2 Differences Between Investment Properties And Second Homes
Investment Property Versus Second Home
When it comes to investment properties and second homes, many people might not know that those are two very different things. People can sometimes use the two terms interchangeably to describe real property that is not their primary residence; but there are some very distinct differences between these two types. As your Luxury Orlando Real Estate Team, we’ve come up with a few examples to explain the differences of these two terms when it comes to homes for sale in Disney.
1. What Is An Investment Property?
An investment property is a property that is not your primary residence. It is also a property that is purchased to generate an income, profit from appreciation, and take advantage of tax benefits. If you are purchasing a home for sale near Disney, FL to make a profit, rather than used as personal residence for your family, that home will be considered an investment property.
There are a few different types of investment properties:
– Residential rental property
– Commercial property
– Property purchased to flip for a profit
2. What Is A Second Home?
Whereas an investment property is used to generate income, a second home is a residence that is purchased with the intent to occupy in addition to a primary residence. A second home is typically used as a vacation home, but they can also be a property that you visit on a regular basis. Usually, to qualify for a second home loan, the property must be located in a resort or vacation area, such as Orlando. When you decide to buy a home for sale near Disney World, you should be aware that second-home loans typically have a lower interest rate than investment property loans and most of the time they will include a Second Home Rider with the mortgage. The Second Home Rider states that:
– the borrower must only use the property as a second home
– the property must be kept available for the borrower’s exclusive use
– the property cannot be subject to any timesharing arrangement or rental pool
To schedule a consultation with the Luxury Orlando Real Estate team, please call us today at 407-705-7635 or submit our contact request form.