Should You Sell Your Long Beach Island Home Before Buying a New One?
Buying and Selling LBI Real Estate
Should you sell your Long Beach Island home? The LBI real estate market is one in which we see a great number of homeowners looking to upgrade or downgrade their home. This is especially true for those looking to either move to a location such as the oceanfront or bayfront. Additionally, there are many current homeowners looking to increase the size of a home without building new. This begs the question should you sell your long beach island home before buying a new one? The answer to this question will of course depend on the individual’s financial picture but there are certainly advantages…and disadvantages… to keeping a second home on LBI.
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Should You Sell Your Long Beach Island Home Before Buying a New One?
A large percentage of the LBI real estate market is comprised of rental properties. These rental investments can realize long-term equity growth and offer great stability as a passive income source. Depending on the location of your home on LBI, keeping your current home before buying a new one offers many advantages.
If you have a great deal of equity in your current home, you can refinance the property to take cash out to help with the purchase of the new home (and allow the rental income to cover the new loan). The rental income from summer rentals on Long Beach Island can help to carry the costs of the borrowed money on either the new home or the equity loan as I mentioned above. As a seller you should always keep your tax situation in mind. Depending on when you purchased the property, you may face a large capital gains tax which keeping the property as a rental would avoid (but keep in mind you should always speak with your accountant on tax related issues).
The LBI real estate market has a very strong summer rental income potential, especially if a home is on the oceanside, oceanblock, or oceanfront. It is not uncommon for these homes to rent every week of the summer and many of the off-season weeks as well. With that kind of rental income, it is easy to see how refinancing a home and using the rental income to cover the costs makes sense. It helps a homeowner stay more liquid by keeping the money in the bank and having tenants pay for the mortgage debt.
Of course, the above advice is all dependent on one’s individual financial picture and I will certainly defer any advice I offer to an individual’s financial planner, accountant, etc. Strictly based on the real estate market, owning real estate is a good long-term investment and with the rental potential in the Long Beach Island real estate market it is easy to see why. For more information about upgrading or downgrading your Long Beach Island home or about buying and selling in the LBI real estate market, please do not hesitate to contact me.
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
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