Since the arrival of the pandemic, more and more people have dreamed of going away from home for a few days or buying a second home, to refresh their ideas and breathe a breath of fresh air. little.
In 2016, according to a survey conducted by RE/MAX, 74% of Quebecers said they had spent time in a cottage in the past five years. According to another survey conducted in 2022, this time by Royal LePage, 400,000 baby boomers wanted to relocate to the countryside or to a recreational area in the next few years.
We can therefore see that the craze for chalets is not only due to the pandemic and that Quebecers have been dreaming of a chalet for a long time. Is it risky to buy a chalet with the increase in interest rates?
There are 3 types of possible scenarios when buying a chalet:
1) You sell your residence
Part of the money from the sale of your house will be used to pay for your new chalet.   ;
The risk is low, despite the increase in interest rates, because your residence will probably cost less in the countryside.
2) You buy a chalet and rent it part-time
We will analyze a scenario: let's say that before the increase in interest rates, you had the possibility of having a rate of 2.5% and that now we are at 4.5%. For a $400,000 mortgage, this represents a monthly increase of $420 (from $1790 to $2210). If you rent your chalet at $500 per night, that's only 1 night more rental in the month, if it's $250/night, only 2 nights.
So the impact on the profitability of a chalet rented part-time is without too much risk.
3) You keep your house < /p>
You want to enjoy the cottage as a second home without renting it out, so make sure your budget allows for the expense of a cottage.
Of course, to be able to successfully acquire a chalet, it is necessary to implement and apply certain tips… But first, let's see some advantages of taking the leap and investing in another property.  ;
The main advantages of a chalet
Investing in a chalet or a country house has its share of advantages, that's for sure !
Indeed, such an acquisition offers above all the possibility of enjoying a new environment to relax and avoid the hubbub of the city.
Also, the chalet can also become a good source of income, in the sense that it is often possible to rent it on the short term (less than 31 days).
Mission: Search for funds
The purchase of a secondary residence, owner-occupant, requires a down payment of at least 5%.
When the residence is rented in the short term, the down payment is a minimum of 20%.
A good way to proceed when it comes to obtaining funds for the purchase of a second home is to use principal residence equity as leverage for financing.
If you want to own a cottage with no money out out of your pockets monthly, consider renting it. So you will benefit too at the same time.
Check if the zoning allows you to rent short term.
Remember that rental income must be reported on your tax return.
Katrine Johns has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Gal Post, Katrine Johns worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my email@example.com 1-800-268-7128