An investment property has the sole purpose of earning income for the owner. That income can be achieved in two ways, monthly income and appreciation over time. If everything goes to plan, an owner succeeds in both categories. A vacation or second home is not rented out, but used by the owner (and their family). It does not provide a monthly income, but it can appreciate over time. A vacation or second home can be rented from time to time, but there are restrictions since it is not an investment home. See below to find out more.

A person who wants to own a second home has to earn enough income to cover the costs of both the primary residence and the second home. What little income is earned from occasionally renting a second home cannot be used to qualify for a loan. Additionally, a second or vacation home cannot be a multi-unit property.

Typically, a second or vacation home must be over fifty miles away from the primary residence, but there are exceptions. For example, one can have a second home in a metropolitan area, like Chicago. This is a case by case question, so it is best to contact us and explain your situation. We can then provide a concrete path on what programs are available to achieve your goal.

Yes… and no! There is a ratio of time (days) that an owner can rent out their second/vacation home, compared to the days when the owner is occupying the property. The first thing an underwriter will analyze is the Schedule E on a tax return. That information will be used to determine if that property (from a lender’s point of view) is a second home or an investment property. We can evaluate your specific situation to determine what programs are available to you.