Planning to buy a vacation house? MAKE SURE you read through this guide first!
The very idea of owning an vacation home has a sense of accomplishment all on it's own. Because who wouldn't love to OWN a home in a place where they can commune with nature, feel the fresh salty sea breezes, or view the majestic hilly scenes, right?
So, owning your personal vacation home may be one of your big fantasies too… Or, perhaps, you've already decided to buy one for yourself? Have you?
Well, if you have… Stop! Before you sign that dotted line and have the home transferred to your name there are things to consider.
Buying a vacation house is NOT only about sensations and aesthetics, there is money involved. So just as you would do with any real estate deal there are some serious realities to look at before you pick your dream vacation house.
Below are the 4 main things to consider before buying a vacation house.
Read and reflect…
1) Ahem… Can You Afford It?
Well, believe it or not, just last year the real estate industry saw a giant leap of 44% growth in the sales of vacation homes across Canada. With that, one thing is clear, the demand for vacation properties is super high and the market is on the rise. But can you afford to buy a vacation house at all, with the demand at an all-time high already?
Before you make a decision become familiar with all the costs that are attached with owning your vacation house. Apart from the purchase price, there are various other costs to deal with, like…
- Strata fees
- Security costs
Also, additional props like jet skis, motorboats and other fun stuff necessary for a vacation will contribute to the costs. So, will you be able to afford them? Really think about it.
Talk to a real estate expert and get their expert advice to help you setup your budget if you want to avoid buyer's remorse later on.
2) Let's Talk Rentals…
If you're looking to buy a vacation house from the investment perspective check if there is potential for rental income at all?
This means getting familiar with what is renting in the area, and what are they renting for. Make sure they'll cover your costs to own…
For financing tell your lender that you aim at renting it out so their plan is in line with the laws for rental vacation houses and not ordinary real estate. Also, many communities have restrictions on renting altogether so make sure that's not the case with the property you are looking at obtaining or your investment will be a total waste.
3) The Location!
Location is one of the most important things to consider. Do you want to spend your vacations in a quiet, serene place or you'd like to spend time in the middle of a vibrant city?
It all depends on your personal choice. But make that choice consciously. Also, consider how far or close do you want your second home to be to your current residence.
Should it be just a quick drive from your primary home one that you can go to every weekend in the summer? OR are you looking for more of a beach house, where you can spend a week here or there once or twice a year?
Ask yourself these questions even before you start looking for your dream vacation house!
4) Who Will Watch In Your Absence?
Think about who is going to look after your property when you're away. Are you going to be away for most of the year since it's your vacation house, and not your permanent residence?
Leaving your home away from home unchecked for long periods will not only up the risk for theft or vandalism but any unnoticed leakages or frozen pipes can also seriously damage your property.
Plus, if you intend to rent out to vacationers the maintenance of creature comforts (food, TV, medicine, etc.) will be necessary as well. So, for this purpose you'll need to hire a property manager for your property's upkeep - and for your peace of mind!
Now Is the Time to Invest!
Once you've given enough thought to the four points above and decided on a clear and realistic plan for each of them, then… It’s time to invest, and there is no better time than now!
As mentioned before, people are looking for vacation homes right now more than ever before and the market is seeing a boom.
Sit down with a property expert, analyze your objectives, double-check your plan…
… and once you have, you're ready to INVEST!