Keep This In Mind When Selling Your Home.

The prime residential real estate selling season is in full swing — and 2017 might be a good time to sell, depending on your situation.

So, while prospective sellers are making their properties look like model homes in the hopes of raking in a nice profit, this is a good time to review how taxes will factor into the transaction. With the home sale gain exclusion tax break, the profit from selling your principal residence might be free from federal income taxes (and possibly state income taxes, too). The rules are straightforward for most sellers.

Average Mortgage Interest Rates
As of: 30 year 15 year
April 13, 2017 4.08 3.34
March 30,2017 4.14 3.39
January 26,
4.19 3.40
2016 annual average 3.65 2.93
2011 annual average 4.45 3.68
2006 annual average 6.41 6.07
Freddie Mac Weekly Mortgage Survey

Basic Qualifications

An unmarried homeowner can potentially sell a principal residence for a gain of up to $250,000 without owing any federal income tax. If you’re married and file jointly, you can potentially pay no tax on up to $500,000 of gain. To qualify, however, you generally must pass two tests.

Ownership Test. You must have owned the property for at least two years during the five‑year period ending on the sale date.

Use Test. You must have used the property as a principal residence for at least two years during the same five‑year period (periods of ownership and use need not overlap).

To be eligible for the maximum $500,000 joint-filer exclusion, at least one spouse must pass the ownership test, and both spouses must pass the use test.

If you excluded a gain from an earlier principal residence sale under these rules, you generally must wait at least two years before taking advantage of the gain exclusion break again. If you’re a joint filer, the $500,000 exclusion is only available when neither you nor your spouse claimed an exclusion for an earlier sale within two years of the sale date in question.

Tip: If you make a “premature” sale that fails to meet the preceding timing rules, don’t give up hope. You may qualify for a reduced exclusion that will be large enough to shelter your entire gain from federal income tax as described below.

Reduced Exclusion May Apply to “Premature” Sales

You generally cannot claim the federal home sale gain exclusion break if you fail either the ownership test or the use test explained in this article. Also, you generally cannot claim an exclusion for a sale that occurs less than two years after an earlier sale for which you claimed an exclusion.

The key word here is generally, because there’s a favorable exception that might help when you make a “premature” sale that fails to meet the basic timing rules. Specifically, you can claim a reduced exclusion if your premature sale is primarily due to:

1. A change in place of employment.

2. Health reasons.

3. Certain unforeseen circumstances outlined in IRS regulations.

For example, let’s say you and your spouse own and use a home as your principal residence for 18 months. You are forced to sell because your job is transferred to a distant state. Under these circumstances, you would qualify for a reduced gain exclusion of $375,000. This is 75% of the full $500,000 joint-filer exclusion, because you owned and lived in the home for 75% of the required two-year period.

Bottom Line: If you qualify for the reduced exclusion, it can be generous enough to completely shelter your profit from federal income tax.

In most cases, the federal home sale gain exclusion rules are generous and fairly simple. However, as with all tax breaks, things can get complicated if your situation is the least bit out of the ordinary. For example, if you engaged in a tax-free rollover under the old law rules, there are other rules that apply. Your tax adviser can tell you if your home sale transaction will be free from federal income tax and help you plan for the best tax results.

Spring is here and what this means for the you, the homeowner.

Spring Captured at Lakeview Park, Bloomingdale, IL

Spring Captured at Lakeview Park, Bloomingdale, IL

Spring…. the sudden change in weather helps to serve as a reminder of a change needing to take place in our lives. Many go about this change in the ways of Spring cleaning, wardrobe changes, decluttering, etc. Spring, reminds us that we have endured a long cold winter and that happier and more agreeable times are ahead for all of us.

With all the rituals that take place during this season. It also helps us to take account of the things we have, don’t have, want and need. One of these things is of course our homes. This Spring, is particularly special in the sense that we have an economy that is finally starting to roar back to life. For many, who were unemployed, the change manifests itself as new job opportunities, a career change and things of the sort. No place else, do these life events speak to us and to others as clearly as in our homes. Perhaps, I am looking too deeply into this. However, I have a love affair with all things real estate. While it is still a thing, it’s a different sort of thing. It’s a living, breathing thing. A home is alive. The soul of a home is, us.  Its inhabitants.

