Investing in a Cottage after your Primary Residence
Everyone is looking for ways to make more money or supplement an additional revenue stream to their income. Something you may not immediately think about is a cottage as a first-rate investment opportunity.
Sure, you want to be able to enjoy the cottage yourself (and you CAN)– but by also renting it out to others when you are not using it, you may as well be able to pay for the mortgage plus have a little extra cash to put in your own pocket – or get that fishing boat you have been dreaming about!
Taking advantage of social media to rent out your cottage
While this strategy for cottage ownership is nothing new, the advent of social media has made it much easier and more popular. In an age where one’s digital persona is more important than ever, many people would prefer to have experiences over possessions – experiences that they can post online. In fact, a Harris study recently found that 72% of Millennials prioritize experiences over things.
What does that mean for someone who invests in a cottage as a rental property?
It means that you already have a built-in target customer who is just waiting to rent out your place so they can send tweets from the campfire and facebrag about their weekend at the lake! People want the cottage experience, and are willing to pay good money to get it.
The digital age has also made it much easier for cottage owners to get the word out. There are a number of websites available where you can list your properties for rent including sharing economy sites such as AirBnB, HomeAway, Kijiji, as well as directories specifically for cottages. Alternatively, if you prefer, you can list your cottage directly through social media sites with tools like Facebook’s recently launched marketplace feature.
The demand for the cottage experience is high, so buyers who find the right property and know how to market it have the potential to earn some good income on their vacation properties. There are also management companies that will do it for you in exchange for a portion of the rent should you wish to not list the properties yourself.
Typically, you are going to be able to charge more for shorter stays (daily or weekly rates) than you will be able to for longer ones (monthly or yearly). This is good news for a cottage investor since most people are only able to take a week or two off of work at a time for vacation.
A good time to buy?
It is no secret that the housing market in Toronto and surrounding areas have been very hot over the last few years. During that time however, prices for Canadian vacation properties have remained fairly stable
According to Toronto realtor Mark Adelson, now may be an ideal time to invest in a cottage,
“With the strengthening of the economy and the changing mindset that experiences are better than possessions, there is more disposable income being allocated to these experiences. Investing in a cottage is a cash cow investment and while the economy is strong you can make a lot of money due to the demand.”
If you are interested in learning more about investing in a cottage as a rental property or would like to see for yourself some of the opportunities on the market, contact Adelson & Weiss today.