What to think about before buying a cottage

Dreaming of relaxing and spending quality time alone or with loved ones in a beautiful forest, mountain or lakeside cottage? Is the idea of having your own second home looking more and more attractive? Do you have enough savings to buy a cottage? Before you get started, there are a few things to think about.

Four things to do before you buy a cottage

Buying a cottage is a big expense. Make sure you’re making the right decision before jumping in with both feet! Here are our four tips for creating the best conditions for purchasing a second home.

1. Identify your needs

Why do you want to buy a cottage? What are the reasons behind this goal? Identifying your needs will make your search more real and help you evaluate the properties available on the market.

Let your dreams mature a little bit before making an impulse buy. On your own, as a couple or as a family, take the time to answer a few key questions to identify your needs. For example, do you want to:

• Be able to access your cottage quickly and easily? How far are you willing to drive to get there and on what kinds of roads?
• Go to your cottage frequently or just once in a while?
• Have a large property? Wooded or cleared? On a mountain or with waterfront access?
• Buy a year-round cottage?
• Work from the cottage? Will the internet be strong enough?
• Renovate a fixer-upper or buy a cottage that’s move-in ready?
• Invest in maintaining the building or the grounds? Whether you do or not, how do you plan to handle maintenance?

You’ll need to decide what you need in terms of:

• Size
• Location
• The number of bedrooms
• Equipment and utilities
• Accessibility
• Aesthetics
• Use

What is the best location for a cottage?

Well… it depends on what your ideal nature getaway looks like! Whatever your dream is, location is a very important consideration when buying a cottage. Proximity to a grocery store, pharmacy, beaches, lakes for fishing, tourism attractions, municipal facilities or other services may be very important for your needs.

2. Determine the costs related to buying a second property

Just like buying a house, there are many expenses that add up when buying a cottage. Pro tip: make a budget!

To analyze this new financial responsibility, you’ll need to take into consideration:

• The down payment
• Inspections (pre-purchase, water infiltration, septic system…)
• Land transfer tax
• Appraisal fees
• Legal fees
• Life insurance or mortgage insurance

You’ll also need to take into consideration the fixed and non-recurring expenses you’ll be facing after you buy, such as:

• Home insurance
• Municipal and school taxes
• Electricity and heating
• Appliances and furniture
• Costs of maintenance and repairs
• Snow removal and/or groundskeeping

And more! A full evaluation of your expenses and your income is an essential step when analyzing your ability to buy a cottage.

How much does home insurance cost for a cottage?

Insurance premiums for a second home vary based on several factors. The home’s features, what you will use it for and the types of coverage you want will all have an impact on your home insurance for your cottage.

For example, if you will only be there on a seasonal or infrequent basis, your insurance agent may offer you seasonal insurance with more limited coverage. That type of coverage could be added to your current home insurance policy. On the other hand, if you think you will be going more regularly, your agent will probably recommend secondary home insurance.

In either case, the basic risks that you’ll want to protect your cottage for are:

• Fire
• Civil liability
• Contents insurance

Contents insurance covers all of the permanent contents of your cottage in case of fire, theft or vandalism. The belongings you bring with you to the cottage are covered by your home insurance for your primary residence.

Buying a shared cottage: good or bad idea?

Not sure you have the financial means to buy the cottage of your dreams? The solution: buy one as a group. This can be an ideal way to make the most of your purchase and cut costs, especially if you only want to use it once in a while. But check with your insurance company - there may be a maximum number of owners allowed!

Be careful! Buying a property as a group will come with its own set of challenges. Only purchase a cottage with people who you trust and can communicate and share with well. Also, make sure you get all agreements on paper to protect yourself in case anything goes wrong.

Renting out your cottage: good or bad idea?

We don’t recommend it! Whatever you do, you must tell your insurance company before renting out your cottage. Some insurance companies may refuse to insure you if you are renting out your cottage in the short or long term. Others may only allow it if you purchase rental property home insurance.

3. Get a full inspection of the cottage and the property

Before closing on the cottage, have an inspection done of the entire property. That way, you’ll avoid any hidden defects and make sure you’re not stuck with additional expenses.

Don’t forget to take these factors into consideration:

• The location of the cottage Is it in an area at risk of landslide or flood?
• The topography or slope of the land. Will water drain away from the foundation?
• The certificate of location. Check to make sure the building doesn’t encroach upon a protected waterfront buffer strip without having the necessary permissions.
• The water quality. Because most cottages are on wells, have the water and the system analyzed to prevent any unpleasant surprises.
• The septic systems. Are they up to code? Does the cottage have a septic tank? Is it connected to a septic drain field? What condition is the system in? What is the capacity? How old are they? Are there any known problems?
• The foundation and insulation If you want to enjoy your cottage year-round, make sure that the foundation is concrete and that there is adequate insulation. For a three-season cottage, the foundation can be on stilts or piers and filled with urethane.

4. Find out about any applicable regulations

Private lakes, co-ownerships and municipalities all have regulations that can sometimes conflict with your wants and needs. Before you dive in, find out from the municipality about:

• Lake access
• Lake water quality
• Fishing and hunting
• Swimming
• The use of motor vehicles on the lake
• Pets
• Renovations
• Neighbourhood peace and quiet

Resort cottages

Co-ownerships can be an interesting option if you can’t find an individual cottage that meets your needs. It’s the same idea as owning a condominium. That means it’s important to find out about:

• Monthly condo fees
• Co-ownership regulations
• Reserve funds
• The condition of the building and any expenses to be expected
• Who is on the board of directors
• The history of expenses and repairs

Buying a property with peace of mind

A major decision like this can come with lots of concerns as well as a lot of excitement. Before you sign an offer to purchase, carefully review the documents provided: a specific and carefully drafted offer to purchase can save you a lot of hassle. Don’t be afraid to work with a real estate broker and ask lots of questions about your future property. An ounce of prevention is worth a pound of cure!

Once the offer of purchase has been signed, all you have to do is relax and unwind in your new dream cottage! Good luck!