Second homes may seem the province of the super-rich, jet-setters with homes scattered across the globe in the most desirable places. It turns out, however, that over nine million homes in America are second homes. About three quarters of these are vacation homes for their owners, and though they're certainly not all elegant, they are very often prized possessions that provide their owners with a great deal of pleasure and, eventually, profit.

Often, it isn't easy to gain the needed financing with which to purchase a vacation home. The best source in many cases is the equity in your primary residence, which you can generally borrow in a lump-sum second loan at a favorable rate. (In some cases, you can accomplish this with a cash-out refinancing of your existing mortgage, as an alternative.)

Some benefits: The mortgage obligation for the second home can be added to the existing mortgage in most cases for purposes of interest deductibility. Property taxes should also be deductible. And if you rent the house out to others for less than two weeks in any given year, the rental income is tax-free. Above all, though, there is the chance to enjoy a vacation home and watch its value climb−and perhaps, at retirement, to move into the home either for the remainder of your life or for at least two years, so that you can enjoy the $500,000 gains exclusion from taxation (for married couples filing jointly, $250,000 for singles) if you sell. For tax questions please consult your tax advisor. For more information just call Beth at 425-450-5208 and visit her website at www.bethbillington.com.

Beth Billington is a Realtor® with Coldwell Banker Bain in Bellevue, WA.