We own a three-season cottage in Canada, about three hours drive outside of Toronto in the Muskoka region (a very very very popular cottage region in Ontario). Cottages in the area run from $150,000 for a manufactured home in a non-lakefront location to multi-million dollar magazine worthy spreads on prime lakefront property. Definitely expect to pay a huge premium for lakefront property. With COVID and the move to WFH, Toronto and other city folk have been selling their homes and moving out of the city, driving up cottage values. In Ontario, summer (July-Aug) is your peak season. Cottage season starts after Victoria Day (late May) and runs to Thanksgiving (mid-October). Your cottage is rentable during the shoulder seasons (May/June and Sept/Oct) but may not command as high rents. In the winter it gets too cold and there’s too much snow and depending on where your cottage is, the roads may not be passable. The cottages that do well in winter are located near ski resorts.
A few things I’ve learned:
Property management for cottages run from 25-30% of rents collected.
Vacationers will absolutely trash your place. To them this is a normal hotel, not your home. Don’t keep anything too precious or personal in your home. Expect to replace pillows, bedspreads, vacuums, brooms, kitchenware, and furniture on a semi-regular basis.
The times you want to use the cottage is likely when vacationers will also want to use your cottage.
You can’t just close up the cottage in the winter. You need to winterize it and have someone make sure that it’s still standing and whatnot especially if when there is a heavy Snowstorm.
We barely broke even and it was a pain having to replace all the broken/stolen things. A better idea if you only want to come up for the summer is to buy a three-season cottage in a cottage resort. The resort management will take care of everything for you when you’re not there. It’s also cheaper because it’s only open six months of the year and your resort fees cover everything (boats, beach, paddleboards, etc). You can rent out the cottage if you’re not using it. The resort management will take care of that for you for an additional cost. At the end of the day, a cottage is an expense, not an investment.