Barbara Corcoran Reveals the Secret to Making Money on a Second Home
In a challenging real estate market, you might shy away from the opportunity to purchase a second home. However, if you can afford to do so, Barbara Corcoran thinks you should go for it.
“People shouldn’t be afraid of buying a second home,” she said while appearing on Forbes’ “Women & Wealth” series. “I’m not talking about a home for enjoyment, like a weekend home — which is fine. But people should get into buying a home to rent out as fast as they can.”
Here’s why Corcoran sees a second home as a great investment.
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‘You’ll Always Make Money’
When it comes to buying a second home, the reward far outweighs any risk — especially if you choose your property wisely.
“If you stick with your neighborhood [since you] know it best and buy on the right side of the street, the right size home and it’s popular with people, you’ll always rent it out and you’ll always make money,” Corcoran said. “For many people I know, the second home becomes a retirement account. They live off that home for many, many years and [are] so thankful they bought it when they did. It’s smart to get into the business as fast as you can.”
Your Renter Pays Your Mortgage
Many people are scared to take on a second mortgage.
“For most people, buying a second home feels like a very scary proposition. They don’t like two mortgages,” Corcoran said. “We have to remember you have a tenant who’s going to pay off your mortgage — you get a free ride. How delicious is that? That you live in one house and you have somebody paying your other mortgage so that you have a huge equity to retire on. It’s a great idea.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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