Posted: Oct 6, 08 3:42pm

Second home investment should be viewed as a way to make money over the long-term. Real estate is very cyclical with housing “bubbles” expanding, sometimes rapidly, and then just as suddenly bursting. If you leverage the purchase expecting a fast profit you can really blow yourself up.

You need to understand the investment you’re making with a Second Home and have a clear plan of how that new property will be paid for and, possibly generate income for you.

Second Homes can earn steady, if potentially modest, profits - allowing you to hold a tangible asset that will most likely rebound.

Keep these points in mind:

1. Taking a long-term approach to real estate investing will protect you from the volatility of both the real estate market and other, riskier investment vehicles.

2. Enjoyment of your Second Home should take precedence over any profit potential.

3. Do your homework. It’s possible to find a second home that will provide income and likely appreciate in value for that day when you decide to sell it or retire and move to it.