Buying a Vacation Home or Cottage

By: Sylvia Smith

Buying a Vacation Home or Cottage



Thinking about buying a vacation home or cottage creates images of idyllic days relaxing with friends and family amongst the beauty that Ontario has to offer.  It creates images of a waterfront retreat and the kids screaming and yelling of joy as they jump into the lake and evenings around the fire pit enjoying the stars and smores.
Do you dream of escaping the urban, city commotion, and seek solitude whether by a lake or simply on a remote lot?  The recreational market contains many alternatives, the most notable of which are:

Seasonal Cottages

Cottage, country cottage, muskoka cottage for sale, cottages in Canada

The largest category of recreational properties is non-winterized structures used during the spring, summer, and winter months (although year-round use is favoured given escalating prices and increasing services and facilities offered to rural recreational properties).
There are still many seasonal properties to be found in Ontario and these properties also tend to have a lower price point.  In many cases, however, terrain, water access only, uncleared road access during the winter, and snow/ice conditions make winterizing unrealistic or impossible.  The most expensive and most popular cottages are those that are on a lake or river.

Winterized/Year-Round Cottages/Homes

Country Cottage

Winterized and year-round cottages and homes are currently an ever-expanding category of vacation properties and involve a greater investment.  Buyers also often invest in expanding and renovating or building a permanent home for either full or part-time use.  
Country Homes

Country homes, hobby farms

At one time, only affluent city residents enjoyed the benefit of a fully furnished country home, but the trend now makes owning a country home much more accessible to families that are seeking the solitude and tranquility of an off-water acreage outside the hectic life of city living.

Chalets, Blue Mountain, Collingwood

Chalets are fully equipped homes that are typically purchased for winter activities and sports.  Skiing tends to be a major attraction but the growth of these developments in Barrie, Collingwood; Collingwood, and Huntsville areas, in particular, has given rise to a wide range of facilities and services for chalet ownership. There are also a number of ownership options ranging from condominium, timeshare and co-ownership
Hobby Farms

Hobby farms were originally purchased to further a personal hobby, such as training animals, growing a limited variety of crops.  Historically the typical buyer was a full-time professional seeking the exercise and enjoying pursuing a small business.  In recent years, hobby farms are often simply country homes to escape from the hectic, busy lives of city living.

Why Type of Property to Buy?

How will you use your vacation home or second property is a big decision and one you will have to give some thought to before taking the big plunge. How you plan to use your second property will significantly impact your finances, the kind of property you purchase, and where you buy.
When you reflect on your goals, you may also want to consider the following:

Ongoing Costs and Maintenance to Consider

Buying a second home, vacation property or cottage isn’t only about the price you pay for the property. There are a number of other considerations to keep in mind:
Home Insurance – property insurance will most likely be more expensive if you are not living in the second property on a full-time basis.  You will also pay a premium if the property is located far from emergency and fire services.   Also, keep in mind that most absentee home insurance policies still require someone to check on the property every 30 – 69 days.

Water – depending on where you buy there is a likelihood that you will not have access to municipal water so you may need to maintain a well or water treatment equipment.

Garbage – garbage and recycling services vary by community.  If the community does not offer garbage pickup services you may find yourself paying to drop off garbage at the local garbage dump.
Maintenance – property maintenance outside city limits can be a little more involved than in the city. In addition, to the standard home maintenance items such as plumbing, roofing, electrical, eaves troughs, furnace, and air conditioning maintenance, etc.  Don’t forget to plan for grass cutting, gardening, tree maintenance, costs to service septic tank, water well, water treatment, dealing with critters.  It is also a good idea to have someone you can have on call when you aren’t at your vacation property.
Heating and Hydro –  There are many more heating options in cottage country than in Toronto or in a city.  Your cottage may be heated by a fireplace, electrical baseboard heaters, and if you have a furnace it may run on propane or natural gas (which entails regular propane delivery).  Of course, you can’t forget that you will have a hydro bill as well.

Internet – Prepare that depending on where your vacation property is located your internet service may not be as reliable and may likely be more expensive.  As much as we may not be happy with the big Toronto internet providers they definitely provide way FASTER service and for less money.  Be prepared that you may only have 1 or 2 internet providers to pick from in rural areas.
Property Taxes –  property taxes can vary greatly across Ontario.  Lakefront properties typically have higher property taxes compared to rural properties and depending on the community can also be way more expensive than Toronto property tax rates.
Capital Gains Tax  –  If your vacation property isn’t your primary residence, you’ll have to pay capital gains tax when you sell.  
Buying a cottage or vacation property is definitely more involved than buying a home in the city.  Working with a seasoned realtor that has firsthand experience will be the key to your success in finding your dream vacation property.  If you have any questions or have decided to start your search for your dream second home please reach it would be my pleasure to help.