Cottages are a wonderful getaway and place to unwind, but they can also be a great investment when purchased at the right time and for the right price. As with purchasing any property, you need to have a plan, budget and clear idea of the real estate market in the area you want to invest in. If done correctly, a cottage can be a beautiful place for you and your family to enjoy as well as a sound financial investment.
What you need to consider when purchasing a cottage:
Work out the finances first – Before you find the cottage of your dreams, work with a financial mortgage broker or use online mortgage calculators to figure out exactly how much you have and are able to spend. Make sure to consider the cost of any renovations that may need to be done. Also, like any investment, ensure you can still afford to take care of your main residence and bills.
Put a want or “wish list” together – Consider what your needs and wants are in this new property. Don’t be too extravagant, and make sure to stay within your budget. Putting this list together will help ensure you love the property you end up with and don’t just settle on any place.
Find the right Real Estate Professional – Look for someone who knows the area when looking for a property. Some real estate agents specialize in cottages and have the experience to help you get the best deal. They can also recommend contractors, service providers or a property manager if you plan on eventually renting the cottage out.
Research, study and consider all options – Take your time and do your homework with this purchase. Owning a cottage is a lot different than owning a home. There are elements that need to be well-thought out beforehand, such as water, utilities, possible wildlife issues and access to the property from land or water.
Should you use a Cottage as a Future Investment or Rental?
Like your home, location plays a major role in how your cottage will increase in value over the years. Even though a rural cottage is generally thought as of ideal, being close to amenities like ski slopes, city centres or other outdoors activities can really add appreciation to the cottage. But like with buying any property, factors such as market trends, the economy and price of similar properties can all affect the overall appreciation of the cottage you choose.
Are you looking to buy an investment cottage to rent out and receive a secondary income? If so, then there are factors you need to consider before moving forward:
- Location – Again, location is the key. People who rent cottages usually want waterfront, something close to a body of water or other options for a variety of activities. Being a two hour or less drive away from a major city is a huge bonus as well.
- Management – Who will be managing the property? What amenities will you include in the rental fee (cable, internet, cleaning services etc.) and what other associated costs are involved in managing and operating the cottage?
Things to think about before investing in a cottage:
A lifestyle choice
Owning and maintaining a cottage can be expensive, but extremely rewarding. If you plan on purchasing a cottage as a getaway for your family, then get your money’s worth. Go as often as you can and enjoy your holidays there, entertain family and friends, have parties, romantic dinners and use it for any other occasions that you can think of. Make the cottage an integral part of your life.
Could you retire there?
You might not be close to retirement age, but could you envision living there in your golden years? If so, consider buying a property that would be easy to maintain all year round and as you age. Look for a cottage that supports activities like gardening, swimming and entertaining so you can get the most out of your retirement years.
Do you value the land or structure of a space more?
When contemplating what property to buy, ponder what you want most – a spacious cottage or a ton of green space. This comes down to personal preference but can play a major role in the happiness that the property gives you. Remember that land is always more valuable and difficult to modify, whereas the cottage itself could possibly be expanded or changed with renovations.