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Cottage Ownership Vs. Vacations: Which One Makes Sense for You?

July 24, 2018
4 mins
A woman lounges in a hammock on the beach

Do you enjoy spending your summers in a quiet, serene setting, sitting on a dock overlooking a beautiful lake, glass of wine in hand? Or are you all about adventure, planning vacations throughout the year in different places all over the world? No matter which scenario appeals to you more, it’s likely that you will shell out tens of thousands of dollars throughout your life to pay for vacations. But which one makes more sense for your budget? Here are some things to consider.

How often will you visit a cottage?

A cottage is a permanent vacation home; therefore, you’re going to want to spend as much time there as possible. This is an ideal situation for teachers who get nearly two months off when Canadian weather is at its best, or for retired individuals who have long stretches of time that they can devote to the cottage. It’s also a good getaway for families with young children with parents who might not feel comfortable flying or venturing too far away from home with their little ones.

However, if you don’t spend more than a few weeks and at least four weekends per year at the cottage, it may not make sense to purchase one. In that case, it may be better to rent a cottage for your desired length of time and have money left over to travel to other destinations.

The costs that come along with ownership

Say you purchase your dream cottage for $350,000 – a figure no longer uncommon in an area like Muskoka. Besides paying a mortgage, you will also have to contend with annual real estate taxes, property insurance, property repairs and upkeep, gas money to get there and back and any minor damage that could arise from well-meaning guests. No matter how much you love your home-away-from-home, it’s estimated families will spend anywhere from $5,000 to $15,000 per year on all these cottage extras.

It’s a different story if the cottage in question has been in your family for generations and many people use it each summer. What’s more, you can also choose to rent out your cottage when you’re not there and earn some income, but not everyone is comfortable with strangers staying at their property. This, too, can leave your cottage vulnerable to damage by renters.

Does cottage ownership cost more than vacations?

Whether cottage ownership could incur a larger bill than your jet-setting journeys depends on where, when and how you travel. Fellow RATESDOTCA writer Rubina Ahmed-Haq says for the average Canadian, a vacation budget shouldn’t total more than 4% of an individual’s or family’s income, after tax. That means if you’re earning $50,000 annually, your allocated annual vacation budget is $2,000. Similarly, figures from Statistics Canada show that Canadians spend between four and 5% of their income on recreation. For some households, this may or may not be equivalent to the yearly costs of cottage upkeep.

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Can you have the best of both worlds?

There are certainly ways that you can mix a little bit of cottage lifestyle with a trip to Italy. Instead of owning a cozy cabin on the lake, simply rent one for a week or two. This could amount to anywhere from $800 to $2,000 per week during high season – much less expensive than the annual upkeep for a property of your own. And if you still have a good chunk of change set aside in your yearly travel budget, maybe you can still book that European vacation. If not, there may be ways to enjoy a similar serene lakeside setting at your vacation destination or compromise with a cruise or all-inclusive resort on the beach in the Caribbean instead.

Owning a cottage, however, and taking additional vacations to other places is not an option for every Canadian.

Ultimately, is it worth it?

This is the most important question to ask yourself when it comes to your leisure and vacation time. Examine your finances and your budget first. If your heart is set on buying a cottage, and you have the means and the time to do so, and you’ve taken all the advantages and drawbacks into consideration, then it’s the right choice. But if it’s more of a novelty that will likely wear off after a few visits or even a few years, then it could be a very pricey impulse buy, making vacations the better – and cheaper – alternative.

This post has been updated.


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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