa Greene-Lewis, a certified public accountant, says that you can deduct mortgage interest on a vacation home similarly to a primary residence and deduct property taxes up to the cap. Some buyers may also decide to rent out their secondary home as a form of supplemental income.
“A lot of people were excited to purchase getaways during the pandemic because of limited travel options,” John Coleman, a real estate pro who works with many first-time home buyers, told Apartment Therapy. “Buying and renting out on Airbnb has been very lucrative for some, and it will be interesting to see if that can hold up moving forward.”
Source: “Buying a ‘Second Home’ First Might Be the Best Real Estate Move of 2021,” Apartment Therapy (April 13, 2021) and “Should You Buy a Second Home as Your First Home?” The Mortgage Source (2021)