This perhaps is what makes my job a very sensitive one. At this point in time, many people will begin to consider selling their home. Why not? It’s a brilliant idea. The people who were once underwater, may no longer be. Others, have better jobs and want to celebrate the success by purchasing a better or larger home. Others, may be empty nesters, or now have a new addition to the family coming soon. There are a billion reasons to sell your home. Whatever the reason, there is a very intimate and emotional side of my initial meeting with a homeowner. I am a perfect stranger who has to come in and state the facts with regards to their home. It may be that it needs this or that, a touch up here or there. I’m being critical to something so sacred. After all, that bathroom remodel was done by a husband and wife team. Bonds were formed within these four walls. A new level of intimacy in a relationship can be formed anywhere in the home. Not only that, I have to place a value on this sacred parcel. How can a value be placed on something so valuable?

I have to remind my sellers that my job is not to place a value on their home. In fact, I don’t do that. There is not an real estate agent on the face of the planet that does. You see, the “market” is also a living, breathing thing. The market is what determines the price of a home. My job is to understand, what the market is saying. The market doesn’t speak English. It speaks in numbers. These numbers, can be in the form of previous homes sold, under contract, cancelled listings, expired listings and active listings. It also speaks in the form of price per square foot and many other forms of data. To grab, all of this information and decipher it’s code, is what I do. I present this information to a seller in a clear and concise fashion.2014-15

Arriving to the decision of selling your home, involves many preliminary steps. However, the most important is having a preliminary “number” of what your home could potentially sell for. Many sellers may sit on this idea for fear of reaching out to a Realtor and getting bombarded with phone calls and emails in an effort to list their homes. Perhaps, a seller is not quite ready to let go of all the memories created in this home and starting anew.

In en effort to help people who may just be looking at the possibility, I created a website to help with this preliminary but important step. is a site, that will give homeowner’s the opportunity to just be curious about their home’s value. In three easy steps, you’ll have a rough estimate of what your home is worth. Mind you, there is a registration page, but you won’t be bombarded with a million calls and emails. I will reach out to you as a courtesy, to see if your interest in your home’s value is something more serious.

Quickly and easily determine the value of your home.

Quickly and easily determine the value of your home.

What Is Your Home Worth?

That is the is the question. So go ahead, take it for spin. It’s there for you. Tell me what you think. While the site is geared toward DuPage County, the primary market I serve, it works for any address.

If you have any questions, feel free to reach out to me: 630-765-1702- Mobile or email me at:

Thank you for reading my post, I hope you enjoy it as much as I enjoy writing it.

Love where you live…. Discover your city.

Rediscover Your City With These Amazing Apps

Rediscover Your City With These Amazing Apps

If you want to get to know a new place you can certainly try searching Google and Yelp. But, if you’d rather uncover those hidden gems even longtime locals don’t know about, be sure to check out these four apps. Best of all—they’re free!

Kamino is an “urban hiking” app that features user-generated walking tours to help people get to know their locale. After registering, select a route. The app will then guide you to the starting point of the “hike” and provide the distance and estimated time required. After that you can create your own hikes to share with others. Apple devices only.

Mosey allows users to select locations around a search term or theme such as “I want coffee” or “I want to shop.” The app then generates a list and map to follow at your leisure. You can follow along with others or create and share your own “Moseys” within the app.Apple devices or web.

Jauntful formats its city guides especially for printing. This comes in handy if you can’t or don’t wish to be connected to your phone 24/7. You can also create your own guides and hand a beautifully designed map to friends and visitors. In addition to user-generated guides, Jauntful features guides from partners like “Saveur” Magazine and the Andaz hotel chain. Web only.

Field Trip by Google pulls in geo-tagged content from other sites like Atlas Obscura, Architizer, Thrillist, Cool Hunting, and Eater, across a range of categories like architecture, historic places, or “cool & unique,” then notifies you when you’re close to a site of interest. Like everything else by Google, there’s a ton of good information, but the app won’t let you customize your own explorations for sharing with others—yet. For Apple, Android, Google Glass.

