Is it a good idea to invest in a holiday home?

Since the outbreak of the pandemic, more and more people have been dreaming of leaving home for a few days or buying a second home just to refresh their ideas and catch their breath.

In 2016, according to a survey conducted by RE/MAX, 74% of Quebecers said they had stayed in a cottage in the last five years. According to another 2022 survey, this time by Royal LePage, 400,000 baby boomers plan to move to the countryside or resort area in the next few years.

So we can see that the craze for chalets is not just due to the pandemic and Quebecers have been dreaming of a chalet for a long time. Is it risky to buy a vacation home when interest rates are rising?

There are 3 types of possible scenarios when buying a chalet:

1) You sell your apartment

A portion of the money from the sale of your home will be used to pay for your new vacation home.

Despite rising interest rates, the risk is low because your home in the country will probably cost less.

2) You buy a chalet and rent it part-time

We will analyze a scenario: let’s say that before the interest rate hike, you had the opportunity to have an interest rate of 2.5%, and now we are at 4.5%. For a $400,000 mortgage, that’s an increase of $420 per month (from $1790 to $2210). If you rent your cabin for $500 a night that’s only 1 night more rent per month, if it’s $250 a night it’s only 2 nights.

The impact on the profitability of a part-time chalet is therefore not too great a risk.

3) You keep your house

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, in order 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 plunge and investing in another property.

The main advantages of a holiday home

Investing in a country house or country house has its advantages, that’s for sure!

Indeed, above all, such an acquisition offers the opportunity to enjoy a new environment to relax and escape from the hustle and bustle of the city.

In addition, the chalet can also become a great source of income as it is often possible to rent it on a short-term basis (less than 31 days).

Task: fundraising

The purchase of a second home, owner occupancy, requires a deposit of at least 5%.

For short-term rentals, the deposit is at least 20%.

A good practice when raising funds to purchase a second home is to use the primary home’s equity as leverage for financing.


  • If you want to own a cottage with no monthly cash out of your pocket, consider renting it out. So you can benefit from it at the same time.
  • Check whether the development permits short-term rental.
  • Don’t forget that rental income must be declared on your tax return.

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