These can be used to buy a second home, but not to buy a home to replace your current primary residence, at least not immediately. It is possible to keep your current home as a rental property and buy another primary residence. When you buy another property you need to be prepared. Look at all your options before making a move. Learn more on how to participate in the Home Buyers’ Plan. There are some great benefits. Condo in the city? The Pros and Cons of Renting Out Part of Your Home On the surface it seems like a fabulous idea: Carve out a portion of your home, rent it out and use the rental income to pay your mortgage. But like most home purchases, buying a second home probably means you’ll need a second mortgage.When you’re going through the second home search and purchase process, there are a number of factors you’ll need to account for. The rules are different this time around. Buying a Second Home as an Investment. Pros of buying a second home: 1. But if you're an owner, you can use your equity to help buy your next property. Always use a real estate agent when buying a home. 6. Using savings and investment. Here are some key questions and tips to keep in mind as you contemplate making a purchase. In many cases, the rent money is used to pay the monthly EMIs of a Home Loan. After all, rent prices have been steadily on the rise—clocking in at a national average of $1,381 in May 2018, according to a RENTcafe report. Then you can use the money being brought in to purchase something for yourself. Apply for a mortgage. Owning a Vacation Home can be a Reality. Can I Rent My Home & Get Another Loan to Buy a New One?. If your goal is to earn some passive income by renting out your first home, there's a case to be made for taking that route. But this depends on how much equity you have. A second home can act as both a vacation home and an investment, as homeowners can easily rent them out when they’re not staying there. The difference between the two mortgages is given to the homeowner in cash. Property taxes , insurance , maintenance and repairs come along with the keys to a secondary property. Buying a second home means taking on more than just mortgage costs. Buying rental property can be a great way to invest for the long term and generate monthly income. If you’re a first-time homebuyer, the HBP allows you to withdraw up to $35,000 from your RRSPs tax-free to put toward buying your first home. Extra income through rent: One of the most obvious benefits of buying a second home is earning extra money by leasing or renting it out to tenants. For one, you can sell your investment home and use the proceeds to buy another rental property without paying a capital gains tax. Buying a vacation property or second home is something special you do for yourself and your loved ones — a way to share the good things in life. Want to buy a cottage near the lake? Suppose you’re considering buying a second home to rent out or move to and rent your old home. If you plan to buy a home in the near future, focus on building your savings. Get the funds you need for a second home When you're a first-time home buyer, you don't have the luxury of home equity Opens a popup.. 7. You Need to Own a Primary Residence First. Your home equity makes it easier to get approved for a mortgage. All three options — home equity loans, HELOCS, and cash-out refis — can be used to buy a second home, provided you have enough equity. If you’ve got an inexpensive rental apartment it might make sense to buy an investment property that can start making money for you before you buy your own home. The RBC Vacation Home Mortgage can help you enjoy that experience sooner. Or maybe you want a rental property to invest in or fix up and flip. When you’re ready, contact Scotiabank advisor. 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