You can afford a second home, let us show you how!
Now that low interest Canadian mortgage rates are readily available, it seems like the perfect time to invest in a second home. Here's what you need to know before investing in a second property.
Things to Know About Buying a Second Home
1) Do your research
You must resist the urge to buy a home because you want a getaway. Research the properties, area, and low mortgage rate options beforehand. This is an investment, not just a vacation.
2) Think long-term
Think about the type of home that would suit your family’s needs. You need to consider proximity and what you plan while you're there.
3) Visit the area
Check out the area when it’s off-season and take the time talk to the people who live there full-time. This will help you get a better feel for the neighbourhood.
4) Decide on the type of home
A home requires maintenance on a regular basis, whereas a condo requires that you pay someone else to take care of it.
5) Shop around for the best mortgage rate
Your objective should not be loyalty to your bank, but rather getting the best possible deal.
6) Calculate the extra expenses
From insurance and maintenance to taxes and repairs, you need to factor in the additional costs.
7) Consider sharing ownership
Talk to your siblings, friends, and coworkers. Sharing a vacation property could help make it a more feasible investment. Just be careful; mixing business with personal relationship can be difficult. Make sure that you aren’t casual about the deal and draw up formal contracts.
8) Take advantage of tax benefits
Did you know you don’t have to pay taxes on rental income if your home is only rented out for less than 15 days a year? Talk to your account to learn more about tax loopholes concerning your new property.