REAL ESTATE Is having two homes too much?

This column is all about being careful what you wish for. Some people love their childhood home and long for the day they will inherit it from their parents. Others know if they just had that beach house their life would be complete. Well, I’m here to tell you that both dreams do not come as easy as you might think.

Inheriting the family home has been a tradition in the country for a century. It made a lot of sense to children who needed the space and location where they grew up for their new families. It wasn’t uncommon for siblings to make arrangements to buy out other siblings who wanted the property and, mostly, it was a good idea and worked.

Now, however, the family home may be worth a lot more than anyone in the family anticipated. Higher mortgage rates can make it impossible or impractical for any of the heirs to maintain the property or buy it outright. In addition, tax liabilities need to be calculated by a professional

Castles in the Sand

LOUISE BOLGER

to determine if or when the best time to sell is.

If keeping the family home is a viable option for the heirs, then it might be a good option to use this windfall as a second vacation or investment home. Owning a second home comes with a long list of pros and cons, just ask any owner on Anna Maria Island. But, if you’re starting with a property that is inherited, you’re at least starting at the top of the pro list.

The biggest expense in owning a second home is financing it. Financing costs are typically higher for vacation homes with higher interest rates and larger down payments generally required. Fannie Mae and Freddie Mac have also raised fees for second home loans recently. If this is an inherited home, financing is not the issue, but there are plenty of other issues.

Coastal Florida, in case you haven’t noticed, is experiencing insurance premiums that are rising with shrinking options. The closer you are to the water, the greater your risk of flooding and wind damage in a storm, especially for older homes that may not have been built to current code. It’s certainly not impossible to get insurance on older properties but insurance companies are looking for new roofs at a minimum. In fact, you don’t even need to have a waterfront home for insurance companies to require a new roof before they will write insurance or give you a deadline for when that new roof needs to be installed.

Maintenance of a second home is always an issue, especially if the owner resides several hours or several states away. Maintenance companies will maintain issues in the home and check on it regularly if no one is there, but these services all come with a price. Renting a second home certainly is an option, but at the end of the rental, the property needs to be cleaned and checked for repairs. It’s a lot of work for owners and it’s not unusual for second homeowners to decide at some point it’s too much work for the time they use the property.

The flip side of this is the income that can be realized from second homes. Just look at the rental prices on Anna Maria Island. Again, consult your tax professional if you plan to use the property for both personal and business use. Every owner’s situation is different based on their personal use, the amount that can be written off and income.

There is no one answer for everyone. Owning a beachfront property or a ski-in, ski-out chalet may be your dream. Just be careful what you wish for.