Lease Options
By Elizabeth Dougherty
We've all heard friends talk about heading
to the "condo" for the weekend. A little
place on or near the water where you can
put up your feet and gaze at the sunset is
something most of us dream of. While you
may turn green with envy at the thought,
owning a second home is easier than you
think. In many cases, it can be affordable
too.
Many condo associations have rental
programs for absentee owners. The
association will rent your condo for you
(for a small fee) while you are not using it.
If you pick a particularly popular,
tourist-driven area to buy a condo, rentals
may pay your entire mortgage and even
reap a small profit. It would certainly
offset some of your costs.
Don't forget about the tax advantages.
The rule of thumb is, you can write off the
mortgage interest on your second home if
you personally use it at least 10 percent of
the time or 14 days, whichever is greater.
So, while renting out your place may be
profitable in the short run, make sure
you stay within the IRS guidelines (see
IRS Publication 527) or you could lose a
valuable deduction. Recreational vehicles
and boats can also be considered second
homes, as well. If it has cooking, sleeping
and bathroom facilities, it qualifies for the
deduction with the same usage guidelines.
The best way to begin searching for a
suitable second home is to keep your eyes
and ears open. A local Realtor can give you
a list of properties for your consideration.
Condo associations will sometimes give
you a line on a good deal. When people
have financial problems, one of the first
things they sell is their second home. There
are bargains out there; you just have to
look for them.
Consider low maintenance properties
that don't require a lot of upkeep on your
part. Villas, condos and town homes are
all easy to maintain. The association will
make sure the grass is mowed, the trees
are trimmed and the pool is clean. After
all, you don't want to be cleaning the pool
at your vacation home, do you? I'd rather
be sipping a slushy drink out of a hollow
coconut, myself.
Before you purchase a property that
involves a condo or homeowner's
association, do a little research. Is the
association managed by a reputable
company? Take a look at last year's
budget, if you can. Do the fees being
charged for maintenance seem
reasonable? Do you know anything about
the companies that are maintaining the
property? The last thing you want to
do is get involved in a property where
the condo association president has his
brother doing all the maintenance work.
You certainly don't want to be wondering
about things like "kickbacks" while you're
floating around in the pool.
Some final things to consider about
purchasing a second home include
location, view and noise levels. If you
are used to living in a house without
neighbors close by, condo living may take
a bit of adjustment. You may occasionally
hear people next door or walking down
the hall. The location of the unit may not
be ideal or you may have an obstructed
view. Spend some time in the unit you are
thinking about purchasing. If you can rent
it for the weekend, do it. And don't forget
your bathing suit.
Elizabeth Dougherty, a resident of
Auburn, is a former Real Estate Broker
and Mortage Broker. She can be
reached at EADougherty1@aol.com.
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