Will the Pandemic Change the ROL of Your Holiday Home?
Although buying a holiday home is a common financial goal among our clients, many people find that the hassles outweigh the benefits.
Going to the same house every year at vacation time can get old.
Paying two sets of home bills – including two mortgages – can get really old.
And you might feel guilty about spending money on trips to other locales when that vacation home is just sitting there, waiting. I know I do – I’ve owned a holiday home in Breckenridge, Colorado for the past 12 years!
However, the pandemic has cast owning a second property in a whole new light, especially if you’re self-employed or a business owner.
Here are three reasons why that house on the golf course or beachfront condo in Ibiza might give you a higher Return on Life in the future.
1 – WF(H)H.
Likely, the Work From Home (WFM) movement popularised by millennials is going to become a permanent fixture of how many companies do business.
WFH can have some significant benefits, like setting your own schedule, working at your own pace, and spending more time with your family.
On the other hand, some are finding that WFH causes boundary problems, especially if the H doesn’t have a dedicated office for the W!
Whether you need a change of scenery or just a couple hours to yourself, your holiday home could become your new part-time office.
Working from your vacation house could create new opportunities to broaden your customer base. A more inspiring work environment could also lead you to a big business breakthrough.
And business owners might be able to wrangle some tax advantages from using a second home that isn’t your primary residence as an office space.
2 – Put your holiday home to work.
Another common bother that turns many people off owning their holiday home is … owning another home.
In addition to paying the bills, there is also the necessary upkeep like landscaping and home repairs to consider.
Home Owner Association fees and property taxes can turn that dream vacation destination into a beach bummer.
However, nagging issues like keeping the grass cut or calling up a plumber might not bother you as much if you’re spending more time at your holiday home.
Plus, if a part-time job is compatible with your work schedule, your temperament, your tax bracket, and your homeowner’s insurance, you might enjoy being a landlord.
Covid-19 has created a rising demand for smaller getaway vacations at houses where families can maintain their household bubbles. Instead of racking up bills while you’re away, your vacation home could be padding your nest egg.
3 – Travel safer.
Of course, if your family’s other travel plans have been disrupted by Covid-19, maybe you’ll just start using your holiday home for more of your own holidaying.
Get back in touch with the things that made you fall in love with this second home in the first place, whether it’s the small-town ambience, local golf courses, ski and cycle slopes, or fishing just outside your back porch.
A workday stuffed with Zoom calls and Slack chats is going to be less of a headache if you can clear your head with a stroll along the beach after lunch.
Plus, you can use your holiday home as a hub to make extended travel safer and less stressful.
Instead of fretting about getting your kids in and out of an airport or Motorway Services bathroom, plot your road trip around a stop at your place.
After a couple of nights in the safety of your home away from home, you might have a whole new selection of convenient day trip options at your disposal.
Buying a home is one of the most significant Financial Planning transitions that we help our clients prepare for. Buying or selling a second home adds a whole extra layer of complexity to your financial planning.
If Covid-19 has given you a new perspective on owning a holiday home, let’s have a conversation soon.
We’re happy to coordinate the important details with your tax adviser, insurance broker, and other key professionals so that all your assets keep providing the best possible life for you and your family, as well as giving you some real perspective!
But if the USA opens up soon, the conversation might be on Zoom!