With the housing market down, now may be a good time to think about buying a second home. Investing in real estate still can be profitable. Not only are the current prices low but if you can turn it into a rental, you could end up making a monthly profit on the home – depending on how much it is rented.
To get the best possible deals, check with the banks for a listing of foreclosed properties. Just be careful of the condition that some of these properties may be in.
If you're looking at vacation properties and you find that many are very expensive, and you find no way that you can afford them on your own. I could advise you going in with your family members.
Going in with family members can work but it can also make things very complicated. Many families do not speak today over mixing business with family. But that's not to say it will not work. It's certainly an option.
But I encourage you that if you do decide to go in with family or friends to purchase a vacation home, you should be sure to draw everything up with and attorney and be sure that either of you has the ability to get out at any time.
If you prefer to set goals and do things on my own, start small (on your own) and work yourself up to that “ultimate” property. The risks are much lower.
It's much riskier to invest in real estate with the idea of flipping for a profit right now, keeping a property long term as a rental is ideal. When the market goes back up you can decide if you want to hold on to the rental or sell for a profit at that point.
To make your vacation home pay for itself, rent it out as often as possible. This doesn't mean you won't get to use it yourself. Vacation rentals can take in a high weekly rent, especially if the home is located in a prime area.
You may even want to consider buying a vacation home in another state, province or country where housing prices are extremely low such as Florida, California and Arizona. In Canada there are pockets where you can invest in Vacation homes. The secret with vacation homes is to find pockets where the town is a destination place for tourists.
Since these are also popular vacation areas, your potential for profit is greater, although hiring a property manager would probably be necessary and should be factored in.
You will want to take advantage of this property as much as possible. Beside the income you will bring in from rent, there are some expenses that you can offset against this income. As far as claiming expenses, this can vary from state to state, province to province and country to country. Speaking to your accountant might be a good idea before you decide to purchase a second property or even rent out suites in your own personal home.