Enjoyment

First, and foremost, a second home offers a getaway from the stresses of everyday life. It can allow you the opportunity to recharge, relax and gain perspective. A vacation home can provide you with a place to spend quality time to spend with family and friends. Not surprisingly, studies have shown that families who own vacation homes take more family vacations.

Investment

Vacation homes offer an array of investment opportunities:

• Diversification:  The stability of real estate value makes it a good choice to diversify the non-aggressive portion of a portfolio.
  
• Appreciation:  Buying a vacation home today is like buying California property in the 70's – vacation home properties are low relative to where they are expected to be once the Baby Boom generation begins to retire in force. This tangible asset should appreciate over time while providing life-long fun for you and your family.
  
• Rental Income:  Renting your second home is often a good cash source, which can help pay down your mortgage.
  Taxes and Mortgages: A second home may also provide federal tax deductions and tax-sheltered income. Owning a second home will usually allow another mortgage interest write off.
  
  

Retirement Planning

It's a good idea to get a head start on retirement living. Your favorite location might be a lot more expensive in 10-15 years when 73 million Baby Boomers begin retiring. Find your second home before prices become too inflated and you're priced out of the market. The 1997 tax law changes allow couples to avoid paying capital gains taxes on profits of up to $500,000 on the sale of a primary residence. Equity in your primary residence can help purchase a retirement home.