Remember summer? No, neither do I.
When it comes around again, eventually, we’ll all bolt for the back yard, or perhaps our cottage in the country or by the ocean – if we have one.
Planning for summer may include the purchase of a recreational property, which can be a great investment but also an important getaway for you and your family. STAYcations are all the rage these days. So if you’re going to spend money to have a holiday, you might as well be spending it in a property that you own.
Even more than owning your first property, summer homes can be an aspiration that involves more daydreaming than practical planning – as with anything, that can be a fatal mistake. So here are some things to consider before you pack a bag and head off for the weekend.
1. Bank. Find out if your financial institution has any specific rules about lending for a vacation property. Some financial institutions require a higher down payment for second properties or require special property inspections before they lend you money. You may need to be in a stronger financial position than you anticipated to buy a summer cottage or other recreational property. Your real estate agent can also offer advice on this front.
2. Insurance. Usually you can’t get a mortgage without some form of property insurance. Check with your insurance company before you make an offer to see if they have certain requirements for buying a family cottage. Things like all-season road access or requiring the cottage be winterized may come into play. Best to know in advance what challenges you face from an insurance perspective.
3. Location, Location, Location! You can change a lot about a property, but the location is one of those ‘fixed’ items – unless you buy a houseboat perhaps. Make sure you consider the waterfront, commute, amenities, neighbours and neighbourhood before you buy. What if you decide to sell down the line? Is the area up and coming as a holiday destination? Are the amenities such that you’ll be able to shift the summer home if you needed to?
4. What happens when it’s not summer? Will you go up regularly to check on the property? Will you rent it out to others when you’re not using it, and if so, who is going to manage the timetable? What security would you need to put in place? Do neighbours look out for each other’s properties when they’re empty?
5. Future needs. If you plan to own this vacation property for a while, make sure you consider your future needs. Take into consideration the square footage of the cottage and property. Can you legally expand the house if need be? What are the zoning requirements? Will you need to upgrade the well and septic systems in the future? Are there phone or internet considerations you want to have in place later if not already? What improvements will you want to make long-term, for your own benefit or any future sale?
Canada is renowned for cottage country, and many try to escape to it, whether we own a summer home or are just gatecrashing someone else’s. Having a summer property isn’t necessarily a luxury item anymore and can be quite affordable. But a recreational property can also add to your sanity when the family needs an escape, or perhaps your wallet down the line. And most importantly, when winter rolls around again, you’ll be able to hold on to the warm glow that you’ll be back in cottage country before you know it.
– image source: Flickr – StuffEyeSee
