The cottage: Is it worth it?

As the kids prepare to head back to school and many cottage owners prepare for the final hurrah of the season, I ask a simple question about your summer retreat: Was it worth it

Did you spend as much time there as you wanted Did you get your money's worth Have you done the math

I am often surprised at how much energy and resources go into owning a cottage, compared to the enjoyment that comes from it. At the risk of insulting a large percentage of cottage-loving Canadians, I will jump right in and say that for many owners it just doesn't make financial sense.

I know many people with a cottage who spend no more than 20 or 30 days a year there. I know there are exceptions, but a large percentage will spend a week or two, and then another 4 or 5 weekends, maybe less.

There are many reasons why cottages get underused. A big one is simply stage of life.

If you have a cottage when the kids are young, your life revolves around them and their life is relatively simple. You might get very good use out of the cottage. That is unless you find the stress and strain of getting everyone organized on Friday just to repack for the drive home on Sunday.

As the kids become pre-teens and teenagers, their lives become more complicated and carving out holiday and weekend time at the cottage can become more challenging. As the kids get summer jobs and go away to university in different locations, life continues to be busy for your work and travelling to see the kids. The cottage can go unused an awful lot.

Once you are retired or close to it, often there is more cottage time — especially if there are young grandchildren whose parents want to spend time there.

While some people do choose to rent out their cottage, and this can make a lot of financial sense, there are many who choose not to — they may not need the money or may just be uncomfortable with strangers staying at their property.

There can be stretches of many years where even a well-loved cottage is rather abandoned.

Consider what cottage owners must put up with:

Typical expenses for a mid-size, mid-value cottage could easily run $15,000 a year. Say you spend 20 days this summer at the lake, paid $15,000 in upkeep, taxes and other expenses. Those 20 glorious sunsets cost you $750 apiece.

An alternative is to simply rent. Generally you might pay $800 to $2,000 a week in prime season to rent a cottage.

Let's say you want to rent for two weeks at $1,500 a week. You pay $3,000 and you are done.

If one summer you prefer to go to Europe, no guilt. Or you want to vacation in a different province one year, no problem.

And that's not even touching on things like who will inherit it and, more importantly, who will pay the taxes when you're gone. Say the family cottage was bought for $50,000, 40 years ago and today it is worth $750,000. The owners want to keep it in the family and pass it on to their three children. When the second parent passes, there is a tax bill of $160,000. Only two of the three children want to keep the cottage. Only one of the kids has the money available to pay the tax bill. While proper insurance planning can help, this is often a serious issue.

There are many examples where one child's family uses the cottage much more than another, and creates conflict. Also, one family looks after the cottage well, while the other leaves everything a mess.

This doesn't cover off health issues that might keep people close to home or divorce that puts the property in play.

It is true that owning a cottage has been a good financial investment for many people, both by renting it out and through appreciation, but this price appreciation is far from a sure thing going forward, and you could have used the capital in other ways.

It is also true that for some people the cottage is their favourite place in the world and has been in the family for generations. More power to you.

But for many cottage owners, especially those who own cottages that sit empty for months at a time, is it really worth the trouble Probably not.

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