It may be hard to believe, but another summer is winding down for the year. It has been an eventful time for the real estate market, starting out with record-breaking housing prices and soaring demand that fizzled when interest rates rose. As the cooler weather approaches, the housing market in the city may pick up as we head into the traditionally busy Fall season. 

However, the busy season for cottages is coming to an end as regular life resumes. If you’ve ever thought about buying your own vacation getaway for next year, now might just be a perfect time. You’ll have less competition, more inventory to choose from, and prices have dropped. You couldn’t ask for a better combination.

The Advantages of Buying a Cottage Now

There are a few advantages to owning a cottage in addition to your primary residence. 

• First of all, you have income potential. Higher interest rates are a barrier for many people who would have otherwise bought a property. However, they still want their yearly vacations, which means they will be looking for places to rent. With websites like Airbnb and VRBO, finding tenants is easier than ever. There are even many online classified sites like Kijiji and Craigslist where you can advertise your cottage for free. A passive income stream may be the most significant benefit to buying a cottage, but it’s far from the only one. 
• If you buy during the off-season when prices are down, your equity will grow, and your purchasing power will increase. If you decide to sell a few years down the road, you can use the profits to fund a new investment or simply cash out. 
• Or you can keep the property in the family, providing generational wealth for your children and grandchildren.

Those are just the financial advantages. We haven’t even mentioned the intangible benefits of owning a cottage. Just think – you’ll have a vacation getaway anytime you want. 

When you rent, you often have to book more than a year in advance because of all the demand. When you own, you can pack up at a moment’s notice. In addition, your brand new cottage might one day be your perfect retirement home.

Is there a move in your near future? Here are some resources that can make the process easier:

• Our Top Tips For Downsizing In Toronto
• Selling Your First Home: Here’s What You Should Know
• How The Government Is Helping First-Time Buyers In 2022

How to Finance Your Cottage

Financing is often the biggest challenge you’ll face when buying a cottage. If you plan to use it as an investment property, you will need at least a 20% down payment.

You’ll need anywhere from 5 to 10% down if you plan to use the cottage for your own family. A mortgage broker can help you determine the best course of action for financing your purchase. Your options can include:

A traditional mortgage. If your credit is good and your debt load is low, you may be able to secure your financing through a conventional mortgage. The interest may be slightly higher, but you don’t need to use your current home as collateral.

Home equity loans. If you have significant equity, you can borrow against it to purchase your cottage. The advantage is the interest rate is generally lower. However, if you default on the loan, you don’t just risk losing your cottage. You could also lose your home! There are two types of home equity loans to consider:

1. Home equity line of credit. With the line of credit, you have considerable flexibility when it comes to making your payments. If cash is tight one month, you’ll simply have to cover the interest charges. Other than that, you are free to take as long as you want to pay off the loan. This flexibility comes with a price, however. The less you pay each month, the more your interest charges will add up. On the other hand, there are no prepayment penalties if you decide to pay off the loan quickly.
2. Home equity loan. Also known as a second mortgage, a home equity loan comes with regular monthly or bi-weekly payments, depending on your agreement with the bank. The payments are fixed, and the interest rate is typically lower than with a line of credit.

Summer is over, and fall has arrived. There is so much to do and see in Toronto this season!

• ​​5 Toronto Fall Activities You Don’t Want to Miss
• 5 Farmers’ Markets You Need to Visit This Fall
• The Top 5 Places to Walk Your Dog in Toronto This Fall

The Best Places to Buy a Cottage in Ontario

Once you’ve decided to take the plunge, the next question is where? Our beautiful province offers many perfect vacation destinations. Let’s take a look at just a few that are near Toronto, or only a few hours away.

Collingwood

This beautiful, affluent area lies along the Georgian Bay and provides year-round potential. In the winter, you’re close to the ski hills, the natural hot springs and the gorgeous Scenic Caves. There are fantastic hiking trails to explore in the spring and summer, and jumping off the pier at Millenium Overlook Park is a fun way to keep cool when the mercury soars. Any way you look at it, Collingwood is the perfect year-round destination!

Prince Edward County

Located between Ottawa and Toronto, Prince Edward County provides the perfect vacation spot you can find without having to get on a plane. Lake Ontario’s crisp, cool shores offer welcome relief for the hot summers. But your enjoyment isn’t limited to the warmer months. During the spring or fall, you can visit the winemakers and breweries in the villages, attend the exciting festivals and events and view the gorgeous fall colours on the scenic trails. If you invest in a winterized cottage, you’ll have a place to go anytime you want to enjoy the brisk Canadian winter. With activities like snowshoeing, cross country skiing or ice skating, you’ll look forward to the cold rather than dreading it.  

Muskoka

It’s impossible to talk about Cottage Country in Toronto without mentioning Muskoka. It’s just 2 hours north of the city, with approximately 1,600 lakes. It is so beautiful here that this popular vacation destination receives over 2 million visitors yearly.

Do you want to know more about the possibilities of buying your home away from home? Our cottage experts are happy to point you in the right direction. Reach out to us today with any questions you have.

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