A Second Home and Real Estate - Three Options for Second Homes
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Three Options for Second Homes

Takeaways

  • Long-term goals can influence where the second home fits into your portfolio and plans.
  • A temporary property might be a way to get started investing in real estate.

Did you know?

  • Around 60 % of second home owners also own a third home, or more.
What are your long-term goals?A good way to categorize second homes is to break them into three basic groups based on how you view the real estate.

The Permanent Second Home

This is a second home that is most likely not rented out under any circumstances and will not be sold. The permanent second home is a place you want to spend a lot of time, and might even be planned for the future primary residence.

A permanent second home might be an inheritance from your family, and it could be that ideal second home purchased and cherished for your personal use. This home could just as easily be a property that once fell under a different category and over time revealed its charm.

The Transition Second Home

Exactly like it sounds, this second home resides in a transitory state. You like it, but don’t love it. You might keep it and make it a permanent second home, but at the same time you watch the market value of the real estate and wouldn’t be heartbroken to let the home go for a tidy profit.

Most second homes that aren’t pure investment property fall into this category. The transition second home might be a vacation getaway you use a few weeks out of the year, or even a rental you’ve always liked and considered moving into. The key is this second home is full of possibilities for you. It might be sold at some point, but that decision hasn’t been made at this point.

The Temporary Second Home

This piece of real estate is property you know you will be selling at some point, no debate needed. Not always, but very often, the temporary second home is an investment property. A foot-in-the-door property purchased simply to begin the process of owning second homes and selling them – or trading via a 1031 exchange – to get into more interesting property is a classic example of the temporary second home.

These three categories can even be used to plot a second home roadmap. Buy into a temporary second home and build income through rental, move that property through sale or a trade and get into a transition second home that appeals to you. That place might become a permanent second home, and if not, the experience of seriously considering what you want in a permanent second home will help make that search much easier.

Search for Second Homes for Sale

To search for a selection of second homes for sale, please visit lifestylehomesearch.com, or visit the website of a GMAC Real Estate Office that serves the area where you'd like to buy a second home. To learn more about buying Second Homes or Vacation Homes, explore the rest of this section, or contact a GMAC Real Estate Agent.