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Some advice for owners and potential buyers of recreation properties:
From RBC Royal Bank Canada at www.rbc.com:
There are three main financing alternatives for purchasing a vacation home:
A conventional mortgage allows you to finance up to 75 per cent of the purchase price of the home, thus requiring a down payment of at least 25 per cent.
An insured mortgage makes it possible to finance up to 95 per cent of the value of a second home. If you happen to already own a cottage that has no debt on it, then you can also refinance that existing property for up to 90 per cent of its value and get an insured mortgage to purchase another vacation home.
A home equity line of credit makes use of the equity built up in your primary residence to let you borrow up to 75 per cent of the value of the home less the debt still owing on it.
You will need to have an up-to-date appraisal done to determine the home’s current value.
From High Country Properties Management Ltd at www.highcountry properties.com:
There are three main ways to rent out your recreational property. If you buy a condo- minium, it’s likely there will be an on-site rental program. Simply sign up, make a list of when the property is available for rent and you will receive a cheque, either monthly or quarterly, for revenue less expenses and a management fee.
You can also arrange for the services of an outside property management company that specializes in vacation rentals.
Again, you will need to come up with a schedule of when you want to use your vacation home. Then, the management company will look after marketing your property, handling reservations and payment, providing linens, cleaning and maintenance, and send you a cheque for rental revenue, less expenses and a management fee, usually about 40 per cent.
You can do it yourself, but first you will need to make sure zoning bylaws allow short-term rentals in your area.
Then, arrange appropriate insurance and keep suitable accounting records. Also, arrange for someone to handle cleaning, emergency repairs, or any check in difficulties that your guests may experience.
Many of the same tips that apply to home and property security in the city also apply to recreation properties in the country.
Install timers to turn lights and radios or TVS on and off periodically.
Ask a neighbour (or the property’s private security, if applicable) to check in on the site occasionally. Just as in the city, mowing the grass and shovelling the walk gives properties that lived-in look. The neighbour can also check for property damage or signs of mishaps such as waterline leaks.
Reinforce windows with metal grates, and install sturdy doors. The more work a thief faces to break into a property, the more likely they will give up and choose an easier target.
Turn off water and electricity before leaving a property for an extended period.
Don’t leave valuables in an unattended property. Also avoid leaving items such as liquor, hunting rifles and expensive equipment behind.
If possible, install an alarm system that is either monitored or programmed to notify you in the event of a break-in or other emergency.
Consider joining — or starting — a crime prevention program such as Rural Crime Watch.
Clearly label any possessions left on the property with non-removable stickers.
Inform local police or RCMP when the property will be unattended, and periodically contact them to find out if there have been any security issues near your property.
An insured mortgage makes it possible to finance up to 95 per cent of the purchase price.