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Many buyers looking for recreational properties have visions of closing their laptops, turning off their cell phones and hitting the open road for a weekend of peace and relaxation.

Buying a vacation property is an exciting investment. Once you’ve found a property that suits your lifestyle and needs, you’ll need to consider your financing.

Here are some things to know about financing your recreational property:

• When purchasing a property that is not your principle residence, 25 per cent of the purchase price must be used for a down payment.
• Lenders will consider the property’s rental income as well as other sources of income that will contribute to your mortgage payment.
• Household expenses shouldn’t exceed 32 per cent of your monthly gross family income. This is called your ‘gross debt service’ ratio, or GDS.
• Interest rates are on average about ¼ per cent above the rate that can be obtained on a principal residence according to a local mortgage consultant.
• If you rent out your vacation property some of the time, you may be able to deduct a portion of expenses you incur to earn rental income including advertising costs, insurance premiums, mortgage interest, property taxes, maintenance and repairs, as well as management and administration fees involved in maintaining your rental property. You can contact your local tax services office for more details.
• Keep in mind that federal capital-gains tax exemption applies only to the sale of your principle residence, not to the sale of your vacation home.

Buying a second home or recreational property can be a wise investment for the future. Not only are you making an investment in real estate, you are making an investment in yourself and the peace of mind that can come with your weekend get-away.