Source: Gizmodo

Halloween Chicago Real Estate


This time of the year I can’t help but recall a home I showed to a client of mine years ago. While working in Lyons, IL, I showed and interesting three bedroom with a beautiful front porch. The frame home had blue vinyl siding with white trim.

Unfortunately, the current state of the real estate and job markets had began to take its toll on the home and the homeowners as well. This home was listed as a short sale and it had been on the market for some time. From the exterior view, both my client and I felt the home had very good potential. Upon entering the home, the neglect was visible but nothing to really discouraging us from further exploring this home.

The interior was dark, the floors squeeked and there was dirty clothes scattered throughout the floors in the living room. The kitchen sat in the back of the house, the dark colored curtains further prevented the house from receiving any natural light. The home smelled of freshly cooked food. Cereal boxes and dirty dishes were scattered on the kitchen counters. Yet, the home was vacant upon our arrival. None of the lights worked. I couldn’t help but feel as though I was showing the home of the Munsters with the visible cobwebs in the corner of some of the rooms. The bedrooms were not in any better shape. A chilly Saturday afternoon, and the beds were not made. The smell of dirty clothes overpowered our senses.  It was time to move to the basement.

We walked down the squeeky stairs that curved around the corner of the basement. Surprisingly, the basement was a bit brighter than the rest of the home. Nothing was visible in the basement. Not the typical findings we tend to see as visit any other basement. There was not any unused personal belongings, or old furniture, or even the outgrown children’s toys that are so common place in your typical American home. No… nothing. The only thing we saw was one bedroom, curiously tucked in the corner of this basement. The bedroom had a triangular shape to it. Odd and lacking usefulness in my opinion. A closed wooden door separated us from what was inside. My client and I were both intrigued by the possible purpose of this room. What could it be? Perhaps the mother in law’s sleeping quarter’s?

We knocked on the door and there was no answer. Though the basement was brighter, it was still dark enough to see a light coming from under the door. The light appeared to move, as though there might be someone inside. We knocked again and received the same response. We proceeded to cautiously open the door. What we found inside sent us scurrying out of the house in a flash.

We had just seen a very strange and weird shrine unlike one I’ve never seen before. I’ve shown many homes where the homeowner has set up a a shrine to a religious figure, or a few religious figures if that. This was different. The so called religious figures were of skeletons, a man with the head of a goat, and other non-human like figures. The shrined triangles in the corner of the room. The figures surrounded by what seemed like hundreds of small to medium sized candles. Shot glasses contained a liquid in the form of offerings.


Whatever it was, it gave us both a chill down our spine. We hurried upstairs and the same way we came in. We passed the kitchen and I instinctively collected my card I had previously left on the counter to show I had shown the home. We headed out the front door which I left open. It seemed that we were both afraid that the door would close shut before we arrived to it, a scene reminiscent of a horror movie. With this in mind we stepped it up.

We made it…. Nothing happened. The door was locked behind us and we were finally exposed to Autumn’s cloudy skies and chilly air.

“Is it safe to assume you’ll take a pass on this one?” I asked my client. Without saying a word, he just nodded.

Header Image
Making Your Home More Appealing to First-Time Buyers 
With first-time buyers accounting for more than one-third of today’s home sales, it’s smart for sellers to think about appealing to this demographic. Even if you don’t think of your home as a “starter” home, I can help make sure it is first-time buyer ready.

Presentation, Presentation, Presentation

While a home’s location always plays a big factor in its appeal, a great presentation has become more important than ever in the digital age, especially for first-time buyers. That first impression is key to engaging a buyer. A winning presentation covers everything from making sure the front door experience is on point to creating a flawless online presence.

A Picture is Worth a Thousand Words

First-time buyers almost always start their home search online, so listing photos need to be ultra-professional and Instagram-worthy. As a Baird & Warner agent, I only work with professional photographers to ensure your home looks its absolute best online — whether it’s being viewed on a phone or computer. Your listing also will have a dedicated website for easy access to photos and information.

