“The Invention of the teenager was a mistake. Once you identify a period of life in which people get to stay out late but don’t have to pay taxes = naturally, no one wants to live any other way.” – Judith Martin

I don’t stay out late anymore and I’m a long way away from being called a teenager, but I still don’t want to pay taxes! So how do regular, hard working people cut their tax liability and maximize their wealth?

 You buy a home!

The mortgage interest tax deduction is one of the single largest tax reduction strategies available to the American family today. Oh, you already own a home….? Guess what the second biggest tax reduction financial strategy is for today’s American family?

Buying a vacation home!

Ok, so while this is an incredible tax reduction / income increasing financial strategy – there are soooo many more benefits to buying a 2nd home. We will get into those in a second. I want to quickly monetize the savings that a second home can create for you. But first – the all important legal and professional disclaimer that says, “you really should consult with a Certified Tax Specialist for your particular scenario and any specific tax advice.”

Show me the $$$$!!!

Ok so lets say you find a nice little place for the median sales price in Sunriver, OR (arguably one of the best places in Oregon for a vacation home!) – Purchases price: $285,000. You put 10% down and borrow $256,500. With a federal tax rate of 25% and the ever so lovely Oregon state tax rate of 9%, your *first year tax savings on a 4% mortgage is $4046! That is $337/month!! And, this is before the property tax deduction. (*because amortized loans consist of more interest than principle in the beginning years of the mortgage, each year’s tax savings will decline incrementally).

The requirement in order to deduct mortgage interest expense on a vacation home is that you rent it out no more than 2 wks/year. What if you want to rent it out more? Great news, this is another benefit to buying a vacation home – rental income! Sunriver is a desirable vacation destination with tremendous rental income opportunities. Why not have other people help you pay for the mortgage! And, there are still possible tax benefits depending on operating costs, time rented, participation, etc. – insert tax professional disclaimer here again.

So beyond the all-important tax reduction benefits that vacation homes provide, let’s get to the good stuff – or rather the fun stuff. Vacation homes aren’t reserved for the wealthy any more – they are a fantastic retirement plan that you can enjoy BEFORE you are retired. And, they are obtainable… reachable…. within our grasp as middle class America. With rates still at record lows, property prices at incredible values and 10% down payment programs available, now is a great time to invest in your retirement, but be able to enjoy long before you retire.


Picture this, sunny Sunriver, OR – scenic setting, mild climate, year round recreational activities like skiing and golf and hiking and mountain biking; not only is Sunriver a wonderful place to vacation, it is a great place to retire and still be close to family. So while you begin your eventual retirement plan with this real estate investment, you can begin building memories to last a lifetime NOW as you vacation with your family.

Then after you have created years of memories with and for your entire family you have options heading into retirement… You can relocate to your vacation home and sell your primary residence. You can sell your vacation home that has appreciated nicely over the years. You can rent it out to provide monthly cashflow. That which you invest in today will create memories and options for you down the road.

It’s kind of hard to ‘enjoy’ your 401k before retirement….but a vacation home will provide years of enjoyment, a lifetime of memories, significant tax savings throughout and retirement options later on.

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