In an earlier blog post, I explored the importance of financial readiness when thinking about buying a cottage or recreation property. As most Canadians know, a cottage is so much more than a relaxing oasis or fun family getaway – it’s a truly magical place. However, it also carries with it financial and maintenance obligations that can sometimes be too much to handle. While I certainly don’t want to cast any shade on your dreams of cottage ownership, it is important to delve a little deeper into those tricky additional costs involved so that you can make a sound decision before buying. Otherwise, your cottage may become a financial and personal burden instead of the stress-free haven it’s meant to be. Let’s have a look at a few extra expenses that cottage, cabin and chalet owners should budget for.
- Taxes – there is just no escaping property taxes, even at the cottage. Your local municipality will have assessed your cottage property, and in some cases, you’ll spend more on property taxes for your cottage than you do for your home.
- Utilities – depending on your cottage and if you use it year-round, your utility bills might be quite manageable. Some cottagers only pay for hydro/electricity, and most cottagers don’t pay a water bill if it’s lake water they use. However, a growing number of cottages do have Wi-fi, a landline phone, cable or streaming accounts, as well as natural gas appliances, bbq’s, hot water tanks to heat, and so on.
- Insurance – you’ll need to have insurance on your cottage to help protect yourself in cases of theft, damage, accidents, injuries, and so on. Further, make sure you have all outbuildings such as docks, boathouses, sheds, bunkies and garages listed in your policy. If you rent out your cottage, that may require additional insurance. Be sure to shop around for the best policy and rates and notify your policy holder of any changes to your cottage.
- Maintenance fees – many cottagers pay fees for such services as road access, dock or boat removal/installation, rooftop snow removal, water quality tests, septic tank maintenance and so on. As with owning a home, it’s best to have some money set aside for unexpected or emergency repairs.
- Security – if you want to have a security system installed, you’ll not only pay for that service, but it means you’ll have to leave your hydro on year-round. Alternately, you may choose to pay a local security company to do regular home inspections and make your cottage looked more ‘lived in’, or better yet, ask a neighbour to help out.
- Tools & toys – those boats, water skis, kayaks, ATVs, fishing gear, and whatever else you fancy can naturally get very expensive! Don’t forget that you’ll likely need a set of tools at the cottage, as well as indoor and outdoor furnishings, bedding, and more. The good news is that many of these items can be bought second-hand, so take the time to shop wisely.
- Entertainment – if you plan on hosting people each summer, the costs for food, drinks, laundry and more can really add up. Be sure to delegate meals and BYOB options for guests so you keep on track with your spending.
Cottages or other recreational properties are wonderful to own, as long as you don’t get too far in over your head financially. While the cottage itself and monthly mortgage payments may be within your budget, sometimes those seemingly little additional expenses can add up quickly and put you way off course. If you’re thinking of buying a cottage, connect with me today; let’s talk about your financial goals and crunch some numbers. As an accredited, award-winning mortgage broker, I’m well versed in the world of mortgages and property purchases. Connect today and let’s get started: 705-315-0516.