06.7.22 | The Kawarthas

Is Now A Good Time To Buy A Cottage In The Kawarthas?

Cottage season is officially here, and soon, the lakes and beaches will be full of people revelling in the warm summer sun. It’s the moment many people have dreamed of all winter, relaxing outside and enjoying a cool drink as the smell of the BBQ fills the air.

If you have spent the last couple of years renting a cottage, the idea of buying might be tickling the back of your mind. Owning a cottage comes with its share of responsibilities, but the benefits cannot be denied.

There’s no more rushing to book your vacation destination before all of the spots fill up. You can rest assured that you will always have your cottage time whenever you want it and as often as you want it.

Dreaming of the Kawarthas

Imagine a peaceful, scenic place where you can swim, fish, and explore nature in the spring and summer. Then, in the winter, you can take in the beauty of a pristine snowfall while cross-country skiing, skating or snowshoeing. To top it all off, you’re surrounded by a network of vibrant communities offering fun festivals and events all year round.

You might think you have to go way up north before you can experience a paradise like this.

However, you’ll find all this and more in Kawartha Lakes, which is less than 2 hours away from Toronto. Spending time in a cottage here means letting your worries and stress fall away as you enjoy the fresh air and green space.


Why consider a cottage in the Kawarthas? There are so many reasons! Here are just a few:


Why Buy Now? 

Real estate prices rarely go down, and if they do drop, it is only for a short time. Over the long term, land value appreciates. And for the last two years, the prices of real estate have soared everywhere, all over the country. 

However, the market has shifted in the last few months, causing prices to drop considerably. 

The Pros and Cons of Buying During a Shifting Market

While we can’t exactly call it a buyer’s market, it is a better time now than at any point in the last 48 months. According to the Canadian Real Estate Association, prices in Kawartha Lakes were down 13.2% in April 2022 compared to the previous year.

What are the pros of buying as the market shifts?

  • You will pay considerably less than you would have even a few months ago.
  • The market almost always rises in the long term. You have an excellent chance of earning a significant return on your investment.
  • You will face less competition from other buyers, and more properties may be available.

Of course, buying in an uncertain market can also have its downfalls. Here are the risks you should be aware of before you take any action.

  • No one can predict what will happen with real estate prices. They could fall even further, which means you may not maximize your savings as much as you could have. 
  • Buying for the short term can be very risky. If the market falls, it may take a while before you can recoup your investment. In the meantime, you’ll have to carry the property or sell it at a loss.

The bottom line is that buying a cottage is a smart decision – if you are well prepared and doing it for the right reasons. We generally don’t recommend buying during a shifting market if you hope to sell it quickly for a profit. However, securing a vacation spot your family will enjoy for many years can be the best long-term investment you’ll ever make, for your finances and your lifestyle!

Should You Take The Leap?

Buying a cottage doesn’t just give you a home away from home whenever you want a change of scenery. It also provides you with a solid investment and potential income opportunity that you can capitalize on now and in the future.

  • Many people are buying a cottage now with the intention of living there later.
  • Others buy now to sell later and use the profits to fund their retirement years. 
  • Some investors seek to create immediate passive income by renting their cottage out during the peak months. A cottage can withstand long periods of vacancy and still be profitable, considering an average rental fee of $200 per night.

Still deciding if buying a cottage is the right choice? Here are some other resources to help you:


How To Finance A Cottage Purchase

Once you’ve decided to buy your cottage, one question will undoubtedly arise. How can you finance your purchase? The first step will be a visit to your lender or mortgage broker to see how much you will qualify for. 

If you have owned your current home for several years, you may be able to use your equity to qualify for a second mortgage. Borrowing against your equity gives you several advantages:

  • You can usually access much higher amounts than a first-time buyer.
  • Interest rates tend to be lower. Since the loan is secured by your home, there is less risk to the bank.
  • If you’re using your equity to purchase an income property, there may be tax benefits.

On the other hand, taking out a second mortgage comes with one substantial risk. If you default on the loan, you could lose your house.

Before applying for a second mortgage, it’s a good idea to consult with a financial advisor to understand your unique situation and your risk tolerance.

Ready to Find Your Cottage?

After analyzing your finances and resources, you’ve decided to take the plunge. This is one of the most exciting moments in your life, and cottage hunting can be fun. How do you get started? 

  • You can list all of the features you want your cottage to have, such as the number of bedrooms, proximity to amenities and whether you want one on the waterfront. 
  • Make a note of your top contenders to visit in person. This is the fun part! Set aside a weekend where you can walk through and explore the property and the community.
  • Work with a real estate agent who specializes in the area. A local real estate agent can tell you about all of the hidden gems in the community and help you find your perfect home-away-from-home.

Do you want to know more about cottages available in the Kawarthas? We are happy to get you started and answer any questions you have. You can book a meeting with us here.