Is it better to buy or rent a cottage?

The desire to own a cottage where you can look forward to making memories on the same lake every summer is an obvious one for many Canadians.

However, Ted Rechtshaffen, president and chief executive of TriDelta Financial, says the financial argument for owning a cottage instead of renting one is harder to make.

“From a financial perspective, I think it’s quite often not a good idea to buy a second property that you’re not going to be renting out or living in,” Rechtshaffen says.

“It is an incredibly expensive thing and you’ve got to hope that real estate in the cottage country wherever you’re buying is going up a lot or at least a pretty steady amount to make up for the huge expenses.”

The costs of owning a cottage are a lot like owning a house in the city. You have property taxes, maintenance costs and utility bills as well as a mortgage if you have to borrow to buy it.

There will also be the cost of insurance and any upgrades you will want to make. Decks don’t last forever, things like septic systems and docks need to be maintained and all the little chores to keep your house in order can also add up at the cottage.

Buying a cottage also commits you to the same location.

“Are there a thousand other places in the world that you’d like to explore?” Rechtshaffen asked.

Weigh that against the cost to rent a cottage for a couple of weeks each summer and the financial case may look bleak.

However, if you own a cottage, you could rent it out to help offset some of the costs to maintain it. Not only will you be able to earn income from the rental and part of the costs to maintain the property may be claimed against that rental income when you file your taxes.

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Real estate broker Andy Mosher of Century 21 Granite Realty Group in Haliburton, Ont., says owning a cottage isn’t for everybody.

He says renting is a good way to decide if cottage life is right for you and figuring out where you want to be.

“A lot of people rent first and maybe if they come back to an area a couple of times they start to think about making that long-term investment,” Mosher said.

But, he says renting isn’t any kind of investment.

“If you want to make the commitment to buying a property and improving the property and doing all that comes with it, that’s certainly a long-term investment,” Mosher said.

For some people, Rechtshaffen acknowledges that owning a cottage is about more than the cost.

“It seems to be part of the Canadian dream and my only thing is make sure you understand how expensive that is and whether that’s worth it to you,” he said.