Tips for buying a cottage in Canada

If you've always dreamed of owning a cottage, here are a few things to consider first.

Because life is all about making compromises, it's important to be realistic about purchasing a cottage. Be prepared to compromise in advance and know that it's unlikely that you will get everything you want. Consequently, it's best to differentiate between things you must have (like three bedrooms for you and your family) and something you want (like a five-star kitchen).

Factors to consider include the size of the home, the cost of maintenance and the location of the property. To help with the process, it is advisable to hire the services of a real estate agent. Not only will the agent know the area, but he or she will also be able to assist in negotiating the price of the cottage.

According to the Financial Post, the average price of a cottage varies significantly depending on location. A cottage can range in cost from $150,000 to more than $1 million for a property in Quebec or Ontario. Because of this large discrepancy in cost, it's important to settle on a budget before searching for homes. Looking at a cottage before deciding on a budget is a recipe for disaster, as you may fall in love with a property that you can't afford.

Obviously, cash is king when purchasing a property; however, many people do not have the funds to deal in cash. Luckily, there are many financing options available in Canada for individuals interested in purchasing a second home. First, you can take out a line of credit against your current home. However, you risk losing both properties if you are unable to make a payment. Second, you can opt to take out a second mortgage or increase the monthly payments on the existing mortgage to compensate for the new property.