Having a vacation home in a different country comes with several financial benefits and is a great strategy for those who are looking to invest in their financial portfolios.
With any financial investment, it is important to set up the portfolio in a way that is diversified and can bring you future returns.
That my friends, is exactly what buying an international vacation home can do! Here are just a few financial benefits that I have come up with:
Diversify your portfolio – having your eggs in one basket is never a good idea when it comes to your investment portfolio and those considering real estate as a way to profit may think twice after reading this. Anyone who has kept up with the economics of America has noticed the housing market is not very stable. If you invest all of your extra capital into the domestic real estate and the market crashes, you will be scrabbling around to recover your money. However, buying a vacation home in another country means you are not subject to the same domestic market volatility and therefore not looking at the same lose.
Easy Money – Everyone wants to make easy money, and the idea of passive income is what keeps investors investing. When you buy a vacation home, there are a few options for getting a return on your investment. The most popular one is renting your home out when you are not there. You have heard of timeshares, in a sense, you could do the same thing. Find a management company to lease your vacation home out during off seasons for a way to earn some easy passive income.
Save money – The average American spends over $3K on a vacation per trip, this includes lodging, meals, and entertainment. Consider the amount of money you will save by owning a vacation home! You no longer have to worry about your favorite hotel getting booked up or spending money on out to eat expenses for every meal. With a vacation home you simply show up, and you have immediately transcended into vacation bliss in your home away from home!
These are just three financial benefits of owning an international vacation home, but there are some excellent tax benefits as well. Depending on the country, you may be able to deduct some or all of your mortgage interest on your vacation home.
Talk to your accountant and your investment banker for a full list of financial and tax benefits of owning a holiday home!
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