Make it Easier to Access Financing

Buying your first home can be exciting and daunting at the same time, so make it easier for your prospective buyers and connect them with viable financing options. I can make sure they have the most up-to-date information on rates and mortgage programs through our very own Key Mortgage Services. Unlike banks, they have access to a huge variety of financing options, some of which can help cover a down payment, something that’s extremely appealing for first-time buyers.

Here’s What $24K Can Do for a Chicagoland Charity 
Our Good Will Network awards 5 grants to housing-related nonprofits.
Chicago Magazine Ranks the Top Public Schools 
Chicago magazine crunched the latest performance data for more than 2,000 elementary, middle, and high schools.
Where to Pick Apples Near Chicago 
Apple picking near Chicago is plentiful at these easy-to-reach farms.
Sergio Eguiarte
Sergio Eguiarte

Contact me Arrow
Visit my website Arrow
Get my app Arrow

Facebook Fan Page Icon Google+ Icon LinkedIn Icon Twitter Icon
The Vault
Chicago’s First Investors Weren’t From Chicago
October 8 marks the 147th anniversary of the Great Chicago Fire — which ravaged the entire city with only a few exceptions, including Baird & Warner’s company vault.

Baird & Warner was in its 16th year of business when the fire happened, and its vault held the firm’s first ledger, showing transactions between 1855 and 1861, including its first deal. It was a mortgage loan for $5,000 on “Lot 6 and Block 42” in what was then called “Original Town” and what we now call the Loop.

The ledger — which survives to this day — is a great record of the city’s early investors, many of whom came from the East Coast. Here are a few more things you might be interested to know about the oldest existing real estate ledger in the city:

 • The president and fellows of Yale University were among Baird & Warner’s first investors
 • Women made approximately one-third of the investments in our first ledger
 • Famous purchasers of mortgages included Chicago mayor John B. Rice; aldermen like Michael Diversey (name sound familiar?); early settlers like John A. Pearsons, the first resident of university lands of Evanston who ran the Evanston Express transporting goods and mail between Evanston and Chicago; and prominent abolitionist Henry O. Wagoner.

To say a lot has changed since 1855 is an understatement — but we’re just as proud to help people call Chicagoland home and invest in our great city and suburbs.


Visit for more articles like this.



How to Inspect Windows and Doors to Stop Air and Water Leaks

Why Aren’t More New Homes Selling When Demand Is Soaring? by Clare Trapasso — The Law Office of Beth Mann, P.C. – 708-429-9999-BethMannRealEstateLaw

Despite the hordes of frenzied home buyers hoping to take advantage of very low mortgage interest rates and sign on the dotted lines for their dream homes, builders still aren’t putting up nearly enough residences to appease the rising demand. There was no monthly change in the number of newly constructed homes that went under contract—54,000, […]

via Why Aren’t More New Homes Selling When Demand Is Soaring? by Clare Trapasso — The Law Office of Beth Mann, P.C. – 708-429-9999-BethMannRealEstateLaw

Holiday gifts that teach kids about money.


“Parents do great teaching kids good manners and how to be safe, make their beds and be culturally savvy,” says Mary Hunt, author of Raising Financially Confident Kids. “But so very often parents neglect the most important thing of all — to prepare them to be financially astute.” It’s possible that “neglect” is too strong a word. More likely, children grow up knowing how to spend money, and it’s easy for parents to miss the fact that this is the extent of their financial knowledge.

Teaching about money can be a real “blind spot,” says Hunt. Parents may think these lessons are taught in school, but that’s generally not the case. You can download free educational materials from sources like But you can also start teaching the basics another way: While you are pondering what to buy for the kids on your holiday gift list, you might consider including some items that are designed for fun and just happen to also teach money lessons.

Here are some gift ideas:

Board games that teach without trying. Think of the board games you may have played as a child. One example is Monopoly, or for younger kids, Monopoly Junior. Monopoly teaches kids to count money, to accumulate it for a delayed purchase, to pay bills, and even to give to charity. It also teaches the consequences of money choices. Other good possibilities for money-themed games include:

    • Payday, which focuses on earning money, paying current bills, and saving money for future expenses, and


  • The Game of Life, which incorporates lessons such as the financial impact of starting a job versus attending college.

