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Real Estate

Second Homes

What is the difference between a second home and an investment property?

According to experts at the legal website www.Nolo.com, an investment property cannot be your primary residence. It is real property used to earn income through direct rental agreement or lease, through appreciation over time, or for certain tax advantages. Typically, interest rates and conditions on investment property loans are higher and more stringent than loans for second homes. You may occupy a second home in addition to using your primary residence, and it typically may be used as a vacation home or for business trips. Only the borrower may use the property. It may not be part of a timeshare agreement or rental pool, may not fall under the terms of any rental agreement or lease, and may not have a company managing the property’s occupancy or use. Second home loans may have more favorable rates and conditions than loans for investment properties.



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