Investment property vs second home

[Kyle Crane]

Looking to purchase our first property, but unsure how to classify it. I am intrigued by the idea of only having to put 10% down for a "second home"  and having more cash in hand for some upgrades etc, but are the tax benefits more advantageous on an "investment property". I did my research and I understand there are stipulations and different tax implications to both, but can someone put those tax differences into perspective for me? Did you classify one of your properties one way but wish you'd classified it the other? Trying to figure out which route to go. Thanks!

[Lyndsay Zwirlein]

Quote from @Kyle Crane:

Looking to purchase our first property, but unsure how to classify it. I am intrigued by the idea of only having to put 10% down for a "second home"  and having more cash in hand for some upgrades etc, but are the tax benefits more advantageous on an "investment property". I did my research and I understand there are stipulations and different tax implications to both, but can someone put those tax differences into perspective for me? Did you classify one of your properties one way but wish you'd classified it the other? Trying to figure out which route to go. Thanks!

Hey Kyle! I know you're asking about a tax perspective but from a lender perspective, the primary intention for usage should factor into the loan type.  Lenders have been cracking down on occupancy recently and you have to sign an FBI Occupancy Cert at closing.

10% down vacation home loans work if you intend to use the property as a vacation home at least a couple weeks out of the year. If you are purchasing strictly for an investment, it would be best to pursue an investment home loan. This is a conventional, max 85% LTV (non-jumbo). Hope this helps!