Piggy banks that do more than hold money. Younger kids understand money better if they physically handle the bills and coins. A bank to collect it all is ideal, but kids also need to learn how to divvy up their money into categories, for example, saving, spending, donating and possibly investing (for longer-term goals, such as college). See-through, segmented banks can let kids separate their money and see it grow.

For an older child or teen, a set of brightly colored binders, with zippered pouches (similar to those used for pencil holders) can be an effective way to separate their funds into intended uses. This also encourages them to stick to the limits they set themselves when they divide their money into categories.

Books that use money to tell the story. Books often incorporate money lessons into stories for kids of all age groups, teaching readers on the sly what can happen if money is used well or misused. Here are some examples.

    • For beginning readers: The Berenstain Bears’ Trouble with Money and Dollar$ and $en$e, Curious George Saves His Pennies, and One Cent, Two Cents, Old Cent, New Cent: All About Money, featuring Dr. Seuss’s Cat in the Hat.


    • For elementary school children: A Chair for My Mother (by Vera B. Williams) and Double Fudge (Judy Blume).


  • And some books take a more direct approach, such as, O.M.G.: Official Money Guide for Teenagers (Susan & Michael Beacham).

Other Possibilities

If traditional isn’t your style, here are some ideas for the older kids on your gift list:

Matching funds. Rather than doling out cash, a check or a gift card, offer a savings match. Whenever your recipient adds money to a bank savings account — or makes a donation to a good cause — offer to match that money at 50 cents on the dollar, or as much as you can afford. Your match encourages good money habits by rewarding the child for saving or donating. If the child doesn’t have a savings account, this might be a good time to take him or her to a bank to open one.

A DVD of “Confessions of a Shopaholic.” This movie tells the story of a young fashionista who goes to work writing for a personal finance magazine but knows nothing about managing money. By the end of the movie, the character learns all about the danger of spending more than she earns.

Money apps. Search for money-related apps at, a nonprofit site that rates apps and other media for educators and families.

Don’t Stop There

To be really effective, your gift shouldn’t be the end of the story. Make yourself available to answer questions as a sort of financial mentor. If possible, play the game with them, read the book to younger kids, or watch the movie together.

In one way or another, parents do teach kids about money. But the lessons they learn may not lead them to handle money responsibly. In fact, sometimes it’s just the opposite. Will playing Monopoly turn kids into financial wizards? Probably not. But it can be a fun way for them to learn the basics of money handling, especially if parents or grandparents join in.

The Life Cycle of Money


The average $20 bill is in circulation for about 7.7 years, according to a report by the Federal Reserve. That’s better than the $10 bill, which has a life span of only 4.2 years, but worse than the $100 bill, which is in circulation for 15.0 years.1

Here’s a quick look at what goes into creating a $20 bill and what determines when a bill’s lifespan ends.


A $20 bill starts out life as part of a big, blank sheet of paper — but not just any paper. While most paper is made primarily from wood pulp, the paper used by the U.S. Bureau of Engraving and Printing doesn’t contain any wood at all. Currency paper is composed of a special blend of 75 percent cotton and 25 percent linen. It’s made with special watermarks and has tiny blue and red fibers embedded in it along with a special security thread.2,3

Each blank sheet is tracked from the time it leaves the mill until it is printed, and the entire shipment is continuously reconciled to make certain all are accounted for.4


These blank sheets of cotton and linen paper get printed four times.

Daily Production

In 2013, the government printed roughly 26 million notes a day, with a face value of about $1.3 billion — 90 percent of them to replace notes already in our circulation.

– Source: Bureau of Engraving and Printing, 2014

Background images and colors are printed — both sides at once — using offset presses that are over 50 feet long and weigh over 70 tons. After drying for 72 hours, the portraits, vignettes, scrollwork, numerals, and letters are printed on the back using Intaglio presses that are 40 feet long and weigh only 50 tons.

