Start spreading the news … New York real estate is so expensive many are opting to remain renters in the city they work in during the week, and instead plunk down their case for a more affordable second home for weekending, a recent report from CNN Business found.
“Starting with a second home can be a reasonable choice for many urban professionals, said Malissa Marshall, a certified financial planner with Soaring Wealth,” the article said. “‘The ability to rent out the property easily on home-sharing sites makes it a more affordable way to grow equity.'”
And the decision can come with some financial perks, too. As Marshall mentioned, there is the ability to list the home on Airbnb and the like on weekends and times you won’t be using the home.
But there is also the fact that the smaller mortgage makes for a manageable monthly payment, and brings tax advantages, too, since homeowners can deduct their mortgage interest from their income taxes on home loans up to $750,000.
“In New York City, $750,000 doesn’t go a long way,” Svetlin Krastev, an investment advisor with Black Sea Gold Advisor, told CNN. “But when you buy a home for $300,000 or $400,000, you can get that mortgage interest deduction.”
And buying a home a couple hours or so from the city also means you’re more likely to use it.
In 2019, home surveys from the National Association of Realtors found that buyers said the ideal vacation home is located within a two-hour drive of their primary residence.
It also dovetails with the NAR’s 2019 U.S. Vacation Home Counties Report, which found that several locations within a couple of hours or so from New York where people were purchasing second homes.
In fact, Cape May, New Jersey, topped the list of vacation home counties where second home mortgages were the largest share of home purchase loans.
For the full CNN story, click here.