What’s the Difference between Purchasing a Home as a Second Home versus as a Rental Property?
The two biggest differences between the two are the following: The loan progams that will be available for financing, and the way the Internal Revenue Service (IRS) will treat the property for tax purposes. A rental property will require investment property financing, which usually carries a higher interest rate than primary residence properties, and you may have to put additional funds down because lenders see investment properties as a loan with slightly higher risk. You are also obligated to pay taxes on the income you receive from a rental property, whereas a second home will probably not have any rental income.
Related Questions
- I need water turned on at a home which is a rental property or a foreclosed/bank-owned property, and whose water is provided by the Town of Leesburg. How do I set up water service?
- Whats the difference between purchasing a home as a second home versus a rental property?
- Why Invest in a Rental Investment Property?
