old fishing camp

Is A Cottage An Investment?


Cottage Investment

I just read an interesting article on MSN by Deirdre McMurty called Why A Cottage Isn’t A Good Investment

Ms McMurty lists 12 reasons supporting her post that buying a cottage isn’t a good investment strategy. I don’t disagree with her at all.
old fishing camp
Cottages are not and should not be purchased as an investment anymore than you should buy a motorhome as an investment….it isn’t. For one thing, most folks who get into the cottage life, well they really don’t intend to sell their cottage at anytime.

Yes there are those who buy a cottage or lakefront lot with the intention of selling it in the near future for a profit and that is probably profitable.

Let’s face it, lakefront property or cottage property in general, is in limited supply, there is only so much of it to go around. Especially reasonably close to urban centres. For those folks buying a cottage might be OK.
But most of us don’t get into cottages for investments, or for a short term, we get into the lifestyle. Getting away each weekend to the camp becomes an obsession, for the most part an enjoyable obsession.

Is A Cottage An Investment?

It’s not something we do for a year or two then sell the place and move on, although there are some who do. For the most part I believe those are folks who chose wrongly in the first place.

Cottages that are only accessible by boat for example, or camps that are way back in the woods have a certain allure and appeal but the reality is often quite a bit different.

Around here, those types of cottages and camps are often up for sale as the owners come to the realization that it isn’t for them after all. The worst of that is, sometimes they can be difficult to sell because not everyone is looking for that type of summer retreat.

Don’t Call A Cottage An Investment

Deirdre makes the point and I agree wholeheartedly that you shouldn’t call your cottage an investment, or convince yourself that going into debt to own it is OK because it is an investment.

As I said earlier a cottage is no more an investment than a boat or motorhome is an investment. They are toys, lifestyle choices. Yes, a summer home might actually appreciate overtime but in all likelihood you are not going to sell it anyway.

Most of the cottagers around here wouldn’t part with their cottages for anything short of kings ransom, and some, like me, probably wouldn’t even sell for that.

Would You Sell Your Cottage?

With that in mind, it’s not an investment because an investment usually means that at some point it gets sold or converted into cash. That doesn’t happen with a lot of camps and cottages. Many of them end up being passed on to the next generation in the same family.

Even with that there are all kinds of legal and financial pratfalls to owning a cottage or summer home. Cottage owners have lots of repair bills, maintenance and upkeep costs, insurance costs, not to mention you essentially need two of everything.

If you have a house and a cottage, you need two fridges and stoves for example. That means, in addition to the cost of the fridge and stove you have two power bills, for house and cottage, two property tax bills.

And finally, not to sound too conspiracy driven, but there is a movement afoot, very quietly in all levels of government that would love to see us all rounded up and kept in one place like cities.

Rural folk are a bit of a problem these days in terms of costs to government for medical services, hospitals, roads and infrastructure as basic as garbage collection.

Don’t think for a moment that there are not people in powerful places who dream of having us all in located in town, regardless of what they say publicly. Why do you think that officials are often very supportive of developers who are building condos and apartment buildings in the downtown city centres and why politicians are always trying to dream up ways to “revitalize the downtown core” of whatever particular city they are in chaqrge of……

That is the mindset that you are up against and why cottages and rural homes are becoming more expensive and more difficult to keep and maintain.

And it’s not just politicians, it’s utility companies, television and internet providers and the like, providing service to smaller populations, spread out over rural areas is just not cost effective for most of them.

Insurance companies are particularly touchy about cottages and camps, because insurance companies want your money but they really don’t want any risk. Cottages and camps come with risk, especially in these days of floods, wildfires, hurricanes and of course burglaries and other vandalism that cottages are susceptible to experiencing.

And these days, it’s all about cost effectiveness…..

Check out Deirdre McMurty’s post here: Why A Cottage Isn’t A Good Investment

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