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Investment Property

Nationwide Bank Second Home vs. Investment Property The decision whether to purchase a second home or an investment property depends on your intended use for the property, but there are other factors to consider from tax laws to mortgage requirements. Second Home A second home is one you live in for part of the year, rented fewer than 14 days/year, and at least 50 miles from primary residence TAX Requires separate homeowner's Tax advantages Insurance policy Write offs same as May have higher premiums; riskier to cover primary residence Property tax, mortgage interest, homeowner's Take out additional coverage if insurance needed (i.e. natural disaster) Ask primary insurer to add a second policy for seamless process Can write off 100% of interest paid on up to $1.1 million of debt. +50 mi. Investment Property An investment property is purchased to generate Income, rented 14+ days/year and can be near primary residence. $4 Requires special homeowner's insurance Landlord insurance (standard polices won't cover damage if used as a rental) Covers property damage, liability, and loss of income Many write offs If your Adjusted Gros Income (AGI) is less than $100,00, up to $25,000/year in losses can be deducted to Property tax, mortgage interest, repairs, utilities, travel expenses, home office expenses, wages offset income like salary TAX paid for services, insurance premiums, 50% of depreciation Tax advantages Some rental income Rental expenses deductible up to the FREE can be tax free 14 days/less, keep rental income tax-free/14+ days report all rental income level of rental income Getting a Mortgage for Second Home/ Investment Property BANK Lenders more cautious since the borrowers don't live on %24 property on a regular basis. 1st Harder to qualify Monthly mortgage payments from primary residence are counted in debt Higher down payments Higher down payment Higher interest rates Refinance primary Average 25% of home's full sale price. Can be up to 32% on jumbo loans loan to reduce monthly payments/ loan term Nationwide, the Nationwide N and Eagle and Nationwide is on your side are servicemarks of Nationwide Mutual Insurance Company. © 2017 Nationwide. Sources: https://turbotax.intuit.com/tax-tools/tax-tips/Home-Ownership/Buying-a-Second-Home/INF12015.html https://www.nationwide.com/homeowners-insurancefor-rental-property.jsp?NWOSS=investment+property%20&NWOSSSPOS=1 http://www.investopedia.com/articles/pf/07/vacation_home.asp?lgl=myfinance-layouthttp://www.nolo.com/legal-encyclopedia/top-ten- taxdeductions-landlords-29497.html https://www.irs.gov/businesses/small-businesses-selfemployed/a-brief-overview-of-depreciation http://www.investopedia.com/articles/personalfinance/013014/tax-breaks-secondhome-owners.asp?lgl=myfinance-layout https://smartasset.com/mortgage/weighing-the-optionson-second-home-mortgages II X X X

Investment Property

shared by sebamelchor on Oct 12
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A complete analysis of what is the best way to invest in a property.

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