Winter Vacation Hot Spots: Rent or Buy?

by Lauren Souch December 5, 2012 / 2 Comments

Photo by Duncan Rawlinson

While many Canadians choose to travel south for a vacation during the frigid winter months, many of us prefer to enjoy the snow-covered Canadian landscape with some good, old-fashioned winter fun.

From sliding down the slopes to skating on frozen lakes, and navigating tree-laden cross country trails, there’s no shortage of things to do – that is, if you don’t mind the sub-zero temperatures.

If you’re lucky, you might be able to book a free weekend away at your aunt’s ski chalet or best friend’s family cottage. But the rest of us really only have two options, if we’re looking for a winter getaway each year: rent or buy.

The Cost of Renting vs. Buying

Let’s take a minute to compare the cost of buying a winter vacation property at Whistler to the cost to renting a similar property.

Ownership of a winter home can come at a premium, especially in a hot area like Whistler, B.C. where a three-bedroom ski chalet will run you a minimum $1.5-million. A condo is much more affordable, in the $350,000 to $500,000 range, depending on location and size.

A one-bedroom condo at the base of the mountain in Whistler would cost you roughly $2,506 for a two-week rental, while it would cost just $952 in mortgage payments for the same period. However, this doesn’t take into account monthly costs, such as utilities and maintenance; and there’s always that down payment that needs to be made in order to purchase a property, plus a variety of closing costs.

A three-bedroom chalet is also cheaper, when comparing bi-weekly or monthly numbers. Although, with a nearly $2-million price tag, a property like this would not be realistic for most Canadians to purchase. And buying either of these homes would mean you’re making the above mortgage payments on a regular basis, as opposed to a one-time rental fee, so it is more costly long-term.

However, the rental cost is not always the only cost associated with your vacation: some rentals don’t include taxes in their prices and some have extra fees, such as a cleaning fee or a charge for more than a certain number of people. While renting is certainly the cheapest option for a short-term getaway, it’s not an investment beyond your week-long urban escape.

Investment Potential

A chalet or mountainside condo can be a worthwhile investment, especially if you can rent it out when you’re not using it. In a hot area like Whistler, it’s likely the value of your property will only increase as time goes on; and by renting it out you’ll be able to recoup most of your annual mortgage.

Take our one-bedroom condo above, for example. Over the course of a year, your total mortgage payments would ring in at $20,304. If you rent it for just 12 weeks of the 16-week peak period from December 1 to March 31, at $174 a night, you would make $14,616 – and that’s not including the possibility of a summer rental or increased charges for popular booking times like Christmas, New Years, or spring break.

If you’re already a homeowner and a second winter vacation property sounds like an attractive option, you could consider using a home equity line of credit (HELOC) to fund your down payment. As you pay off the mortgage on your first home, a HELOC allows you to borrow up to 65 per cent of the property value – less your outstanding mortgage amount. This could give you the extra cash needed for a down payment on a second home, like a vacation property, from an asset you already have.

The Bottom Line

Owning isn’t right for everyone: if you can only fit a week’s vacation into your already busy winter, renting might be more logical – and cheaper – for your lifestyle.

Although I’d love to own a vacation home someday (and rent it out when I’m not using it!) realistically that can’t happen now, so I’d rent if I wanted a weekend getaway with friends.

Do you own a winter (or summer) vacation property? And if not, is it something you’d like to purchase one day or do you prefer renting?

categories: Real Estate
  • I say it depends on your preference. My feelings toward buying a vacation property is that every time you have an opportunity to go on a vacation, you’ll feel guilty about having spent so much money purchasing this home that you’ll be inclined to go there more often versus travelling to other destinations and discovering the world, which to me is very important. I don’t want to feel like I’m tied down to one spot, but that also varies from person to person. I would only consider buying a vacation property or even retiring in a place that I’m totally in love with once I’ve had the opportunity to travel the world. But if you are going ahead and buying that vacation property anyway, then the only way I would do it, is if I know I can rent it out the other times I’m not there so it can pay for itself, then it’s worth it to me and saves me money in the end!

    • Lauren Souch

      That’s a great point about feeling like you “have” to always use it, since you bought it. Travelling is something I love to do as well, and I definitely think owning a property would weigh in on my travel plans, especially if it wasn’t particularly close to my home (ex. a winter home in Flordia!).

      On the other hand, the nice thing about owning a vacation property (within a few hours of home) is that it can be used any time, whether for a week-long vacation or an impromptu weekend getaway. I’d love to own a cottage or vacation home in Ontario one day. However, I grew up with a “family” summer home (it was my grandparents, but the entire extended family was welcome to, and encouraged to, use it), so I might be a bit biased!