When it comes to luxury real estate, you’ll always want to be careful – after all, you never really know what you’re getting until you get it. It’s important not to invest more than you can afford and make sure that you’re really in the best place to buy a home. Most people will actually want to go with an all cash deal instead of taking out a second mortgage on their home, but this is one of those purchase decisions that you’ll have to figure out; which one that’ll work best for you will depend on your situation and circumstances.
Start Looking Locally
While most of us think of buying a vacation condo somewhere bright and sunny, you might want to stick closer to home. Looking locally first will give you an idea of what’s out there and what you can afford. Even if you want to buy a vacation or holiday cottage for the summer, you’re going to need to start doing your research locally to see if you can afford that. If you can’t afford going local, you probably can’t afford to go somewhere fabulous and sunny either.
Should You Buy American?
Many Canadians end up going south to buy a home because it was cheaper, the keyword being “was”. Right now prices in the US are going up and up and with more new construction and housing going up in the United States, the cost of a cheap house just isn’t worth it. You’re going to see home prices rise up more and more over the next five years to the point where with taxes, travel expenses and maintenance you would probably just have been better off buying a Canadian home instead.
Should You Go All Cash?
If you’re buying a second home or vacation condo, honestly just luxury real estate in general, you’re going to think about buying a luxury home for sale with all cash if you can. There’s just no reason to take out a second mortgage on your first home to buy a vacation condo that you just can’t afford. You’re going to need to look at your finances and be really sure of where you are before you start shopping for a home. Once you know what your budget is, start looking at luxury real estate and homes for sale in the place you want to live.
Can You Afford it?
Again, you have to know you can afford it. It’s better to wait a couple of years now to get the vacation property you actually want rather than spend a boatload now for an eyesore you’ll never be able to offload. It’s all about understanding how much you can really afford and how much you are willing to spend. You don’t have to go all cash on your luxury real estate, but you do want to borrow as little as possible before you end up buying a new home.