Real estate is a lot like life: Sometimes, when one door closes, another one opens. Case in point: The slumping real estate market has hurt many property owners, but it has also provided a real opportunity for people looking to buy a condominium for a vacation home.
Optimism isn't always a frame of mind. It also has a lot to with your finances. Just ask anyone with a good deal of home equity who's looking to buy a vacation home. For these people, the real-estate slump has put them in a good mood-especially when it comes to buying a second home.
Property owners who want to buy, but don't have to sell, have a silver lining in the cloud of shrinking home equity. They may even be sitting on a golden opportunity. The market slumps in places like Nevada and Florida have resulted in a glut of condominiums, residences that could be used as ideal vacation homes. With a simple cash-out refinance of a primary residence, a property owner can take advantage of some bargain-basement deals and get the vacation home of his dreams.
Low home values mean great investment
Timing is everything for investors, and property is no different. Areas that in the past enjoyed skyrocketing home values, including California, Florida, and Nevada, now offer condominiums at rock-bottom prices. People who are looking for a second home will get two benefits effectively with one purchase.
First, they'll be getting a nice vacation condominium in a very desirable location. People who might not have been able to swing an area's hefty price tags in the past can now afford the markdowns. Second, they'll have a great investment for the future, once current low market prices rebound.
One refinance later, a happy condo owner
Tapping your equity to purchase a condominium also has multiple financial benefits. A refinance in today's market allows you to take advantage of the low interest rates that have resulted from numerous Federal Reserve rate cuts. With interest on the loan being tax-deductible, you'll also enjoy tax benefits.
Condo living is a perfect fit for the vacation home shopper. As part of a condominium association, you, yourself, do virtually nothing to maintain the grounds. Homeowners insurance tends to be lower. Because the condo is smaller than a house, cleaning and maintaining the interior is also easier and faster. You reap all the benefits of a nice home, without having to engage in the back-breaking labor required to maintain a residence.
The scope of the real estate slump is enormous; however, it's also a market correction. For someone looking for a vacation home, it's a correction that can result in multiple long-term rewards. A homeowner can find a great condominium in an ideal location, in choice destinations such as Florida, California, and Nevada. With low-interest rates, and even lower home values, a second-home buyer is one refinance away from buying a great vacation home.