There are several reasons to invest in a secondary residence, whether it’s a cottage, a country home or a condominium in the city: fresh air and rejuvenation during vacations and weekend getaways; setting up a peaceful telework office away from the distractions of home; investment to make a sum of money work for you; source of income if you rent it out; retirement home…
Whatever your objective, if you’re thinking about buying a second property, it’s important to prepare yourself so that you don’t end up with a burden on your shoulders. Here are a few things to consider that will help you make your dream come true!
Define your objectives and needs
First, why do you want to buy a secondary residence? Is it for personal use, short-term rental via a platform such as Airbnb, or a long-term investment?
When you define your objectives, you’ll find it easier to determine what characteristics you want, such as:
- The type of property (cottage, condo, single-family house);
- Its location (country, waterfront, forest, mountains, downtown);
- Accessibility (distance from the main residence, transportation to get there).
Assess your financial capacity
Once you’ve decided which type of residence meets your needs, calculate the total that you’ll have to spend to buy it, including the purchase price, municipal taxes, legal fees, insurance, furniture, decoration and any repairs.
With this amount you can do a mortgage simulation on a financial institution website and establish your borrowing capacity based on current mortgage interest rates. This is a crucial step to respect your budget and avoid going into debt. If you expect to rent out your secondary residence, you can include rental income in your calculations.
Explore the real estate market
Now’s the fun part: shopping for properties! Before you start, define the regions you are interested in. Compare prices among geographical zones and find out about market trends. Fall is often the time to find good bargains, while there are usually more properties available in spring. If you need to, call on a real estate broker in your target region for a clearer idea.
Consider practicalities and legalities
Before you finalize your purchase, look into municipal and zoning regulations, especially if you are thinking about renting your cottage or condo or using it for commercial activities. Also think about home insurance for a secondary residence and adding this asset to your will.
Plan for long-term management
If you think that you’re going to need help to maintain your secondary residence, you may entrust various tasks to a third party, such as snow clearing, lawn care, managing rentals, housekeeping, etc.
And for organizing the bills related to your cottage or condo, consider Edwix! With our Duo plan, you can have up to two properties in your account.
If you prepare properly, you’ll have a better chance of a successful project. Don’t hesitate to consult professionals (broker, tax expert, notary or lawyer) to optimize your investment.