After drying for another 72 hours — in special guarded cages — more portraits, vignettes, scrollwork, numerals, and letters are printed on the frontusing the Intaglio presses. Finally, the serial numbers, Federal Reserve seal, Treasury Department seal, and Federal Reserve identification numbers are printed using a letter press.5

Cutting and Wrapping

Once dry, these printed sheets are gathered in stacks of 100 to be cut by a specially designed guillotine cutter. Each new stack of 100 $20 bills is wrapped with a special paper band. Ten of these 100-note stacks are gathered, machine counted, and shrink-wrapped into a bundle. Then four of these shrink-wrapped bundles are collated together, given a special bar-code label, and shrink-wrapped again to create a brick of 4,000 bills, worth $80,000.6

Fast Fact: Lots of Folding

It takes about 4,000 double folds — first forward and then backward — before a $20 bill will start to tear.

– Source: Bureau of Engraving and Printing

Distribution and Circulation

The Treasury Department ships these newly printed $20 bills to the Federal Reserve Banks, which in turn pay them out to banks and savings and loans — primarily in exchange for old, worn-out bills. The new bills are handed out to customers of these institutions as they withdraw cash, either through tellers or through automated teller machines.7

An average $20 bill will change hands often, but even the U.S. Bureau of Engraving and Printing isn’t sure how many times a bill will move from one pocket to the next. Contrary to popular belief, the government doesn’t have any way to track individual bills.

There is a polyester security thread embedded in the paper that runs vertically up one side of each bill. If you look closely, the initials USA along with the bill’s denomination and a small flag are visible along the thread from both sides of the bill. This thread makes currency more difficult to counterfeit, but cannot be tracked electronically.8


Banks gather worn out and damaged currency, sending it to the Federal Reserve in exchange for new bills. The Federal Reserve then sorts through these bills to determine which are still usable and which are not. The bills deemed usable are stored until they can go out again through the commercial banking system. Those deemed no longer usable are cut into confetti-like shreds. Most are then disposed of; a small portion is sold in five-pound bags through the Treasury’s website.9,10

1. Federal Reserve, 2014
2. Bureau of Engraving and Printing, 2014
3. Federal Reserve, 2014
4-6. Bureau of Engraving and Printing, 2014
7. Federal Reserve, 2014
8. U.S. Secret Service, 2014
9. Federal Reserve Bank of New York, 2014
10. Federal Reserve, 2014

Speaking of Money…. Do you know what your home is worth? Click here! To get a free report emailed to you about the value of your home. If you need a more accurate number, feel free to email me at or call me at 630-765-1702. I’ll be happy to provide you with a accurate, real time report of your home’s value.


Spring Heats Up Housing

Spring Heats Up Housing

According to a late February analysis in the Wall Street Journal, homebuilders are reporting that sales of newly built homes so far this year are going gangbusters.

But sales of existing homes are more lukewarm. Why the difference?

A simple reason could be that new-home figures are tracked on a more current basis, reporting numbers from orders in more recent weeks, versus existing home sales which often have a full month of lag time since they are tracked by the S&P/Case-Shiller Home Price Index.

Analysts also claim that there is simply less available inventory of existing homes, which has helped the new construction market.

Meanwhile, pending sales, an indicator of future closed sales, rose 1.7 percent from December to January, and are now 8.4 percent higher than the same time one year ago. January marked the fifth straight month of year-over-year gains, and the gains are increasing.

“Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” said the National Association of REALTORS® chief economist Lawrence Yun. “The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth.”

A March CoreLogic report also showed that January home prices rose nearly 6 percent from a year ago. In 2013, investors were blamed for pushing prices upward, but it has been suggested that prices are rising again due simply to a lack of inventory in markets large and small across the nation. This news could result in a very competitive housing season for homebuyers.

Freddie Mac is also expecting 2015 to be the best year for home sales and new construction since 2007, according to its March 2015 U.S. Economic and Housing Market Outlook. Freddie Mac cited an improving job market, rising rents and expanded credit availability as some reasons for its positive outlook.

The Bottom Line
Low rates and new home inventory make for an exciting housing season. If you have any questions regarding housing or know of friends, family or colleagues who wish to discuss buying or refinancing a home, please contact me today.

Thinking of Renting Out Your Vacation Home or Condo?

