Cottage Buying Guide

19 March 2011 About The Finances

Cottage on an Island
Buying the perfect summer cottage, cabin or lakeside chalet requires research and patience.
Here are some great tips on how to find and purchase the ideal cottage for your family.

Cottage Buying Guide

Many people often buy a cottage on impulse. How does this happen? They visit friends for a weekend, decide they really enjoy the cottager experience and rush to acquire the first property they see in the same area.

While it is easy to get caught up in the excitement, and the impulse decisions sometimes work out, the smarter way to buy a cottage is to step back and consider all the factors that are involved. In the long run, you will be much happier and more comfortable in your little cabin on the lake.

What are the things you should do before you buy a cottage?

Rent a cottage in the area for a couple of summers at different times in the season.  Boat traffic, water levels and heavy rain all have important impacts on a property.

If you plan to buy a remote-access cottage that is off the grid, make sure you rent one first to see if it really does suit you and your family. The idea of a secluded cabin sounds great, but it comes with a variety of extra issues that require some careful consideration.

Talk to the neighbours around the cottage you want to buy. Every lake has its own feel. Make sure the social scene fits your personality and your family’s expectations.

Consider hiring a real estate agent who owns a property in the same area.  Even if a cottage that interests you is being sold privately by the owner, it is often worth having an expert adviser.

Cottage Finances

The financial part of buying and maintaining a cottage is the number one area that gets people into trouble.

Get a mortgage approval done before you start looking.  It keeps you focused on your price range and provides the opportunity to move quickly when the perfect cottage becomes available.

Make an annual budget for all the following cottage expenses:

Talk to your existing homeowner insurance company to get an estimate for what you will pay to add the cottage to your policy.

Property Taxes
These costs can be substantial when the property lies within the nearest town’s school district zone.  Unless the cottage is located in an unorganized township, prepare for a nasty tax surprise.

Electricity, phone, Internet, generator fuel, and propane costs all need to be considered. Most cabins have a wood stove to provide heat, but many cottages also have electric baseboard heaters which can be very expensive to operate.

Boat Motor Fuel
Don’t underestimate this significant cost.  Operating a boat is very expensive and the fuel costs for running around the lake all weekend can blow your budget right out of the water, especially if you plan to do a lot of skiing, wake boarding, or full-day cruises.

Parking And Docking
Water access properties require a place to leave the car while you are at the cabin, and a place to leave the boat when you are in the city.  Check with the existing owners to find out what they pay.  Don’t forget to factor in your winter storage costs for the boat.

Commuting Costs
Budgeting for fuel costs and extra wear and tear on the family vehicle requires a reasonable guess of both the number of times you will commute to the cottage, and the average price of gas.  It is better to be conservative and budget on the high side for these costs.

Food And Drink
Managing these costs takes some serious discipline.  A few extra bottles of wine along with your favourite high quality steaks will drive you way over budget in no time. Entertaining family and friends can also be expensive, and may quickly double or triple your normal weekend expenses.

Maintenance And Repairs
Unless you are buying a brand new cottage, be prepared for significant annual outlays. Spending $5,000 to $10,000 a year is common for even modest cottage properties. A harsh winter takes its toll on the dock and cottage roof, while mischievous critters regularly break through screens and chew through floors and walls.
Chainsaws, lawnmowers, and water pumps all require annual maintenance.

Rental Income
Are you planning to rent the cottage to other people for part of the season?  If so, be conservative about your net income estimates.  The extra costs associated with finding renters and cleaning up after they leave will eat into the additional cash.

Remember: A cottage can be a money pit.  Don’t underestimate the annual expenses.

Creating Your Cottage Wish List

Once you have a solid financial plan for buying your cottage, it is time to sit down and decide exactly what you want your summer property to be.

Be both specific and realistic. This will help you narrow down your options and allow you to spend your time looking at cottages that come the closest to meeting your expectations.

Here are some of the key things to consider when you plan to buy a cottage.

