Owning a winter vacation home means spending time with family and friends skiing, snowshoeing, ice skating or just sitting together around a warm fireplace.
But as with any real estate purchase, the first step is deciding if buying a winter vacation home makes sense for you.
Tom Feigs, a Certified Financial Planner with Money Coaches Canada, says the first consideration is whether you should actually buy a property or just rent a place during winter vacations.
“Can you justify the ownership by how frequently you use the vacation home or should you (look at) a rental opportunity instead?” he said.
Feigs says if buying makes sense, then you need to consider any purchase within your long-term financial planning.
“Does it fit into your overall personal goals? Does it detract from your retirement outlook or does it enhance your retirement outlook?” he said.
“A VACATION HOME SHOULD NOT DOMINATE YOUR LIABILITY. IT SHOULD BE AN AFFORDABLE THING THAT DOES NOT PINCH YOUR CASH FLOW.” – TOM FEIGS, CERTIFIED FINANCIAL PLANNER
He recommends that buyers cautiously approach financing and spend far within their means to achieve winter vacation home ownership.
“A vacation home should not dominate your liability,” he said. “It should be an affordable thing that does not pinch your cash flow.”
He adds it’s important to consider all the financial costs of ownership, including condo fees, property taxes and renovation expenses, as well as the quality of the area you are buying into. This is also the time for buyers to determine whether they want to rent out the property when they are away to cover some costs.
Raymond Langlois, a licensed associate with the Canmore office of PEKA Professional Property Management Ltd., says before buying, you should confirm whether rentals are allowed in the area under land use bylaws, and if the property is a condo, under the condo bylaws as well.
For instance, Langlois says Canmore has zoning that allows nightly rentals in some areas, while other areas allow only rentals of one month or longer.
Owners will need to maintain their home to a certain standard of cleanliness and furnishings, and limit personal possessions left in the unit, to meet the expectations of renters. Langlois says another consideration when buying is the location – having convenient access to local amenities is crucial, since most vacationers only have access to one vehicle.
“(Otherwise) if one of the family wants to go off in the car somewhere, the other people are left stuck at the house, as opposed to being walking distance to downtown, so people can go grab a coffee,” he said.
Langlois adds that while some winter-home owners might choose to look after rentals themselves, many people prefer having a professional management company handle everything.
He says management companies offer the necessary expertise, as well as on-site staff.
“We have the resources close by to address any issue that may come up, whether minor or major,” he said.
Source CREB now Jan 2019