Thinking about Buying a Cottage or Vacation Home?

Buying a cottage or vacation home for you and your family can be one of the best decisions you make, but it could also cause you the most headaches if you don’t give it lots of thought first.

When you are considering buying a cottage, your first decision must be whether you intend to buy this only for your personal use, or if you intend to possibly use it as an investment, renting it out when you and your family are not using it. This initial decision will help you decide where you want to buy. If you intend to rent it, you will want one near popular areas, with close proximity to amenities. If you intend it for your sole use, you are free to locate exactly where you want to be, even if that if the middle of nowhere.
Also, when buying for your own use, consider your lifestyle, will you be having lots of visitors? Will you entertain frequently? Do you have certain activities you want to be close to? These are just a few of the things to consider before you jump into buying.

When you start to look at properties, don’t get carried away by all that is available. Make sure you set a budget, and stick to it. Just because you have the down payment doesn’t mean you want to pay the mortgage costs. You want to enjoy this vacation property, not worry about what it’s costing you. You might even consider a family property. Maybe you have brothers/sisters or friends who would like to pool resources and buy a vacation home. If you decide to go this route, keep in mind that the amenities you are looking for will change if you are all at the cottage at the same time.

Another consideration is where do you want to buy. Consider how far and how long you want to travel to reach your property. Consider how long you will be staying at your property, and is it worth the time to get there if it’s just for weekends.

When you have decided where you want to locate, decide if you are looking for a house or if a condo would better meet your needs. If you are looking to get away from it all and have no maintenance to worry about, a condo might be your best choice. If you are buying this property for investment purposes, be sure if you chose a condo that you are permitted to rent the unit. (you should check the rules for any other restrictions that might affect your enjoyment or that of your tenants).

Before you buy, be sure you are buying a vacation property for the right reasons. Don’t buy on impulse. Just because you are enjoying a vacation at someone else’s cottage does not mean it is the right decision for you. Think it through carefully. This could be a large investment, and the real estate market can be fickle, especially with vacation homes. The market is not the same year round, or even year to year.

When you decide a vacation home is the right purchase for you, talk to your banker, and your real estate professional. Get some good advice on what is available, and also on how to finance your purchase to your best advantage.

If you have any experiences you would like to share, please add your comments below!


Over the years many people have asked me if owning an income property was a good investment. My response, “Of course it is a good investment, provided the buyer does there due diligence and they are the right person for the job.”

Let me explain what I mean. There are many different types of investment properties, from single family homes to multiple units or even a mixed use situation (commercial and residential combined in one building.) Some investors prefer the single family home like a townhouse condominium because the exterior maintenance of the property such as landscaping and snow removal is taken care of by the condominium corporation. Plus they have only one tenant to deal with.

First time home buyers often consider purchasing a two family home because the income from the second unit will help supplement the mortgage payment.

Other investors may prefer a multi-residential building with several units. These are usually more involved as you have several tenants to deal with, all with their different issues. These investors may hire a property management firm to look after the tenants and maintenance issues but remember, this expense reduces the amount of return on your investment.

Some investors think they can just purchase any property and turn it into an income property. This is not the case. Investors should always be aware of all municipal zoning and by-laws affecting income properties such as how many units are allowed in a building, required amount of parking available for tenants, fire retro-fit requirements, and this list goes on. It is not just a matter of adding extra kitchens and bathrooms to increase the number of rental units.

Another consideration for real estate investors is the financing requirements. The amount of down payment varies depending on the property and whether it is owner occupied. I always recommend the investor should work closely with a good mortgage broker who specializes in financing for investment properties.

To sum it all up, investing in residential income properties can be very financially rewarding over the long haul, but you need to do your homework and have a good understanding of the requirements and level of commitment required to be a landlord. Most of all, be sure to use the services of a professional REALTOR® who has experience in in selling income properties.

Should I Rent or Should I Buy?

When is the right time to buy and when is the right time to rent?

As a REALTOR® I would like to be able to say that a person should always buy a home instead of rent. Sadly that is not always the case. A variety of circumstances could suggest that renting is the right route to go. Here are a few:

 If you are unsure you will be staying in the area for a reasonable period of time – Sometimes people are excited by the opportunities available to buy but don’t consider that they will likely be moving in a short period of time. Perhaps a job transfer is looming, or maybe a marriage with plans to relocate to your new spouse’s hometown is on the near future.  Real estate like any investment has costs involved, and if you are purchasing a home with a minimal down payment, when the time comes to sell you may not have had time to build up enough equity to pay all the selling expenses.

If you have a personal bankruptcy on your credit history that has not been discharged for a number of years – lenders will lend to individuals who have declared bankruptcy, but only after the individual has shown that they have their financial picture back on track for an extended period of time.

 If you are really stretching it to get your down payment and closing costs together – the dream of owning your own home can sometimes overshadow your other dreams. When you are deciding if the time is right to buy a home, consider your other dreams.  Do you want to buy a new car? Do you enjoy going on vacations?  Do you like to go out frequently for meals and entertainment?  I am not saying you can’t do these things and buy a home, but don’t get yourself so committed to mortgage payments that you do not have money left over for the day to day things you enjoy.

Some of the advantages to buying as opposed to renting are:

You are building up equity in your property every time you make a mortgage payment. Part of each payment is applied to paying off the original amount you borrowed, with the idea that at the end of the amortization period of your mortgage you would owe nothing against your home.  This is just a concept, since as a REALTOR® I hope you will move a number of times over the common 25 years amortization period.

As a long term investment, real estate has been shown to be one of the best ways to increase your investment capital. Like most investments, ones that you buy, maintain, and hold for a long period bring you the highest return on investment.  Home ownership has enabled many families over time to keep investing in more expensive homes, utilizing only their initial down payment from their first home purchase. Remember, your personal residence does not attract any capitals gains tax when it is sold, unlike many other forms of investment.

Another perhaps less apparent benefit of home ownership is that studies have shown that the children of families that own homes are more likely to complete higher levels of education, more likely to vote in our federal elections, and more likely to continue the tradition of home ownership.

These are just a few of the things to consider when deciding if homeownership is the right choice for you right now.

If you are trying to decide if this is the right time for you to get into home ownership, I encourage you to call one of our sales representatives.  They are all qualified to sit down with you and review your current circumstances. They will help you decide on your best course of action, and yes, they will sometimes tell you that renting is the right choice for you right now.  But, they will also help you work out a plan to become a home owner, maybe not this month, but at some time in the near future.  Don’t hesitate to ask for information, that’s just one of the ways in which REALTORS®  help.