Offset the Cost of Buying a Vacation Home in Canmore with These Tips
There are plenty of reasons you might decide you want to invest in a second home in Canmore. As one of the most beautiful places in Canada, Canmore is a top vacation destination with a thriving real estate market, plenty to do all year round, and convenient access to Calgary only about an hour away.
If you are looking for ways to offset the cost of investing in a second home in Canmore, this post is for you. This new venture may be more accessible than you think.
Leveraging Home Equity
If you are already a homeowner, you are in an advantageous position to invest in subsequent properties. Leveraging your home equity can be a strategic way to turn your dream of owning a home in Canmore into reality.
Home equity is the difference between your home's current market value and the outstanding balance on your mortgage. It serves as a valuable asset that homeowners can tap into for various purposes, including real estate investments. Leveraging home equity involves using this financial resource to fund a down payment, cover renovation costs, or even entirely purchase a second property.
We know that rising real estate costs have led some hopeful investors to pause, but if you already own a home you are able to benefit from these increased costs because of your increased home equity.
Steps to Take
If you want to use your home equity to fund your new investment, here are some steps to take:
- Begin by determining the current market value of your primary residence and calculating your existing mortgage balance. The difference between these two figures represents your home equity. If you would like professional guidance through this process, we can help, so contact us any time.
- Investigate financing options that allow you to access your home equity for a second home purchase. Home equity loans, home equity lines of credit (HELOCs), or cash-out refinancing are common methods. Each option has its own set of terms, interest rates, and repayment structures, so gather as much information as you can to determine which is the best fit for you.
- Familiarize yourself with Canmore's real estate market, including property values, market trends, and potential for rental income. Canmore's scenic beauty and proximity to outdoor activities make it an attractive destination for vacation rentals, but you may also decide you just want the home to be for personal use. You may also want to list the property for long term tenants instead of as a short term vacation rental for a time.
How Vacation Rentals Offset Investment Costs
Many of our clients are being strategic about their investments by listing them as vacation rentals in the lucrative Canmore market when they are not in personal use. This can be a great strategy for many reasons. Even if your long term plan is to keep the property just for yourself, perhaps as a part time home when you work remotely in Canmore or as a plan for retirement, listing it as a short term vacation rental for a time can significantly offset the costs.
Listing your second home in Canmore as a vacation rental when you're not using it can help offset the financial burden. The income generated from short-term rentals can contribute to mortgage payments, property maintenance, and other associated costs.
In Canmore, the demand for vacation rentals remains steady throughout the year. If you leverage your home equity for down payment and closing costs, and then look to rental income to cover ongoing expenses, you can potentially invest in a second home for almost nothing out of your own pocket.