Tips for Buying a Cottage in Ontario

Many Canadians dream of having a cottage, summer home, lake house, cabin in the woods, or waterfront property. A place to get away with their family and friends to relax from the hustle and bustle of everyday life. 

Purchasing a cottage is a big decision, not just financially. Many memories with your loved ones are made here, so you must find the right cottage that best suits your needs and desires. There are so many things to think about! But not to worry. Our expert insurance brokers have summarized what they feel are the most critical steps in buying a cottage in Ontario to help make the process smooth and to ensure you have the best getaway for your specific needs.

1. Define Your Goals

A goal is fundamental when making any significant decision in life, and we all agree that buying a cottage is a big decision. But one person's goals may be very different from another's. Typically, people buy cottages for one of the following reasons. They want to:

Leave the City For A Weekend, And The Summer

The thought of relaxing on a lakefront property on a long weekend or heading to a beach with the family has almost become the stereotypical getaway in Ontario. With the option of either sole or shared ownership of a property, many options are available for all income brackets to buy a cottage. 

Earn An Income From Owning Real Estate

Earning a secondary income through renting a property online or to friends and family has become popular in the past few years. If you find the right property in a popular vacation area, your property may be booked solid months in advance. 

Preparing For Retirement

Buying a cottage to use once you retire is a wise investment as you could earn an income before using it and lock in prices to avoid inflation later.

Whether it's a vacation property, earning an income or preparing for the future, buying a cottage is a big decision that must be carefully considered. This will impact not only your finances but also your insurance and your time. It is vital to complete as much research as possible before signing the dotted line. 

2. Define Your Needs

Are you a family of four looking for a place to take the kids in the summer, or are you a newlywed couple looking for quiet in the forest? Both groups have very different needs, and you must know your needs now and in the future before buying a cottage.    

Cottage prices vary substantially throughout Ontario depending on many factors. You may get more for your dollar in some regions; however, the amenities you want may differ from your preference. Doing homework on your preferred size, location, and amenities, before buying a cottage is vital.

Size

Today's version of a cottage is vastly different from 20 years ago. From a cabin in the woods to a 4,000+ sqft home on the waterfront, these are two very different properties, and understanding the positives and negatives is essential.

But remember that the size of the cottage you envision may include some extra work. The 4,000+ sqft home on the lake may look beautiful, but have you considered that it may have more grass to mow, more gutters to clean leaves out of, and higher heating and cooling costs?

This is even more important if you rent the property out. If you have a large property, your rent price may be higher than other cottages. This may lead to a smaller list of potential renters and possibly the wrong type of renter, such as a partying crowd looking for a rowdy getaway with friends. 

Understanding your size needs is crucial as it is something that, while it can be adjusted later with the addition of extra funds, is something that is usually finalized on purchase. One thing to remember about cottage size is your needs, which may change in a few years. This is especially true if you know family and friends will use the cottage frequently as new additions to a family, such as significant others and children, may strain how many people can stay at once.

Location

This is one of, if not the most significant, decisions you must make when buying a cottage. Location will dictate the area of Ontario where you will begin your search, which may also increase the cost of buying a cottage.

In most of Ontario, waterfront cottages come at a premium. With that also comes extra costs and concerns. Suppose you're looking for a waterfront property. In that case, we assume you will take advantage of the location and want to purchase items such as boats, canoes, lifejackets and other water toys. You will also want to investigate the water around your property before buying these items. 

• How deep is the water, and how much does the depth usually fluctuate during the year?
• Is the water deep enough for docking your boat?
• Is shoreline erosion a concern?
• If you are a boater, is there a marina nearby?
• Does the lake or river permit motorized watercraft?
• Are boathouses permitted on the lake? 

The answers to these questions will be necessary for anyone looking for that waterfront property. 

Suppose you're in the market for a more secluded area, away from the general population; this comes at its own risk and benefits. The lack of noise from neighbours and watercraft is a great benefit, but you should also be concerned with the following:

• Is there a year-round garbage pickup?
• Are there services such as grocery stores and other amenities close by?
• How far are you from emergency services?
• What type of wildlife is in the area?
• Would an island meet your needs?

In the case of an island, it can be more private, but buying a cottage on an island does have its own considerations. First, access is limited to months when the water is navigable. This also means that all items must be brought to your cottage by boat - groceries, furniture, renovation items, and more. Also, garbage needs to be taken out by you or a service hired if one is available. If these are non-issues for you, buying a cottage on an island could be right for you.

Whether you want to be surrounded by Northern Pine trees or have a lake as your neighbour, the research done before you begin looking will save you headaches down the road.