If you’re in the market for a vacation home or if you already own one, you might be considering renting it out to help cover the mortgage and other associated costs. Depending on how you handle the rental and how long you rent it for, there’s a good chance you could make a profit. While it can be a smart move, there are many points to consider before you dive in. Check out these tips to help you make the decision.

Selecting the Right Locale

If you’re in the market for a vacation home or condo, there are a number of things to consider as you choose a location. You’ll need to do some serious legwork and get to know an area before you select a home, so you can maximize your investment. Before you plunk down your hard-earned cash, take a look at these tips to help you make an informed decision.

Know the Area

Towns change, and so does the real estate market and the interest of vacationers. Don’t make the mistake of falling in love with a vacation home until you’ve done plenty of checking. There are many beach towns and mountain resorts that were once hot, but they’re not pulling in the crowds today.

If you are counting on rental income to make the property affordable, be sure to research how well vacation rentals do in the area you are targeting. Get to know the town. Plan your next vacation and stay nearby. If it’s a place you enjoy, it’s likely others will too.

Get the Facts

Take a look at recent sales in the area. Naturally you want to buy a place that will appreciate in value. Consider flood plains and the impact of living close to the ocean and what that might mean as far as the potential for another natural disaster, as well as property insurance and flood insurance costs.

Know Your Temperament

There’s a big difference between owning a vacation home and renting one out. Being a landlord is a serious commitment, so figure out if you’re ready to make it. Expect that you’ll have repair emergencies and a few subpar tenants along the way. You can limit the headache by picking the locale of the vacation property well and finding a real estate broker who can help you vet the tenants and handle the day-to-day issues. It’s likely you won’t live anywhere near your vacation property, so a reputable and reliable real estate agent who is used to handling rental properties can be an invaluable resource.

Getting a Mortgage

The process of getting a mortgage on a second home is similar to getting a mortgage on a primary residence. Your credit and employment history, as well as your current income and outstanding debts, will factor into getting a loan approved. But lenders will take a harder look at your application for a second home, which should come as no big surprise.

If you do have a mortgage on your primary residence, it probably makes sense to start with your current lender and find out the rates and terms available. Discuss all of your options with your lender and find out what makes sense for you and your financial situation. The purchase shouldn’t blow the budget. Your lender will help you make an informed decision. Make sure a vacation home is something you can truly afford out of pocket, since there is no way to know if potential renters will find your place as charming as you do.

Consider Property Taxes

Check out the property taxes in the area, since this can be one of the biggest costs you’ll have on the vacation home after the monthly mortgage payment, of course. In some areas of the country the property tax is a burden far greater than the monthly mortgage payment.

Find out how the local property taxes have increased in the town in recent years and project what the increase in coming years might be. Remember, it’s not just what you’ll owe now, but what you’ll owe in the future. Before you get your heart set on one specific location, check out a number of locales and compare the costs of living in one area against another.

Remember the Upkeep

It doesn’t matter if it’s your primary residence or a vacation property, every home requires maintenance and upkeep. Don’t forget the costs associated with repairs to roofing, plumbing, heating and air conditioning. Even minor maintenance costs can add up, from painting to landscaping and more.

Remember, a vacation home has to be in good working order, but it also needs to be attractive. So, if you think a well-manicured lawn or a fresh coat of paint doesn’t matter, think again. Just because your home is near the shore doesn’t mean a prospective renter won’t opt for a more attractive cabin across the street. Most of your tenants will probably find out about your place online by checking out photos of the home on a realtor’s website. You’ll want to make sure your property stands out.

Understand the Tax Implications

The tax implications of owning a vacation rental property can be complicated. One of the biggest factors in the process is how often you yourself occupy the residence. If you rent it for 14 or fewer days, then you can keep the rent and not worry about the tax man. The IRS treats it as a second home and not a rental property. The rules that apply to deducting mortgage interest and property taxes will be similar to what applies to your primary residence. However, if you rent it out more than those 14 days, then you’ll need to deal with the related tax issues. To get a full understanding of the tax rules involving a vacation rental home, speak with your tax adviser accountant and check out publications on the IRS website.