The Perks of Owning More Than One Home
There are many tangible benefits that come with owning more than one home, the primary of which is that you’ll be able to strengthen your investment portfolio. However, making this type of investment can also help you build wealth, enjoy a new location, and leave a legacy. The following goes into more detail about the many perks of investing in and owning multiple homes.
Allows You to Effectively Build Wealth
When you purchase and own a second home, you’ll be able to build wealth much more effectively than before. Home equity has been rising significantly in recent years as a result of the COVID-19 pandemic, which caused the Federal Reserve to lower interest rates considerably. Once interest rates were lowered, buyer demand skyrocketed.
Even though rates have since increased, buyer demand still remains high, which means that home values continue to increase. By purchasing a secondary home now, you will be able to benefit from an increase in home values for both properties that you own.
Your potential profits are even higher if you rent out your home. Keep in mind that building wealth before you’ve reached retirement age will give you more savings for retirement as well as more assets that you can provide to beneficiaries when you pass.
Leave a Legacy to Your Children
If you want to leave a legacy to your children, an easy method of accomplishing this goal involves buying a second home. Along with providing you with more assets in the long run, having a second home means that the home can be passed down to your children when you die. Real estate is also one of the safer investments you can make. If you want to leave a high amount of assets to your children, it’s much more likely that real estate will maintain or increase its value compared to other types of investments.
Bolsters Your Real Estate Portfolio
Real estate investments are notable for being relatively safe investments that can still provide you with high returns. If you decide to rent out the home, you’ll receive consistent monthly payments that you can count on. Building an investment portfolio that’s focused primarily on real estate investments is a great way to protect against future uncertainty.
In comparison to real estate investments, stock investments can be far more volatile. The past few years have also shown that it’s impossible to predict what events will occur in the world. While these events can damage a stock and bond portfolio or a mutual fund portfolio, home values have increased or remained consistent since the stock market crash in 2008. This is a trend that shows no sign of slowing down.
Enjoy Different Scenery and Location
Along with the standard benefits that your estate will receive when you own more than one home, you’ll also be able to enjoy different scenery and a new location. Let’s say that you purchase an oceanfront property along the coast. You could remain in your current home throughout most of the fall, winter, and even spring seasons. Once the warm summer months arrive, your second home can provide you and your family with a nice change in scenery.
Keep in mind that you have many different options in regards to where your new home is located. If your existing home is in a suburban setting, you might be interested in purchasing a more rural property. Having the ability to move between two different homes gives you a certain amount of flexibility that’s otherwise difficult to find.
Helps You Lock in Expenses
There’s always a possibility that interest rates will increase in future years. If you’re not yet at retirement age but want to live in a different home once you retire, buying that home now gives you the opportunity to lock in a fixed interest rate, which means that the interest rate won’t change regardless of how much national interest rates increase. Most fixed-rate mortgages are available as 15-year or 30-year loans.
As long as you can afford the initial down payments as well as any subsequent monthly payments, owning a second home is something that has very few downsides. Buying a second home gives you greater flexibility in how you live and allows you to have a more stable investment portfolio.