A second home is a luxury that many people dream about. Owning a second home can also provide practical benefits. For baby boomers who are considering downsizing, relocating, or a split-living arrangement in retirement, purchasing a second home before you retire can make sense. Here are five potential benefits:
Build equity in an alternative investment. Home values have fallen, even in vacation home markets. This presents opportunities for second home bargain hunters. When home values rebound, homes in high demand locations, such as lakefront property, should appreciate quickly. Also, depending on how you use your second home, some of the capital gain when you sell it may be tax-free.
Test a retirement destination. Maybe you are a city dweller fantasizing about retirement in a rural or active adult community. Perhaps you are tired of yard work and think condo living is for you.