Should You Mortgage for Your Outdoor Lifestyle?

As a newcomer to kite boarding, I decided to take a sunshine vacation to La Ventana Mexico this year, shortly after the Christmas holidays. Located about two hours northeast of Cabo and originally a fishing village, La Ventana has developed into a quaint yet rugged sunshine destination for those looking for some adventure in their travels. If there is a Mexican Squamish, La Ventana may be it.

Like most sunshine destinations, the question of purchasing real estate came to mind shortly after I arrived. Almost immediately, I drew parallels between my home purchase in Squamish 10 years ago and the possibility of purchasing real estate at my new vacation locale, where outdoor adventure and year-round sunshine coexist. As exciting as it is imagining living in a place where the activities we love are on our front door step, it’s important we ask ourselves a few key questions before making a real estate decision:

How can I make living in my outdoor recreational paradise financially viable?

Wherever you decide to purchase real estate, ask yourself this question – can I afford to own property here? If not, what will it take for me to afford property here? The answer to affordability may include purchasing with family members or friends who may also want to live or recreate in this location with you or simply hold a financial interest in an investment with you.

Do I want to live in my outdoor recreational paradise part of the year or full time (and for how many years to come)?

As much as this is a lifestyle question, it’s also a return on investment question. In Squamish for example, perhaps you plan to purchase a primary residence as a first time homebuyer with five per cent down. Under this scenario, after owning your home for just a short period of time, you will start receiving a return on your investment due to your small down payment. That being said, is your objective to live in Squamish for many years or for a shorter period of time? The more time spent in the same location typically means the more money you earn.

Does it make financial sense to purchase real estate in my outdoor recreational paradise?

From a vacation home perspective, your cost of ownership should come close to offsetting what it costs to rent a similar property whether in Squamish, Mexico or elsewhere. A modest amount of additional expense may also be justified by the convenience of property ownership and the potential for future appreciation in property value.From a homeownership perspective, you need to ask yourself how purchasing real estate fits in with your work, travel, recreation, and family situation. For example, will you commute to an urban centre for work, will you secure employment locally or are you in a position to work abroad part of the year.

Regardless of where you purchase, most locations these days require you make a significant financial commitment. Your decision to commit needs to be paired with your choice of lifestyle. Therefore, do you and your family see added value relocating somewhere for lifestyle compared to where you currently live?