Buying Cottage as a real estate investment
The first question you should ask yourself when it comes to real estate investment is” Can you sell it for more in few years?” and your answer depends on various factors. For example, location, rental rules, management costs and others.
Appreciation is one of main factors and it refers to the increase in an asset (your cottage property) over time. So, choose wisely and consider location as a key element. Being close to ski slopes, waterfront, city centers and many other activities is advantageous.
You may also consider renting your cottage as a supplementary income. However, there are certain things you should know:
• Beside of location, a fully equipped, modern cottage will generate more interest. Many people looking for high speed internet, cable television, fully equipped kitchens, cleaning service and so on.
• Your cottage also needs certain level of management, you will need someone to maintain, clean, clear snow, take out the trash etc.
• Your cottage also needs advertising, insurance and many other associated costs. Additionally, your rental income must be declared, and it is taxable. However, the costs associated with the rental property are tax deductible, these include mortgage interest, property taxes, insurance, maintenance and upgrades.
• Before you invest to buy a cottage to rent, make sure municipal and provincial laws allow you to rent your property, so you can at least cover your mortgage payment and even make extra income.
In conclusion do your research and make wise choices to increase the return on your investment if you buy cottage for personal enjoyment its weight in gold. However, your situation may change, and you may want to rent it out, so you need to have peace of mind. You can even buy a cottage and rent it out till you retire, in this case you can enjoy it with almost no mortgage.