January 6, 2013 | No Comments Yet
You must ask yourself the question: Can you afford a second home? Financial institutions offer several methods of paying for the cottage, such as increasing the mortgage on your primary residence or creating a second mortgage, but you ultimately need to have the income to make the payments.
Are you prepared for all the costs – not just the purchase price, but the taxes and upkeep?
There are important financing considerations. It is important to realize that not all cottages qualify for traditional mortgages. If the cottage of your dreams is similar to your house, with all the amenities of home, then chances are you can get a traditional mortgage.
There are other financial implications as well. If you choose to rent out the cottage, then you become a landlord and must be aware of the tax issues this will entail. If you do plan to rent out your cottage, then you should factor that in to where you plan to buy. You want to buy where people will ultimately want to rent. Additionally, it should also be in a location that is convenient for you, from a landlord’s perspective.
When buying a cottage, you should also ask the most basic financial question: Is it a good investment? Generally speaking, the answer is yes, if you hold onto a property long enough. Demand for recreational properties, especially waterfront properties in a good location, remains strong.