When you think of cottage life, visions of family fun with the kids and grandkids paying visits, boating adventures and laid-back days of peace and renewal spring to mind. Those visions and the current low mortgage rates may have you actively considering a cottage purchase.
But your cottage could end up costing much more than the initial purchase price. So before you make your cottage commitment, consider this list of extras that may turn your cottage dream into a financial nightmare.
• Surveyor fees – to ensure the boundaries of the land are as the vendor reported them.
• Ground percolation test fees – to ensure the flow of waste water can be effectively absorbed by the septic field given the number of people who will be regulars at your cottage.
• Legal fees – to review the title and ensure there are no outstanding liens and that rights of way (easements) that allow access to the main road or the beach will be maintained after your purchase.
• Maintenance costs – add up the annual costs of required services such as road ploughing in winter or cutting the grass when you're not there.
• Insurance – can you obtain insurance under the current building code (which comes into force with the change in ownership) or will you need to upgrade wiring, plumbing or other services?
• Cottage location – if it is near the water, are there signs of erosion because of ice in the winter or high water in the spring? Will there be future costs to rebuild or shore up the bank near your cottage? Often any dock you have will require rebuilding every few years due to winter ice damage.
• Cottage condition – if it is an older cottage, check any supporting beams – they may need replacing. Look for evidence that the foundation may have moved – an angled roof, cracks at the corners of doors or in closets. Do the walls need to be insulated? Does the septic tank need to be replaced? Does the roof need reshingling? If so, check community by-laws – they may require replacement with expensive cedar shingles rather than asphalt shingles. Will the (gas, wood, propane) furnace need replacing?
• Infestations – are there signs of insects – ants, termites or wasps – or mice that will add exterminator costs?
• Nearby trees and brush – will you need to clear a larger area to act as an adequate fire break?
• Will you need a larger vehicle to transport supplies to your cottage? How much of your life will be spent driving back and forth to the cottage?
• And, of course, property taxes.
A cottage may be just the ticket for you – but there is plenty to consider.
Melanie Hall-Szyszkiewicz is an elder planning counsellor and division director of Investors Group Financial Services in Kelowna, B.C.