Features

Once you pick a location and size, an important choice begins by figuring out what features your new cottage needs to make you feel content and relaxed. This decision doesn't mean the cottage I'm buying has a hot tub or granite counters. It also means some overlooked basics:

• Age of the cottage, size, condition
• Number of bedrooms and bathrooms
• Age and state of items such as the roof, electrical and plumbing services, septic services
• Water supply - municipal, lake, or well?
• Is the cottage water treated?
• Is there a generator, and the age of it
• Extras such as an outdoor shower or hot tub
• Property management and equipment such as a lawnmower or hiring property management services

3. Determine Year-Round Cost and Maintenance Requirements

Buying a cottage or any type of property means paying for the initial purchase but will also require year-round maintenance requirements that will likely cost additional money. Knowing what future costs could be on the horizon will allow you to plan ahead.

Insurance

Buying a cottage is a significant financial and emotional investment, so having the right cottage insurance makes sense. The key is to work with an expert insurance broker who knows cottage insurance, provides options, explains different coverages, answers all your questions, and helps you manage your insurance costs with insurance discounts. The expert insurance brokers at Morison Insurance will be able to explain all of the details you will need to know before you begin buying your cottage. Some common perils that are included in your insurance would be:

• Property damage in case of fire, water damage, smoke, and vandalism
• Theft
• Contents
• Outbuildings and Landscaping

You may also want to consider specialty coverage if you are to own any of these high-value items:

• Boat Insurance
• Seadoo Insurance
• ATV Insurance

Cottage insurance has some exclusions, such as mechanical breakdown and wear & tear. In some cases, additional insurance can be purchased to cover perils such as sewer or septic backup and damage by animals such as raccoons and rodents. The goal is to have insurance covering the perils you want protection from. Our Morison Insurance brokers insure cottages across Ontario and have the knowledge and expertise to help you get the cottage insurance you want at a competitive price. 

Property Taxes

Property taxes can be a significant annual cost when you own a cottage. Be sure you know the property taxes before buying a cottage. It would be best if you also looked into what kinds of tax increases the municipal government in the area has introduced in the recent past. While these will not firmly determine future rate increases, they may provide some perspective. 

Drinking Water

Some cottages draw water from the lake, while others may receive it from a well. Water may also be drawn from a cistern. Make a point of knowing where the cottage's water comes from. Cistern water will have to be purchased if the cistern is not fed rainwater or if there needs to be more rainwater to meet your needs.

Beyond this, consider if the cottage's water is filtered or treated by a UV light. The cost of these systems is also something to consider if you want to install them.

Garbage

Garbage is a reality of cottage life; garbage adds up quickly if you have a large family or many guests. Look into the municipal garbage service at a cottage before you buy. In some cases, municipal garbage collection is year-round. In some areas, however, garbage collection at your driveway may be available from the May long weekend to October. After that, you may have to take their garbage to the end of a common road for pickup or take it to a transfer station on your own. It's a good idea to know where the nearest transfer station is in case you need to use it. Some transfer stations have depots for wine and beer bottle collections, hazardous waste collection days, and areas to drop the brush and larger items for disposal. Some transfer stations also have reuse centres where cottagers can donate or acquire items. 

Maintenance

Suppose you are handy and enjoy doing your own maintenance. You can save a bundle by doing your own interior and exterior upkeep. However, if you need to hire others to help with these tasks, this is another budget consideration. Lawn cutting, raking leaves, planting flowers, trimming trees, and other outdoor tasks can work you decide to do yourself. There will also be eavestroughs to clean, painting, window cleaning, and other maintenance.

Heating, Hydro and Other Utilities

Heating, hydro, water, internet and more are a reality no matter where you live. Online sources, such as cost calculators, can help you determine expected costs. Your real estate agent can also ask the seller about previous costs to heat and power a cottage.

4. Work with A Real Estate Agent 

A real estate agent can be a valuable resource in your hunt to fund a suitable cottage. Once you have determined the general area in Ontario where you would like to buy a cottage, working with a local real estate agent who knows the real estate market is a good idea. Agents know the communities, prices, values, and much more. Make sure to look for an agent with a strong reputation and experience purchasing in the area. Online reviews can provide great insight when looking for a real estate agent who is right for you.

The right agent can help you find the property that is perfect for you. They will want to know what type of place you are looking for, your budget, your timeframe for purchase, and more. An agent will provide you with a list of available properties, waterfront properties, or any type, and you can browse cottages often by price, location, and other filters.

5. Get Pre-Approved for A Mortgage

Getting pre-approved for a cottage mortgage can save you time finding the perfect place. With a pre-approved mortgage, you will better know how much you can afford to spend, and when the right place comes along, you will be ready to make an offer. Contact mortgage brokers to compare mortgage rates and ensure you get the best deal.

6. Don't Skip an Inspection

An inspection can provide valuable information before buying a cottage. Home inspectors can provide details on the structural integrity of premises to the condition of heating and air conditioning systems. Contact an inspector with a good reputation. Getting a referral from a family member or friend or checking online reviews can be helpful.

7. Have Fun!

It seems a shame to leave this message to the end, but it's one of the most important. Your cottage should be a place to have fun. After so much time and energy buying a cottage, it's time to relax in your happy place. We hope you enjoy your dream cottage - your heart's desire. Enjoy and have fun!