Excerpted from How a Second Home Can Be Your Best Investment
by Tom Kelly and John Tuccillo

There's a magazine called Unique Homes that displays the most fabulous properties imaginable, the stuff dreams are made of. These estates range in price from the high six figures into the millions of dollars and are located in all parts of the United States and many foreign locations. It's a dream book and it serves a useful purpose. We all dream, and real estate seems to be the stuff of dreams for most Americans. Those dreams are useful because they often drive us forward to do things that are meant to reach those dreams. Most often we don't reach those dreams, but the effort is beneficial because it gets us to do things that are good for us.

Let's discuss how you formulate the long-term goal of your real estate investment activities and how you judge which options will best move you toward the dream. It's about starting with an Investment Property and trading up to a Cocooning Property or an Ultimate home. So this is all about planning. It’s about setting out at the beginning of the process and determining its end. And then it’s about starting small and growing.

Let's start with a basic premise: your reach exceeds your grasp. In other words, when you think about the house you want to live in late in your life, it's likely to be grander and better located than the house you now inhabit, or can even now afford. That's OK. It's the end of the process you care about. You intend to eventually live in that house and enjoy all the things you envision it affords. Let's look at how you can visualize the house you eventually want to live in, and how you plan to get there from where you are now.

Envisioning Your Dream Home
For example, consider John Lombardo, an accomplished professional . . . After years as a highly regarded trade association executive, he branched off to form his own consulting company. But when he did this, John also created in his own mind a vision of where he would like to be in 10 years. Always having been interested in his Italian ancestry, John decided that he would live most of the year in Tuscany and conduct his business from there, using the Internet and visiting clients during a three-month annual residence in the United States. In his many trips to Italy, he had explored the various towns that would be candidates for residence and had found the perfect location. This allowed him to flesh out his future life in Italy. He knew the sights and sounds of the town, how the breezes felt on his face, the smell of the flowers and herbs, and had even laid out his daily routine, including faithful dog. Back in the United States, he took language classes so that he could better speak Italian. This attention to detail kept his vision alive, and in the process stimulated his energy in, and desire for, his business. Sure enough, after 10 years, he had arranged his affairs in such a way that his trans-Atlantic lifestyle became a reality. The dream became the reality.

Read more about second home investment strategies in Tom Kelly's book How a Second Home Can Be Your Best Investment.

About the Author:Tom Kelly is a real estate columnist and radio show host with 33 years of experience as a professional journalist. Tom also authored five books focusing on second homes, mortgage options and retirement possibilities. He targets Baby Boomers and Retirees, providing consumer tips and helpful hints as well as explaining concepts and terms in a friendly, understandable style. His award-winning and nationally syndicated radio show "Real Estate Today" provides on-air advice to callers. Learn more about Tom.