Listing Courtesy of VICKIE YORK AT THE BEACH REALTY
In Ocean View real estate, there are happy words (“sold!”) and there are troubling words (“default”). Because of the associations they conjure up, some phrases just automatically make us happier. Two of the leaders in the positive category are the magical words, ‘vacation home.’ All by themselves, they can trigger a smile. Why not? “Home” is comforting; “vacation” is fun. Put them together in “vacation home” and you’ve got a double positive. It’s a real estate equivalent of Jimmy Buffett’s Cheeseburger in Paradise.
As the economy recovers, some American families are doing more than just smiling at the idea. The Wall Street Journal says that vacation home sales jumped more than 50% in 2014—up from 717,000 the year before. Quicken Loans reports a jump “in both the number and dollar volume of second home mortgage applications.”
To a Ocean View homeowner with sufficient wherewithal, there are some practical, real life incentives for moving the idea from daydream to the ‘to do’ list. The primary motivation is what comes first to mind. Just as a vacation is a welcome respite from the day-to-day, a vacation home needs to qualify as a destination that is pleasurable in itself. Where that could be differs for everyone, but whether it be the beach, desert, mountain, lake, cultural metropolis or outdoor sporting mecca, any Ocean View homeowner’s vacation home should be a haven inherently suited to relieving the stress of the workaday world. Although it would seem to be properly classified as a pure luxury expense, vacation homes can be more financially sensible than that.
The Kiplinger web site has a number of observations for vacation home buyers. It finds that some mortgage interest rates on second homes have lowered to first-home rates. Another alternative is the “favorite source” for all-cash purchases: a home equity line of credit. According to Kiplinger, “Mortgage interest on a second home is deductible on as much a $1 million in principal for both homes combined.” If lenders calculate eligibility via the Fannie Mae and Freddie Mac guidelines, a borrower’s total debt payments should not exceed 36% of gross income…but if the second home is to be rented, that income can be part of the calculation.
Which brings up some other possibilities. A vacation home can not only cut down on vacation expenses (hotel and restaurant prices are rising, after all); if rented out some of the time, it can contribute offsets to its cost. To take advantage of IRS rules regarding personal versus rental classification, you should consult a tax expert. Since a quarter of vacation homes are rented out at least some of the year, it’s a tactic that deserves investigation.
Perhaps the advantage that’s talked about most for second home buyers is the contribution it can make toward retirement. If a retiree ultimately converts a vacation home to principal residence, profits from the former home can make a handsome contribution to the retirement nest egg. And if by retirement time that vacation home has been paid for in whole, it can make for an even more pleasing financial picture.
For an Ocean View resident with sufficient resources, purchasing a vacation home can be a practical as well as emotionally sustaining venture. If it sounds like an idea worth investigating further, talk it over with your financial advisor—and I’ll be standing by to help with any and all real estate considerations! Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com.
Lewes home owners don’t have to live in the kind of January landscape that features blizzards and snowdrifts to want to winterize their home before the onslaught of the chilliest temperatures. In even the mellowest of climates, winterization is a way to shrink energy bills. And even if the recent shocking downward spirals in world oil prices have sent your home heating costs to the bottom of your budget-tightening "to do" list, remember that if and when you eventually put your Sussex County home on the market, low utility expenses can be a strong selling point. Regardless of how you set your internal thermostat, theBig Three of energy cost reduction always include the following:
Raise the Air Temp; Lower the Water Temp
Two tips that could seem counterproductive will cut energy costs in many an Sussex County home. You’d think you should just switch ceiling fans off until spring, but not so. For cooling, the blades are set to spin counterclockwise so that cool air won’t be wasted down near the floor. The tip is to reverse the fan’s rotation to clockwise. That will act to push warmer air down from the ceiling. Wait until the blades come to a stop, then slide the small direction switch (it’s usually next to the pull cord). The second tip is actually one you can do any time of the year since hot water heaters are usually set to heat to 140 degrees. In truth, most of us don’t need it that hot. Try resetting the temperature to 120 degrees, and see if it’s sufficient. If so, in the course of a year you’ll save more than a few dollars!
Block Air Creep
For a few dollars, a tube of caulk can be a final defense against the creep of cold outside air. Use caulk to seal cracks in the walls and gaps around your windows and doors. In extremes, there are inexpensive extra measures, such as see-through plastic sheets to cover windows with a second seal (doing both would keep the most remote Siberian cabin as buttoned-up as a baby kangaroo). If a drafty door will have to wait until spring for full renewal, an interim trick is to roll up a bath towel and place it against the threshold. This temporary fix keeps out the worst drafts and doesn’t cost a dime.
Take Care of Your Air Conditioner
If you have water-served central air, during the colder months when it’s out of service, good maintenance requires draining the water hoses. Split air conditioners don’t have that issue, but some of them need an exterior cover for preventing drafts (if you haven’t felt any on chilly evenings, it’s not necessary). If you haven’t already removed any window units, better go to the hardware store to buy exterior covers: a lot of chilly air can make its way in through uncovered vents.
The Big Three tips alone comprise a Sussex County home winterization program that costs less than a burger and fries—yet can result in measurable energy savings. If you have found any other simple energy savers, I hope you’ll share: drop me an email, or give me a call at the office!