Your Cottage as a Real Estate Investment: Good or Bad Idea?

Buying a cottage is a big decision that requires careful consideration. Is it a sound real estate investment? Will it appreciate with time? Could renting it out balance out the costs? The answer to all these questions will depend on various factors. For example, location, rental rules, management costs and others. However, if you choose wisely and do your research, your cottage can definitely present an interesting investment opportunity.

Your cottage as a real estate investment: appreciation

Many people invest in real estate with the hopes that they will be able to sell it for more in a few years’ time. Appreciation refers to the increase in an asset (in this case real estate) over time. Appreciation rates vary according to numerous factors: market trends, the economy, location, type of real estate, etc. In bigger cities, appreciation rates are usually higher than in rural areas. As such, cottage appreciation rates will depend greatly on location. Being close to ski slopes, city centres and other outdoor activities are definitely advantageous. For example, Mont Tremblant has seen a significant rise in real estate prices in the last year alone. Conducting a market analysis will give you a better picture of where to buy. In conclusion, location is key if you want to buy a cottage as a real estate investment.

Your cottage as a real estate investment: renting it out

Many people buy a cottage to rent it out as it can offer a nice supplementary income. However, there are certain things you should know:
  • Location: If you plan to buy a cottage as a real estate investment, once again, location is key. Waterfront properties are the most sought-after rental properties. Being close to ski centers will also influence your property’s popularity. Furthermore, being within a two-hour drive from a major city is a bonus.
  • Amenities: A fully equipped, modern cottage will generate more interest. While vacationers typically want to escape the city and be outdoors, many still want all the comforts of modern life: internet, cable television, fully equipped kitchens, cleaning service and so on.
  • Management: Renting out your cottage will require a certain level of management. You will need someone to maintain, clean, clear snow, mow the lawn, take out the trash, etc. But estates like Kanata Tremblant offer rental management services. They can do all those chores, and also the advertising of your property. You can sleep soundly knowing your cottage management is in the hands of professionals.
  • Associated costs: Renting out your cottage comes with its share of costs. Advertising your property on various websites and platforms, maintenance and repair, and, of course, insurance. Additionally, your rental income must be declared and is taxable. Luckily, many costs associated with the rental property are tax deductible. These include mortgage interest, property taxes, insurance, maintenance and upgrades, management and in some cases utility bills.
  • Rules: Before you buy to rent, make sure municipal and provincial laws allow you to rent your property. For example, in Quebec, tourist rentals (shorter than 31 days) require an official classification certificate. Owners at Kanata Tremblant are guaranteed to meet all requirements to rent their cottage.

In conclusion

Do your research and make wise choices to increase the return on your investment. Using your cottage for personal enjoyment is worth its weight in gold. However, should your situation change, knowing you can rent it out will offer you peace of mind. Hence, buying in a place like Kanata Tremblant is smart as you can enjoy their professional management services if needed. Similarly, if you want to buy a cottage for your retirement, renting it out until then can be a great way to generate income. Make sure you consider all the options before buying so you make an informed decision. To learn more about cottages for sale on Kanata’s beautiful estate, contact us today.

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