Buying a Cottage Today to Live in Later

09.22.21 | Buying

Buying a Cottage Today to Live in Later

Buying a home today is definitely not the same as it was 20 years ago. And as a result, younger homebuyers are getting more creative with investing their money into real estate in a way that makes sense for their lifestyle and goals. 

As prices continue to rise in the city, one trend we’re seeing gain momentum is homeowners buying a cottage rather than a house or condo while continuing to rent closer to their place of work. 

Here’s a closer look at buying a cottage now to live in full-time later…

The Real Estate Market is Different Now

As real estate market trends continue to show rising prices and high competition in the residential real estate segment, buyers are becoming a little more disenfranchised about the idea of buying a house. The simple fact is that right now, it’s harder for buyers than it is for sellers.

A lot of first-time buyers find it difficult to break into the real estate market–even though there are many programs and grants available to help them do it. 

Buying a cottage is slightly different than buying a home. 

Interesting in some other creative ways to make buying a house more affordable? Check out our blog series on secondary suites:

Buying a Cottage is Easier

There’s less competition for cottages and the price points are usually a bit lower than traditional residential homes and big-city condos. This means it’s typically easier to qualify for a lower mortgage, and you can expect fewer bidding wars and missed opportunities when you’re in the market for a cottage. 

Compared to condos and more urban homes, cottages also have a lot of added appeal above the price. Large lots, privacy, more space, and amenities like hot tubs, garages, and even private beaches or docks are all common things we see in Peterborough cottages, that you would not find in big-city houses. 

You Can Make Money From It

For many young buyers who choose to buy a cottage while still renting their primary residence, the main draw is the fact that they can rent out their cottage as a vacation rental to make some money on the weekends and during peak tourist season.

Obviously, the main benefit of this is that you can treat the cottage as an income property and offset some of the costs associated with owning and maintaining a cottage–not to mention the fun getaways you can take for yourself.

You Will Build Equity 

As you pay down the mortgage on your cottage, you will build equity that will only help to increase your position in the real estate market. But what can you do with equity? Borrow against it when the time is right and help fund your next home purchase or re-invest money back into repairs and cottage renovations to make the space more livable on a full-time basis. 

Looking for your first cottage? Here’s some content to help you out:

Some Considerations to Look Out For

If this sounds like an interesting prospect to you, there are a few things you should know first. For example, you will need to make sure your monthly budget allows for both a monthly rent payment and mortgage payments. 

As a renter, you also might not be used to paying for home repairs out of pocket, so ensure you have an emergency fund for unexpected expenses. 

Read our 4 Things to Know About Completing Cottage Renovations blog here.

Also, depending on where your primary residence is, vs. your cottage, you might have a different set of bylaws to think about. In many cases, cottage renovations and upgrades require more approval by the county, for example, if your property is situated on a waterfront. 

How to Make it Work

Whether you’re a millennial homebuyer looking for a creative way to get into the real estate market, or you’d like to get a headstart buying your retirement property, buying a cottage before buying a home is a perfectly viable option if it suits your unique needs. 

The key is working with a real estate professional who can guide you through the process and help you cross all the t’s and dot the i’s. 

Is the cottage life calling your name? Contact us today here to learn more about the benefits of buying a cottage before you buy a house.


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