INDUSTRY INSIGHT
WEALTH MANAGEMENT
SPONSORED CONTENT
FINANCIAL
TIPS FOR
OWNING
VACATION
HOMES
Provided by RBC Wealth Management and Eric A. Gregory, CFP®
T
he dream of a vacation home can be compelling because
of what it may represent to your family. In your mind, it has
the potential to be a special place where deep bonds are
forged, long-lasting memories are made and promises for the
future are kept.
If you want to purchase a vacation home (or if you already own
one), you can ensure the reality of it lives up to your expectations
by addressing two key issues: financial considerations and family
dynamics. Heeding simple financial wisdom may be a practical
way to manage these potential issues and help you fully enjoy
your vacation home.
Take a holistic approach to your financial goals
If owning a vacation home is important to you, following a
goals-based planning process can help identify and prioritize
your financial goals. This includes looking at your overall financial
picture to see how different goals and variables may affect your
ability to live the life you envision. What you learn can be used to
make well-informed decisions about funding your family vacation
home. As a result, you gain clarity about your current financial
well-being and confidence about your future financial security.
When taking a holistic approach to wealth management such
as this, there may be times when credit is a practical source of
funds for the dreams that are affordable to you. Borrowing money
using securities as loan collateral instead of selling assets may
offer a smart, yet untapped source of opportunity. It can help
you gain the liquidity you need while keeping your long-term
investment strategy in place. You may also enjoy competitive
interest rates and the flexibility to pay down the balance when
you choose.
Of course, you have other ways to borrow, save and invest
for your vacation home. You will want to review all possibilities
carefully to ensure you are making the right choice.
Run your vacation home like a business
Vacation homes can provide many wonderful family memories,
but they also create the potential for conflict. Quarrels may arise
over financial obligations, responsibility for damage caused to the
home and even about who gets to use the home during the best
time of the year.
To prevent these disputes from undermining family cohesion,
you might want to treat the property as you would a family-owned
business.
For starters, you could create a governance board. This gives
family members a forum for making decisions about running
the home, such as how to handle maintenance and larger
improvements. The board can also address nonfinancial issues,
such as determining who can use the vacation home at any specific
time.
You may also want to prepare for what will happen to the home
after you are gone. As part of your long-term plan for your vacation
home, you may want to place it in a trust and create an endowment
to pay for the property in perpetuity.
As far as your cabin, cottage, chateau or castle goes, there may
indeed be wisdom in taking a holistic approach to your financial
goals and running your vacation home like a business—because it
may help your vacation home be everything it is truly meant to be.
This article is provided by RBC Wealth Management on behalf of Eric A. Gregory,
a Financial Advisor at RBC Wealth Management, and may not be exclusive to this
publication. The information included in this article is not intended to be used as the
primary basis for making investment decisions. RBC Wealth Management does not
endorse this organization or publication. Consult your investment professional for
additional information and guidance.
RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/
FINRA/SIPC
For more information on Eric Gregory and how he can help you achieve your financial goals, call 724.745.8180, or go to his website at
www.rbcwmfa.com/thegregorygroup. He’s also found on LinkedIn at www.linkedin.com/pub/eric-gregory-cfp®/30/338/a40.
UPPER ST. CLAIR
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FALL 2018
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