So you have finally decided to buy your dream cottage — a place with a relaxing environment. The bad news is that according to the latest statistics, the starting price for a standard recreational property in the most sought-after locations in Canada is approximately $300,000 or more. Then you have to add expenses such as maintenance fees, property taxes, utility bills, and travelling costs. Are you still interested? If so, continue reading.
Dream Cottage by Robert Moore
Things to consider before you make a final decision
The first and most important question is: to buy or to rent?
Advantages of buying
If you decide to buy, you are getting an appreciating asset. You will have a chance to spend more time at a place you love and possibly make new friends. Cottages tend to be places that bring family members closer together. From a financial point of view, there is a possibility of renting it out for part of the year. This may help you recover your initial costs. However, the problem is that renters usually require it during the prime summer season and you may not want to lose access to your cottage during that time of year.
Disadvantages of buying
The main downside of purchasing a cottage is definitely its cost: initial investments and additional expenses such as cottage repairs, maintenance, and property taxes. Also, you need to be prepared to roll up your sleeves at any time because there is always a risk that something will require repair.
Advantages of renting
Renting is nearly always the less expensive option. It may help you pay for some of the carrying costs. This is also an option if you do not tend to use the property from time to time only.
Disadvantages of renting
What discourages many people from renting is the fact that at the end of rental period, you have no asset at all.
Buying a recreational property is different than buying a house in a few key aspects, so if you want to end up with a good deal, here are the most important factors you need to think about:
Privacy: Some people like crowded, busy places, while others prefer to be isolated and secluded in quiet areas with only a few cottages around. It is therefore up to your personal preferences to choose the area that will suit your needs best.
Accessibility: When it comes to accessibility, there are two types of cottages. The less expensive ones are accessible only by water. However, you will need to invest in buying and maintaining a boat and marina (do not forget that water-access cottages are accessible in winter by snowmobile, so it is not impossible for strangers, and possibly intruders, to get there). If you want to use your cottage more often, however, it is advisable to buy one with road access.
Surroundings: Have a look at the size of the lake because the bigger the lake, the more activities you can do. If your goal is to enjoy time on a lake, search for bigger lakes. However, if you are looking for a quiet place, small ones may be a way to go. Also, consider what type of shoreline you want to have, whether it is protected or unalterable and whether you plan to buy the shoreline road allowance from the municipal government. Be mindful of what surrounds your prospective property and, again, take your privacy needs into consideration.
The Cottage Area by Robbie Sproule
View: What is more important than glorious views when buying a cottage?
Roads: Will the lane be maintained year-round? This is important not only because of the access to your property but also because your mortgage lender and insurer will charge you more if not. Do not forget to check road ownership (municipal, private, or deeded).
Travel time: How far are you willing to drive? Setting your limit is the first step. Don’t let the drive to the cottage be a horrible experience just because of extremely long travel time.
Decks and docks: Check for the overall condition of decks and docks (check boards, nails, etc.) because building a new deck or dock is a huge financial drain.
Services: Are services such as phone, grocery, hospitals, electricity, and garbage collection available? Is there a police or fire station nearby, and what is the response time? How long would it take to emergency medical services to reach your cottage?
Legislation: Restriction on what you can do on shorelines may vary from one place to another so you need to go through all restrictions before deciding to build a new deck, dock, boathouse, or a whole new cottage. Is it easy to get a permit to alter the area and how long does it take to obtain one? The Internet might be a great place to start. A reliable lawyer might help you with this.
Water source: There are quite a few options (drilled well, dug well, from the lake); however, do not forget to ask about the treatment system and get the water supply tested for pollutants (if you plan to drink it). The condition of the pump is important as well.
Systems: Before you take the plunge and buy your dream cottage, take the time to inspect these critical aspects. It is definitely worth its cost.
Feel: When buying a property, every one of us has some basic idea of what we are looking for. Every place has its own feel so you need to make sure that it fits your personality. If you are still not sure, it might be worthwhile to tour a region and check out other options.
- Talk to your insurance broker to find out whether your cottage is insurable.
- Make sure that the boundaries of your new place are clearly defined (e. g. the driveway is not encroaching onto someone else’s land).
- Take the environment into account every step of the way. To perform some specific actions, you’ll most likely need approval from the environmental ministry of the province or territory, and sometimes even the local public health department.
At the Cottage by Robbie Sproule
Plan A Budget For the Expenses
- Cabin and Cottage Insurance, Property Taxes
Ask a reliable insurance broker to give you an estimate for what you will pay to add the cottage to your policy.
Things such as electricity, phone, Internet, generator fuel, and propane all need to be considered. Do not forget to consider motor boat fuel.
- Commuting Costs
A long trip to the cottage might be fun, but it costs money. Budgeting for fuel costs and extra wear and tear on the family vehicle is therefore a must.
- Cabin and Cottage Maintenance And Repairs
If you decided to buy an older cottage, you will not escape the costs of never ending maintenance and repairs. Be prepared to set aside some money for this purpose.
Popular areas in and around Calgary
Located approximately one and a half hours from Calgary or two hours from Edmonton, Glennifer Lake is one of the newest reservoirs in Canada. Even though the lake with a surface of 17.6 square kilometres is clear and attractive for recreational fishing and boating, variable water levels make the shoreline and beaches less appealing than those in natural lakes.
Pine Lake lies just over an hour from Calgary. Its sandy shores offer a variety of vacation rental choices and year-round recreational activities such as fishing, water sports, boating, sun tanning, swimming, sand castle building, hiking, waterskiing, winter ice fishing, and cross-country skiing.
Pigeon Lake by Wikimedia Commons
One of the most intensely used recreational areas in Alberta, with more than 2,300 private cottages, ten summer villages, and nine hamlets established on its shores, Pigeon Lake has something for everyone. Whether you are looking for a place to camp, a cabin to rent, a home to live in, or simply a place to visit and have fun, you’ll find it all there. Other notable recreational areas include:
According to the Royal LePage 2012 Recreational Property Price Summary, average prices for standard recreational properties in Alberta range from $224,900 to $650,000.
Of course, there is always a way to obtain a property for much less. All you need to do is follow this advice:
- Do not focus on the most popular cottage areas. Instead, try to find a place with similar amenities in a different location. There are many regions with significantly lower-priced properties. Saving some $100K is definitely worth that extra half an hour of travelling.
- As I have already mentioned, road-access cottages tend to be more expensive than the ones accessible by water. Actually, cottages on islands are approximately 30 to 40 per cent cheaper than land-access retreats, depending on the area. Many of them offer the same amenities like mainland cottages.
- Have you considered shared ownership? That is the easiest way to split the costs. However, in such a situation, you need to be careful when setting out the terms of the partnership.
Finding your dream cottage can be quite a challenge; however, the rewards of finding the perfect one are countless.