Now that spring is finally starting to clear our lawns of snow, our thoughts eagerly turn toward summer. And for many people, that means thinking about returning to the cottage.
Image: Faramarz Hashemi
If you don’t have a cottage, you might have thought about getting one recently. After all, during the recession, the prices for cottages have dropped. But before you begin to look for that summer dream home, make sure you keep these tips in mind:
1. Don’t think about it as an investment
If you are looking for investment properties, you might consider buying a cottage. But most experts say that this isn’t a wise idea. There are much easier investment ploys than buying a cottage. The problem with cottages is that they can be difficult to sell if you fall into a poor financial situation. And even if you can sell it, the recent downtown in the cottage market shows that the recreational property market is volatile, and you could even lose some of your principal in a particularly slow market.
2. Be aware of the costs
Owning a cottage can be expensive. Not only do you have to worry about another mortgage, but there are all the usual expenses: property taxes, insurance and you have to spend money on it every year to make sure it is properly maintained. It can also be difficult to get insurance on your property, particularly if you aren’t using it for ten months of the year. And some lenders refuse to give mortgages to properties that are in very remote locations.
Some people try to offset these costs by renting the recreational property for parts of the year. But that brings its own problems: being a landlord for people who potentially live two or more hours away is not ideal. And finding someone to rent the home can be difficult.
3. Buy because you love it
All of that being said, having a cottage can be one of the great ways to enjoy a Canadian summer. It can also be a wonderful place to live your retirement.
As with anything enjoyable in life, there will always be downsides. But if you go into the purchase with enthusiasm and the right mindset, you’ll be able to handle all of the difficulties with a feeling that it is all worth it.
Nelson Goulart
Broker of Record with Signature Service GMAC Real Estate
www.ssgmac.ca
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