There’s something deeply appealing about the idea of owning a cottage. Whether you enjoy quiet mornings sipping coffee on the deck or tubing around the lake with the kids, cottages are a great place for making family traditions and memories. In fact, it’s warm sentiments like these that can make it hard to say no.
The challenge in buying a cottage is that it’s more than just a real estate decision. It’s a lifestyle and financial one. Making big financial decisions like this is often less about whether you can afford to buy one and more about determining if it truly fits your season of life.
In this blog, we’re going to address some of the top considerations associated with buying a cottage, and provide practical exercises to help you determine if it’s the right decision and the right time for you to buy.
The true cost of ownership
Many people focus solely on the purchase price, but the ongoing (and hidden) costs of buying a cottage or lake house can really add up. On top of your mortgage, annual expenses can include:
- Property taxes
- Insurance
- Utilities
- Maintenance and repairs
- Dock upkeep
- Landscaping
- Winterization
- Recreational investments like bikes, boats, stand-up paddleboards, kayaks, etc.
Exercise 1 // Count the cost: Before focusing on memories and lifestyle, it’s important to understand the full financial commitment. One helpful question to ask is: Can we comfortably absorb these costs while continuing to save and pursue our other priorities?
It’s a helpful exercise to calculate your cost per night. For instance, if you think you can make it to the cottage 30 nights per year and your annual carrying costs are $30,000, then you’re effectively paying $1,000 per night to own the cottage. Now, this doesn’t automatically make it a poor decision, but how does it factor into your lifestyle?
Thinking about the numbers this way could help you:
- Adjust your budget
- Reconsider how frequently you should plan to visit the cottage
- Help you feel confident that a cottage is right for you, just not right now
- Determine whether the consistency of ownership is worth the price
Exercise 2 // Consider the alternatives: A cottage may be affordable and still deserve careful thought.
One helpful exercise is to think beyond the purchase price and consider what this decision means for the rest of your financial life.
Whether purchased with cash or financed with a mortgage, a second home represents an ongoing commitment. Cash purchases may tie up capital and reduce liquidity, while financed purchases introduce monthly payments and carrying costs that can affect future financial flexibility and savings.
It’s also worth considering what happens if you decide not to buy. The down payment, mortgage payments, property taxes, insurance, maintenance costs, and other expenses could potentially be directed toward retirement savings, travel, charitable giving, paying down debt, or other priorities.
Ask yourself:
- How might this decision affect our ability to save for retirement or other goals?
- Would it change how much we travel or spend elsewhere?
- Could it influence charitable giving or family priorities?
- How important is financial flexibility and liquidity to us?
- Are the memories, traditions, and lifestyle benefits worth prioritizing over those alternatives?
This exercise isn’t intended to discourage ownership. Many families gladly decide the cottage is worth the commitment and the memories it creates. The goal is simply to weigh not only whether you can buy it, but how this choice fits within the broader life you hope to build.
Flexibility vs. commitment
One of the biggest tradeoffs with cottage ownership is flexibility. Ownership works well when you have the time and energy to treat your cottage as a “home base,” spending frequent visits or longer stretches of time there, establishing community and relationships with the neighbors around you. But for many families, flexibility is more valuable than ownership.
When you own a cottage in a busier stage of life, there can be pressure to use it as often as possible because you’re paying for it year-round. You may feel a low-grade, continuous pressure that says, “We should go to the cottage this weekend, because we own it.” You may also feel like you can’t take a trip elsewhere because you should be at the cottage.
For families in particularly busy seasons of life, this tradeoff can become even more noticeable. Travel sports, marching band, orchestra, summer jobs, internships, college-age children, and demanding work schedules can quickly leave weekends and summers feeling already spoken for. In these seasons, some families discover they value flexibility more than ownership, while others decide the cottage is worth prioritizing because it creates a place for family and friends to gather.
These feelings can lead many people to settle back into the idea of renting as it:
- Offers freedom to visit different locations
- Keeps you from feeling tethered to one property
- Eliminates unexpected repairs and overhead expenses
- Allows you to adapt plans as life changes
- Alleviates the constant pressure to ‘get there’
Exercise 3 // Try before you buy: If you run the numbers and still feel good about buying, we recommend a trial period before you really commit, to test the lifestyle. Consider renting a cottage in the area where you’re interested for a year or two to get a feel for the pros and cons. Pay attention to noise, street and lake traffic, proximity to essential amenities, flood risks, and the reliability of utilities during peak season. These rental trials will also help you evaluate:
- How often you actually go
- What location works best
- How far you’re realistically willing to drive to get there
- Whether it’s easy to bring/host friends
- If cottage life fits your current season
A note about winter homes
For couples or families with greater flexibility, you may find yourself considering a secondary property where you can spend longer stretches, or escape winter temperatures. Obviously, proximity is less of a consideration for a summer home, but there is still one big factor to consider when determining whether to buy or rent: How long do you plan to stay there each year?
As a general rule, if you’re planning to stay just 2-3 months over the winter, it’s better to rent. If it’s more like 4-5, it may make more sense to buy. Feel free to circle back to the exercises above to help you drill down into your decision.
The bottom line
As with any big purchase or life change, it’s always best to consider how this decision fits with your overall financial future and the season of life you’re in. Your circumstances and financial picture will change over the years, as will your capacity, family dynamics, and priorities.
If you’re hoping a cottage will become a multi-generational family gathering place, it’s worth considering how ownership, maintenance costs, scheduling, and future decision-making might work for family members years from now.
As a closing thought, we invite you to reflect on how your values may play a role in this decision. We find it helpful to remember that “every time we say ‘yes’ to something, we’re also saying ‘no’ to something else.” What would you gain (and possibly lose) by saying yes to a cottage? You may just decide it’s worth the cost.
Feeling overwhelmed? Please don’t hesitate to contact us if you’d like a little help weighing your options. We’re always here for you.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.
Investing includes risks, including fluctuating prices and loss of principal. No strategy assures success or protects against loss.
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.