Are you among the fortunate few who are considering the purchase of a second home? Whether it’s an investment property, vacation spot, or your retirement plan, there are a few key things you need to consider before you start looking at listings.
It’s exciting to buy a property, regardless of whether it’s your first time, your next step up the ladder, or an opportunity to expand your real estate portfolio. That said, it’s always important to approach the market with a tactical plan and strategic approach.
Check out our essential need-to-knows to prepare for the journey towards buying your second home.
Think Strategically
Relying on serendipity isn’t always the best approach to purchasing a second property. Just because a fantastic listing in an area you love becomes available doesn’t mean you should throw caution to the wind and put in a bid.
Consider whether you’ll be treating your second home as a vacation spot, a place to retire, or an investment property. Then, develop a list of applicable criteria that suits your plans.
Ask yourself questions like:
- How many vacations will I realistically be able to take in the immediate future?
- Will the prospective neighbourhood be retirement-friendly down the line?
- How will the real estate market in the area where I hope to buy perform over time?
Worth the Trip?
It’s wonderful to fantasize about keeping a pied-à-terre somewhere hidden away in wine country. However, depending on what the next stage of your life will look like, you may find recurring trips burdensome.
While owning a luxe weekend getaway in a trendy new community might be brag-worthy, some destinations are better saved for one-off trips, especially if you have a busy schedule.
Consider Maintenance
Although real estate is one of the safest, most lucrative investments you can make, a remote income property isn’t quite a hands-off money-maker. Whether or not you find local tenants to lease your property while you’re away, owning a second home requires a lot of upkeep.
Regardless of which season you’re away for, you need to ensure your property receives some essential home maintenance.
While recruiting tenants to enact mundane maintenance duties is a useful solution, ensuring that larger-scale issues with the home are resolved quickly and adequately can also be a challenge while living at a distance.
Know the Terrain
Common maintenance issues can arise in almost any home. Unfortunately, considering weather preparations and environmental precautions unique to your second home’s location may be brand new to you.
Even if you’ve personally spent quite a bit of time in the region, not having connections to local professionals for help when necessary (or to simply check in on your property) could lead to deterioration.
If you plan on investing somewhere in cottage country, knowing how to protect your home from extreme weather over the winter months is advisable.
Understanding Tax Obligations
When you’re considering investing in a second home, it’s also advisable to get the advice of a tax-planning specialist.
Capital gains taxes, tax deductions for rental properties, and the potential for your new home to push you into a higher tax bracket are all important considerations. Now we’ve covered all the bases – are you ready to start searching for your second home?
Have a look at the current listings we’re excited about on our featured listings page here – or get in touch to get started.
