Posts on buying a vacation property begin and end with the financial aspects of the process. Can you afford it? What are the tax implications, and what happens to the property when you pass away?

What about your real life and how a vacation property fits into it? That begins with a simple question - does the dream fit your reality? We'll assume that your financial plan is in place and that you can afford it, but let's talk about how a vacation property fits into your life.

From what we have learned from our clients who have bought or sold a vacation property, these are the top points you need to consider and the questions you need to ask yourself when considering a vacation property.

1. Life goes in phases and what works today is not necessarily what works tomorrow, and your life is different than everyone else's. Focus on your life and how you truly live, not an idealized advertised version of how you think you should live.

• We see many clients who love going south but also get pulled back to our Calgary winters by family or the the magic and joy of grandchildren so for them a second home often does not work.
• Are you an adventure traveler? Golfer? Are you a homebody?

2. Every form of home away from home has advantages and drawbacks.

• Hotels and rentals: Freedom from maintenance, but sometimes not available.
• Personal ownership of a property: Your castle, but it is pricey to buy and maintain.
• Time Share: Lots of options, less expensive, yet it's not your place exclusively.

3. Decide if you like to go to the same place every year, or if you are a free spirit and love to see something new each time you travel.

• If you are the type who wants to go set up a second home in another climate, home ownership probably does suit you best and the families that we know who have done this love it.
• If you love to roam and take adventures you are probably better suited to rentals, resorts, time shares, etc., unless you have enough capital to own more than two homes.

4. Decide what it is worth to travel with only your wallet or purse and show up at your vacation home that you never rent to others and holds a dresser stocked with your clothes. Some will tell you this is priceless!

5. Do you value the service and attentiveness that comes with staying at a resort and the "no hassle" feeling? Some love the convenience of lock and leave!

6. Do you travel enough to warrant owning a second home? Many will tell you that they thought they would use it more than they actually did or they did use it for a while and then life changed.

7. Think about your age and phase of life. We would suggest most people travel more when they have the time, the money and their health. These don't always line up perfectly.

8. Make sure your spouse or partner is onside, as you talk about it you may find that their opinion on the matter differs from yours.

9. Think about what your ultimate goal is for a vacation property: A private sanctuary? Golf resort? Condo on the beach? A second home for getting together with kids and grandkids?

The bottom line is that there is no one size fits all and even if you can afford it it may not fit your life, however if you do spend two to three months away a second home may actually fulfill your dream!

 

All the best,

Randy, Ian, and the team at R&R Investment Partners