The real estate market in the province of Alberta is hotter than ever before; because of this, many Albertans are looking into buying a new home.

But, before you start looking for a new home in Alberta, you have to decide what you want to do with your old home. In most cases, homeowners have two options — sell their current home and put the profits towards the new property or keep both properties.

Although most Albertans tend to sell their old homes, you may want to think about keeping your current property if you’re buying a second home in Alberta.

Continue reading if you'd like to learn more about buying a second home in Alberta.

Four types of “second homes” in Alberta

There are several types of properties that Albertans may want to purchase as a second home. Some examples include:

• Vacation homes
• Retirement properties
• Rental properties
• For family members

Vacation homes

Instead of spending countless dollars on travel-related expenses like airfare, travel insurance and rental cars, you can skip the tropical getaways and invest in a serene vacation home for you and your family.

Buying the perfect vacation home in Alberta, like a cottage or lakeside property, does take some time, effort and searching. That being said, visiting a vacation home is a great way to take a break from the hustle-and-bustle of everyday life without needing to take long, expensive flights to a foreign country.

Additionally, if you're buying a vacation home in Alberta and not planning on renting it out, you can make a downpayment for as little as 5%.

Retirement property

Are you the type of person that likes to be prepared for the future? Then you may want to consider buying a second property in Alberta to use as a retirement property (also known as a nest egg).

To get the most bang for your buck, Albertans should look for high-quality homes in lower-value communities that have lots of potential for financial growth. If you do a good job taking care of your nest egg, the home will likely grow in value significantly by the time you retire. You then get to choose if you'd like to sell the home or move into it.

Rental property

Buying a home in Alberta as a rental property can be quite a lucrative decision, especially if the property is located in a rapidly growing community.

Purchasing  rental property in Alberta can be costly, but if you play your cards right (finding trustworthy renters, selling when the market is high, etc.), it can become a fantastic source of secondary income.

Albertans should be aware that they need to make a 20% (or more) down payment if they intend to rent out the property to tenants.

For family members

It's challenging for young Albertans to enter the housing market. With the average price of homes rising, few young Albertans have enough saved up to make a significant down payment.

Because of this, more and more parents are helping their children buy a home in Alberta (and a number of other Canadian provinces).

Like vacation homes in Alberta, you only need to make a 5% down payment on the property if you are buying it for your child or another family member (mother, father, sibling, grandparent, etc.). 

Expenses to consider before buying a second property in Alberta

Although we can't teach you how to buy a house in Alberta (we'd be here all day!), we can give you a quick list of expenses that you should consider before committing to a decision.

Some important (and often overlooked) expenses that homebuyers should take into consideration include the following:

• Moving expenses
• Furnishings
• Insurance

Moving expenses

Moving can be quite expensive, even in Alberta. On average, homeowners pay approximately $1,145 to $3,272 to move into a new home in Alberta. Although this may be a small amount of money in comparison to the price of a home in Alberta, it should still be taken into account.

Furnishings

The total price of the furnishings in your home will depend on a number of factors, like your style, budget, the size of your home and your current decor.

However, if you're buying a second property, you'll likely need to purchase mostly, if not all, brand-new furnishings for the space. This can be pretty pricey, as the average cost to furnish a standard-sized home in Alberta is roughly $16,000.

Insurance

High-quality home insurance in Alberta is never cheap. However, having reliable property insurance can help you save a lot of money at the end of the day.

If a covered risk (please refer to your policy wordings) significantly damages your home or its contents, your home insurance may help cover the entirety, or a portion, of the costs. You can obtain further financial protection by investing in home insurance add-ons (endorsements), like overland water and earthquake insurance.

If you are purchasing a vacation home, retirement property or home for a family member, you'll need to buy a home insurance policy. If there is no mortgage, insurance is not mandatory, however it would help protect your investment in case of a loss.

On the other hand, if you're purchasing a property with the intention of renting it out, you'll likely want to invest in landlord insurance.

Unlike the other factors on this list, property insurance isn't necessarily a one-and-done type of expense. You're responsible for making monthly or annual insurance payments. Because of this, you need to factor enough room into your budget for multiple payments. Doing this will ensure that you don't accidentally forget to make a payment in the future (doing this too many times can negatively affect your rates).

Compare competitive home insurance quotes with the pros at Surex

At Surex, our experienced insurance advisors work closely with some of the top property insurance companies in Alberta (and the rest of Canada!). Working side-by-side with some of the best home insurance companies in Canada allows us to provide Canadians, like you, with a variety of quotes for some of the best insurance products on the market.

Reach out to your Surex insurance advisor to receive a collection of quotes in ten minutes or less. While you're speaking with your advisor, don't forget to ask about the benefits of bundling your policies with a single provider (here's a hint — you can save up to 25%!).