Q: What factors should determine whether IÂ decide to move or remodel?
A: Your personal needs, preferences and finances are all factors. If you’ve lived in your home awhile and prefer to stay in your school district or neighborhood, improving your existing space may work best for you. If a second bathroom is what you desire, it may also be cheaper to convert existing space than to relocate to another home. According to the American Homeowner Foundation, you can expect to spend 8-10% of your current home’s value when you move. Ask yourself if that money could be better spent on a remodeling project instead. Chances are you’d increase your home’s value, derive more pleasure from your home than you did previously, and save yourself the time, expense and headache of a move.A: The second home market has more ebbs and flows than the primary home market. Sales are iffy in a bad economy except, perhaps, on the high-end. That said, there is a growing trend toward the purchase of vacation homes. They are being bought for investment purposes, enjoyment, as well as retirement. In the latter instance, some people are buying with the idea of turning a vacation home into a permanent retirement haven down the road, a move that puts them ahead of the game now.
Some of the tax benefits of a second home mirror those for a primary residence. Before taking the leap, however, ask yourself if you can afford to carry two mortgages, maintain two households, and pay the extra utilities and maintenance costs. Also, learn about financing requirements and options, which can differ slightly from those on a primary residence.