  • Road access, water access, and winter access.
  • With electricity or off the grid.
  • Phone and Internet or smoke signals.
  • Turn-key (ready to move in), buildings only, or land only.
  • Isolated or part of a community.
  • Distance from home. Are you comfortable with a half-day or full-day commute?
  • Shoreline has deep water, is shallow and rocky, or shallow and sandy.
  • Property that is heavily wooded or cleared.
  • Lot size is small, medium, or a private estate.
  • Waterfront on a big lake, small lake, river, or private lake.
  • Toilet requirement is an outhouse, compost toilet or septic system.
  • Water supply is lake water, well water, municipal water, or rain barrels.
  • Shower is indoor, outdoor, or singing in the rain.
  • Bedrooms are all in one cottage, or cottage plus a guest cabin.

Once your wish list is complete it is time to consider the physical characteristics of the property.

Land Composition

  • Sand property has good rain drainage and is stable for foundation posts. It also has higher erosion risks.
  • Clay drains poorly and a cottage can be at risk of shifting foundation posts after the winter thaw.  A yard is possible if you get enough topsoil.
  • Bedrock can have water drainage concerns, but is solid for anchoring the foundation posts.


  • Some properties are privately owned to the high water mark but most have a road allowance that is owned by the local municipality.
  • Most shorelines are protected and unalterable.  Check if you plan to modify it.
  • No right of ways, right of ways deeded to other people on the property, or deeded to you on a neighbour’s property.

Property Slope

  • Level property makes it easy to carry stuff to and from the dock.  It has more usable land for recreation or outbuildings, but may have water-logged low areas.
  • Medium sloping land may have rain run-off concerns and is more difficult to get stuff to and from the dock.
  • Steep property has good views of the lake, little usable land for a yard, and is very difficult to climb and descend when you need to get stuff to and from the dock.  Steps are required and they may be difficult for people in poor health.

Cottage Ownership Structures

Once you have chosen a cottage you like, get all the information about the existing ownership structure of the property.

  • Single owner, joint owners, co-owners, or corporation – make sure everyone is on board.
  • Land claims can be a problem.  Check for ongoing First Nations land claims against the property.
  • Surface rights, mineral rights, and logging rights are all possibilities.  Most properties only come with surface rights.
  • Research the property and the surrounding area for recent mining claims and planned logging activity.

Water Quality, Building Structure and Sanitation

Before you take the plunge and buy your dream cottage, take the time to inspect these critical aspects.  Skipping them may quickly turn your cottage dream into a nightmare.

Water Quality
Get the water supply tested for pollutants.  It is worth the cost.

Septic System
Check the age of the septic system and look for wet spots on the property with extra healthy grass around them.  There may be leaks.

Check for shingle damage on the roof.  Try to actually climb up and look closely.  Inside the cottage, do a meticulous inspection for evidence of water damage.

Check the support posts and cement pads for settling along with disconnected cross braces under the cabin.  If the cottage is not structurally sound, stay away.

Decks And Docks
Check for rotten boards, raised nails, and overall condition and stability.  A new deck or dock is a very expensive project.

Wood Stove Chimney Stack
Inspect the pipes for rust.  If the cottage has been empty for a long time, make sure the chimney stack is not blocked.

Check the attic for evidence of bat colonies, mice, and raccoons.

Best Time To Buy

When is the best time to buy a cottage?
The fall and winter are generally the best time of year to get a good deal on a cottage. Many cottage sellers will set unrealistic prices in the spring. If the property doesn’t sell during the summer months, the owners become more willing to negotiate in the fall or the winter.

To buy the cottage or cabin you have always dreamed of, be patient and wait for the right place at the right price.  The process will test your resolve, but you will be rewarded in the end.

Need more Cottage Real Estate Tips?
Go to the Selling Tips page.
Go to the Tips For Renting Out The Cottage page.
Go to the Tips For Renting A Cottage page.