Thinking about buying that cabin in the woods your family enjoyed over the weekend?There are two ways for determining how much cash you can afford to put toward a second residence solely for your personal use or part-time rental.The first is the asset method. Start by taking stock of your present wealth. Create a balance sheet of your assets and liabilities.
Don’t forget to include the equity in your primary residence, even though you may be dead-set against borrowing against the roof over your head. Homes are no longer cumbersome and difficult-to-liquefy assets, thanks to the integration of home equity lending with other financial opportunities.