Hello!

Thanks for your question. You can deduct interest on a second home, but there are some restrictions if you rent the home out. The IRS has a pretty easy to understand publication about this very question...

http://www.irs.gov/pub/irs-pdf/p936.pdf (See page two under "qualified home".)

Please let me know if I can assist you further. Good luck with your plans!

Brenda Mills
Windermere
360-319-0072 http://www.brendamills.com

I think one of the benefits of owning investment real estate are the tax benefits, I believe mortgage interest is deductible on investment property, espeially if it is second home you actually live in part of the year, that said, I would definitely agree with Tara, Check with your accountant for any tax ramifications of buying a home. There are some other tax advantages for investment property as well like depreciation, any cost of repairs and even mileage dedections for travel to deal with the rental, insurance premiums are deductable.
If your looking for a second home in Bellingham, I will be glad to help you find one.

Hi there,

While there are many advantages of buying a home in this economy, I believe your loan interest is only deductible on your primary residence, but check with your accountant for verification. A few advantages of buying a investment property in this environment would be that it's a relative secure investment compared to other investment avenues (secured by real estate opposed to nothing, ie.. stock market), low prices, low interest rates, depreciation (tax advantage), cash flow (if you decide to rent the property), etc.

Again, I'm not an accountant but I can't point you in the right direction if you're looking for a good RE accountant. Also, if you'd like more assistance feel free to contact me or visit my website.

Have a great day!