Buying Second Home Could Pay Off Big

To increase your chances of making your vacation home self-sustaining, consider working with a local real estate agent or property manager to attract renters. Of course, you'll have to pay them a portion of the rent, typically 15% to 25%. But the fee may be worth it to avoid the hassle of dealing with renter concerns.

If your efforts to find renters are successful, you may owe taxes on the resulting income. If you rent your home and stay in it at least two weeks a year, you can deduct mortgage interest and property taxes, saving you a bundle. However, a home that's rented out and never used for personal recreation will be subject to different standards, so consult an accountant before diving in.

Find the best bargain: Would-be buyers have a lot of leverage right now because so many houses are on the market. Don't be afraid to make an offer much lower than the listing price or to ask for additional perks, like a decorating budget or help with the closing costs. Anything goes in this market.

You'll get the best bargain if you come armed with a ton of information. Commercial sites like zillow.com and trulia.com can help you nail down current local and national housing figures, as can the databases at the local assessor's office.

Consider resale value: If you hope to profit from your second home, resale value is a crucial factor to consider. Gather information about pricing trends in your home's location, and factor in the time horizon you are targeting for your gain. There is no guarantee that your house will appreciate in the short term. But if the home is in a locale you'd love to vacation in and you can hold on to it until the housing market rebounds, a second home may be right for you.