2 minute read.
Whether it’s for personal pleasure or extra income, buying a second property is an investment in your future. This is not a small purse or a set of golf clubs, it’s a big decision that needs to be thoroughly and thoughtfully evaluated. Think about these five tips before you start this exciting new venture.
Resist the Urge to Splurge
The biggest mistake you can make is returning home from vacation with a set of keys to a new place that you bought while you were away. Love, at first sight, can be dangerous when purchasing a property especially if you haven’t done the necessary research. You should get to know the area in the offseason in order to get a true feel for this new environment. Not to mention, look at your savings and consider if you can even afford a second property. At the end of the day, you don’t want to buy something that you cannot afford to own.
Look at Your Long Term Needs
If this is a property you would like to be able to use for the rest of your life, there are some key questions you need to consider. Is this a weekend getaway spot or a retirement retreat? What are the travel times like to get there? Is it only accessible by car, plane or boat? How much time will you be able to spend there? It is important to ask yourself these questions now because in 20 years if your second property isn’t adaptable to your needs, it might not be the right spot for you.
The Type of Home
With this being an additional property, you will want something that is less maintenance then your primary residence. Consider a bungalow or a condo when choosing your second property. The clean-up will be quicker and less space will mean less clutter. If you are thinking of getting a larger property, consider buying with a friend or family member to keep costs down. This will also mean you can share costs on maintenance and other additional fees.
If you are interested in a condo, remember that there are maintenance fees that come with that property. For cottages and other freehold properties, depending on the location, you might be looking at costs for snow removal, lawn upkeep and other exterior care. I would suggest adding 5% more to your expected budget to include insurance and other expenses the property will require.
Renting for Extra Income
Buying a second property that you can use and rent out is a great option to earn some extra income. Cottages and cabins in Canada are popular in Summer and even Winter, so it’s a great idea to utilize your space to its fullest ability. Remember that when you start renting your place you will become a landlord and responsible for any problems your renters might experience. Being a landlord comes with a lot of responsibility and can become very time-consuming. Before buying a rental property, familiarize yourself with rental laws and any additional fees you might need to put into the property like a property manager, cleaner or gardener.
If you are considering buying a second property I would be happy to sit down with you and take you through these steps more in-depth.
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