Anxious cottage buyers getting desperate
By Gordon Powers, Sympatico / MSN Finance
Canadians are willing to make big sacrifices to own a cottage, and more want to use their oasis year-round as a recreational property or even as their primary residence, according to recent research by Royal LePage.
To pursue their dream of buying a recreational property, most would be willing to do just about anything. That includes purchasing a property with family or friends, renting it out to make ends meet, making it their primary residence, buying a handyman special, or downsizing their city home in the hopes of building up equity somewhere on the water.
What didn’t make the list though were fractional cottages, which is surprising since they seem to popping up all over, particularly in Ontario and B.C.
Fractional ownership is somewhat similar to purchasing a timeshare, but with important differences: You purchase one or more shares in a cottage, often part of a larger development, and are assigned proportional weeks of usage called intervals. Normally, you’d have access to your cottage five weeks per year, one week in every season, plus an additional week. The cottage remains empty a couple weeks each year for maintenance and repairs.
Since setups like these are available to the owner for more of the year than a timeshare, they’re often easier easy to rent out when unoccupied. And many fractional properties are linked with larger vacation-exchange networks like Resort Condominiums International.
What’s the catch? Well, it’s not your own place so you can’t leave your photos lying around and there are generally lots of rules. In some developments, for instance, you can’t hang bathing suits out to dry or barbecue just anywhere. Nor can you make any changes to your decor or furnishings without your co-owners' approval. And only some are pet friendly.
Still, for as little as $50,000 and $150-200 a month in homeowners association fees to cover maintenance, power, and property taxes, this kind of shared ownership can be an attractive option for some.But you're definitely paying a premium, depending on the location and the level of amenities.
Would it work for you?
Posted by: DBoater | Jun 19, 2009 8:11:02 PM
I bought a 12 yr old sailboat 35 ft that I keep in the marina year round (yeah, you do that in BC)
It is my ocean front cabin with the changing view.
Sure, the boat does not keep the value and is not considered an investment in the financial sense, but you can't get the water front property with ever changing view for $80K. ( plus $300 marina bill and some annual maintenance)
Go West !
Posted by: Ken | Jun 19, 2009 10:11:24 PM
Balsam Lake resident. There is a fantastic cottage with 5 bedrooms with 2 fireplaces, enclosed sunroom with breath taking sunset views. At $5,000 for an entire month. Enjoy and walk away. Why would anyone pay $50,000 or more for a part ownership and monthly fees on top of that. What a dumb investment.
Posted by: bosco sponge | Jun 19, 2009 11:14:46 PM
another article written by real estate agents to make you think that everything is OK and that the down turn in the economy is not real
Posted by: A Born Westerner | Jun 20, 2009 9:33:33 PM
different strokes 4 different folks!
Posted by: Garth Mitchell | Jun 21, 2009 12:02:46 AM
Remember...if you have a home in the city....and buy a cottage...you are paying $$$
to keep one home EMPTY all year!!!!....something to think about!!!
Posted by: mcshane | Jun 25, 2009 7:21:54 AM
DBoater...For the cost of one waterfront cottage/cabin "out west" you can buy 10 in the Maritimes, for the cost of your depreciating boat you can buy 2 waterfront cottages on acres which will increase in value. Don't tell anyone but the people here are still friendly and you don't need to lock the doors. The schools still have "christmas concerts" and they sing O' Canada every morning. They take pride in preserving thier culture.
Go west? you must be joking, you can't see the mountains in the rain. Who can afford to own a cottage there let alone a house? even on an income of $100,000+ per year. Never mind the gangs, shooting and drugs. Over 40 shooting so far this year and 20+ deaths. Go west? How come?
Posted by: Philippines properties | Aug 25, 2009 2:48:38 AM
I am willing to sacrifice too just to have my own cottage.
Deirdre Gonzales