5 Questions To Ask Yourself Before You Buy A Cottage
“Vacation properties are one of my favourite investments because they allow you to reap a lot of personal and financial rewards. If you’re smart with your planning, you can use your cottage or vacation home for your personal enjoyment when you want it, and rent it out to make money when you don’t. But there are some important differences between your primary residence and your cottage. Before you invest in a vacation property, make sure you’ve asked yourself these five questions.”
1 Can I Afford It?
People tend to get emotionally attached to vacation properties and don’t always consider the financial implications. Plan ahead for renovations and upgrades you might want to make, but also set aside money for unexpected problems like pest control or property damage from the elements. And before you can even think about renting it out, you need to be sure that you can afford it on your own. Vacation properties can sit empty for long periods of time. If you can’t afford it on your own without the rental income, it’s not a smart financial investment.
2 What Are the Expenses?
Expenses will vary depending on where your property is, what kind of condition it’s in, the size of the property, and whether or not you’ll rent it out, but potential costs include:
* A caretaker to check in and perform general maintenance.
* The cost of gas if you plan to manage the property yourself.
* Added maintenance costs as vacation homes tend to get more battered by weather than primary homes.
* A cleaning service to clean up before or after renters.
* Smart technology such as a remotethermostat or remote key.
* Added insurance costs as insurance is typically higher with vacation homes because they are vacant a lot of the time.
3 Is it in a Convenient Location?
The distance from your primary home will determine whether you can maintain your vacation property on your own or if you should hire someone local to do it. You also need to consider how convenient it is for renters. Is there road access? If it’s an island property, you’ll need to arrange boat service. Also check out what amenities are available in the area (and if they’re year-round or just seasonal). If you rent to young people, they might want some nightlife nearby, while families with kids might be interested in family-friendly local attractions.
4 Is it Winterized?
A property you can use year-round is a better investment (both personally and financially) than one that is only liveable for a couple of seasons. If you live in a cold climate, make sure the home is properly insulated and winterized. Other things to
check out include winter road access: can you drive in during the winter? Winter vacation homes can be a lot of fun and make a lot of money if they’re in a good location, but they must be comfortable and convenient.
5 Can I Share It?
Renting out a property to strangers isn’t for everyone, but if you still want the benefits of a vacation home without weathering all the costs on your own, consider sharing it with another family. This can get dicey because emotions can sometimes get in the way of smart decision-making, but if you plan appropriately and draw up a fair agreement ahead of time, you can avoid headaches and enjoy the benefits.