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5 Things That May Prevent You From Buying A Cottage

5 Things That May Prevent You From Buying A Cottage

Buying a cottage is the dream for many but have you asked yourself if you have considered all the problems that can occur and lead to outstanding bills and potential liability? If you think you’ve got a handle on it, that’s great, but if you have any hesitation. I want you to listen up because I’m going to explain 5 things that may prevent you from buying a cottage near Lake Huron that can save you money down the road and keep you happily vacationing for years to come. 

Read to the end to hear my last tip that could save you tens thousands of dollars or MORE!

#5 - TAXES

The good old tax man, everyone’s favourite topic. If you have very clear intentions on keeping this cottage for a long time or plan to make it your forever home, this won’t be as important to you. If you plan to have the cottage as your secondary resilience and not your primary and plan to sell it down the road sometime this will be key for you. Not living permanently at your new cottage may cause it to be classified as an investment property and become eligible for capital gains taxes if you decide to sell it.  Your best move is to discuss your adventures with a qualified tax professional before making a major decision you may regret later. 

#2 - INSURANCE

I have shown countless cottage properties around Huron County that are insured, but I have a hard time understanding how at times. Because we live in a snow belt, many cottages can sit empty for long periods of time which can results in higher insurance costs. Mainly because its a risk the insurance company takes knowing there’s no one there to provide upkeep or make urgent repairs. Currently you will also find that there are either brand new million dollar plus cottages for sale or cottages that need some good old TLC to bring them back to life.  Many having outdated electrical and plumbing, non WETT certified woodstoves, flood issues or a major issue ill get to later in this blog.   On top of that, if you plan to use it as a rental, you’ll definitely want to talk to an insurance broker about coverage for that.

5 Things That May Prevent You From Buying A Cottage

#3 - ACCESS

You found a beautiful spot overlooking some of the best sunsets Ontario can provide but you cant get to it. 

When shopping for a cottage, one of your top questions you should be asking is how is the cottage accessed?

Is the road open year round, does the municipality maintain it and if they don’t, who does and who pays for that? Something else that can come up is when the road is located on an adjacent lot, which can cause further problems and expenses down the road if that land owner charges you fees to “maintain” the road on their lot or even worse, try and restrict access to specific times of the year.  That doesn’t come up often around Lake Huron, but its important to acknowledge the possibility and how to understand the risks.

To piggy back off of my last tip of insurance.  Insurance companies won’t like a cottage situated on a road that is not maintained or closed in the winter, as this makes it hard to access for repairs, upkeep and liability.

For more information you should consider around the access to your property check out this blog on the Pros and Cons of buying a cottage near Lake Huron.

5 Things That May Prevent You From Buying A Cottage

#4 - RENTABILITY

Cottages are wonderful for enjoying lasting memories with your family and friends. But it would be silly to not consider the possibility of making some extra income from your newest investment to offset your mortgage.  This is all great thinking, but it does require a lot of homework. 

Specifically to Huron County, the municipality of Bluewater did start enforcing new rules around short term rentals that are so new that even us agents will have to work through the kinks.  All short term rentals in Bluewater defined as livable spaces rented less than 30 consecutive days must be licensed. The license is valid for one year, has location restrictions such as The percentage of properties on a street must not exceed 15 percent and properties must not be adjacent to a property running as a valid short term rental. Along with that you have to own the property before you can apply for the license but at this time it’s very difficult for us to find the information of the 15% street rate or adjacent properties.

So how do you confidently offer on a property strictly with the intent to rent it out?  There are conditions we can insert into your offer to allow us to do our best due diligence before you firm up.  But that’s not to say that we can find solid answers before your conditional period may expire.

If you plan to buy a cottage to rent, consider talking to a realtor and or the municipality first to understand the local bylaws that may affect your intended use of the property.

#5 - EROSION

My most important factor you need to consider that May Prevent You From Buying A Cottage near Lake Huron is erosion. I was very conservative when I said this last tip can save you tens of thousands of dollars because realistically this last warning could save you well over $100,000+++, your safety and your cottage falling into the lake.

Erosion is a natural process that is necessary to the ecology of the shoreline. Without it, we can kiss our beaches goodbye.

So what do you need to know about it?

The first thing is to understand where the worst erosion is happening along the Lake.  With that knowledge you can decide where your preferred area of purchase is and if you would prefer lakefront or to take a safer option of a few roads back while still having beach access. There are ways to help slow erosion down such as barrier walls that can cost well over 100K and clues to watch out for to know if erosion is affecting your property. But at the end of the day, Mother nature is going to win no matter how protected you think you are. So this is the most important factor to consider and something that unfortunately will never go away. Some evidence shows it can be more beneficial and cost effective to move the home away from the water than to try and reduce the erosion at your property. That comes with its own expenses and headaches, as you most likely bought a lakefront property, for the LAKEFRONT. 

If you’re looking for a lot more in depth information about this feel free to check THIS PAGE where I have helpful links to the local conservation authorities and 100 year erosion maps you can look at. 

I would also be happy to help you discover where to find the best cottage that’s right for your family’s needs.

If you’re still wondering if buying a cottage is the right investment for you, consider taking my free quiz, CLICK THE PHOTO ABOVE.

- MEGAN PROPER

Buying a cottage is the dream for many but have you asked yourself if you have considered all the problems that can occur and lead to outstanding bills and potential liability?

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