Is a Cottage a Worthwhile Investment? Let’s Explore the Possibilities.
Dreaming of a cozy lakeside retreat or a cabin in the woods? You’re not alone. More and more Canadians are considering buying a cottage—not just for personal enjoyment, but as a potential investment.
But before you start picking out fire pits and kayaks, let’s look at whether buying a cottage is really a smart financial move—and what you should know before diving in.
What Counts as a Cottage?
In mortgage terms, cottages are typically classified as secondary or vacation properties—meaning they aren’t your primary residence. They can range from year-round homes in recreational areas to more rustic seasonal cabins.
There are two main types:
Type A properties: Accessible year-round by road, have running water, and are considered suitable for full-time use.
Type B properties: More rustic, possibly seasonal, may lack heat or permanent foundations.
The type of property will impact your mortgage options—something I can help you navigate if you're unsure.
Pros of Investing in a Cottage
Here are some of the key benefits homeowners consider:
Appreciation: Cottages in popular areas (like lakefronts or near ski resorts) tend to appreciate in value, especially as recreational real estate becomes more limited.
Rental income: Short-term vacation rentals through platforms like Airbnb or VRBO can generate income and help offset mortgage costs.
Personal enjoyment: Beyond financials, owning a cottage can be a lifestyle investment—offering family memories, weekend escapes, and peace of mind.
Equity building: Just like your primary home, your cottage builds equity over time.
Things to Watch Out For
While a cottage can be a good investment, there are definitely things to consider:
Higher mortgage rates or down payments may apply, especially for seasonal properties.
Maintenance costs can add up—think septic systems, roof repairs, pest control, winterization, and insurance.
Property taxes on secondary homes are often higher.
Financing can be trickier—especially for Type B cottages.
You can read more about financing recreational properties from the CMHC’s Cottage Buying Guide to understand lender expectations.
Will It Work for You?
Ask yourself:
Is this for investment, personal use, or both?
Can you realistically cover the upfront costs, maintenance, and potential vacancy periods?
Are you prepared for the responsibilities that come with a second property?
If you already have equity in your current home, a refinance might be an option to access funds—learn more about that here.
A cottage can absolutely be a worthwhile investment—if it fits your financial goals and lifestyle. Whether you're thinking of a cozy summer getaway or building a short-term rental portfolio, it’s important to have a clear strategy and the right mortgage advice.
Curious if a cottage fits into your future plans? Let’s talk! I’d love to help you explore your options and make a smart, stress-free decision.
Contact me to get started—whether you're dreaming or ready to dive in!