One of life’s luxuries is being able to afford a vacation home. But don’t underestimate its true cost—especially if you plan to rent it out…
Doug Lebda, chief executive of Lending Tree, made a bigger down payment and pays higher interest rates because he plans to rent out the $960,000 beach condo he bought with his dad in Wilmington, N.C. To get the three-bedroom unit, Mr. Lebda put down 25% of the purchase price and received an interest rate of 3.86% for a seven-year fixed/20-year adjustable-rate mortgage. He estimates that their interest rate is one-quarter percentage point higher because it is a second property, and an additional one-eighth percentage point higher because of their plan to rent…
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