The Cottage Ownership Guide: How to Buy, Sell, Rent, Share, Hand Down and Retire to Your Waterfront…

Paperback | October 3, 2012

byDouglas Hunter

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This book is designed to help first-time buyers and long-time owners make the most of a cottage investment. Douglas Hunter provides expert advice on all aspects of ownership of a second home, from finding and buying the perfect cottage to selling it or handing it down to the next generation. The hundreds of tips and cautions, sample documents and comprehensive checklists lead to maximum enjoyment of a cottage and minimal unhappy surprises.

The book is jam-packed with solid information and easy-to understand advice, including:

  • How to choose the right location
  • Finding the perfect property to match a lifestyle
  • Finding the right real estate agent
  • How to inspect a vacation property
  • Cottage surveys
  • Financing the purchase
  • Co-ownership arrangements, including fractional ownership and time-shares
  • Strategies to minimize taxation in the U.S. and Canada
  • Trouble-free rentals and using a rental agent
  • Boosting market appeal when trading up or selling
  • How to structure a cottage inheritance to reduce taxes -and family disputes
  • Retiring or relocating full time to the cottage.
  • This all-in-one resource also identifies potential problems and offers effective solutions to common challenges.

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    From the Publisher

    This book is designed to help first-time buyers and long-time owners make the most of a cottage investment. Douglas Hunter provides expert advice on all aspects of ownership of a second home, from finding and buying the perfect cottage to selling it or handing it down to the next generation. The hundreds of tips and cautions, sample ...

    Douglas Hunter regularly writes on business, sports and outdoor pursuits for a variety of publications. He is the author of 13 books and lives on Georgian Bay in Ontario's cottage country. by Douglas Hunter

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    Format:PaperbackDimensions:256 pages, 11.25 × 8.75 × 0.62 inPublished:October 3, 2012Publisher:Cottage Life BooksLanguage:English

    The following ISBNs are associated with this title:

    ISBN - 10:0969692269

    ISBN - 13:9780969692263

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    1. Introduction Vacation homes have been with us for as long as humankind has needed a vacation. The Romans had their villas. The Elizabethans couldn't wait to escape the crowds and pestilence of London and head for their country retreats. Somewhere in our deep past, whenever breaks in the mammoth-hunt schedule permitted, a cave dweller probably grabbed spouse and kids and shambled off to a quiet spot with a drop-dead view by the tar pits. The cottage is supposed to be about "getting away from it all," but clearly you don't have to be cooped up in one of Milton's Dark Satanic Mills before you start yearning for a respite at the lake. Most people who own a vacation property have a perfectly nice home elsewhere. The change they're looking for is not just about fresh air and a place to paddle a canoe, but about a different set of priorities. A cottage is about sleeping in -- or getting up even earlier than usual to do some fishing. It's about having a haven for family and friends -- or a haven from the rest of the world entirely. Cottages are where batteries are recharged, where harried souls can decompress -- regardless of where they're located or their degree of sophistication. The cottage is synonymous with escape. And with a perfect cottage, the escaping is to, not from. You stop thinking about getting away from town -- it's not just that any port in a storm will do -- and, instead, about getting to the lake. Some of you reading this book have probably had years of experience with cottages. Some of you own one already. For those of you interested in buying your first cottage, perhaps your family had one that evokes fond childhood memories. Others will have little experience with cottages at all -- perhaps a visit to a friend's getaway or a summer rental has piqued your interest in becoming an owner. You may be single or half of a couple, or surrounded by kids... or grandkids. Your idea of the perfect retreat is going to differ from the next person's. And depending on where in North America you live, so too will the types of retreats on offer. But regardless of who you are, where you live, and where you plan to buy a property, you all share some common cottage concerns. Balancing emotional attraction With solid advice Owning a cottage is -- and should be -- an affair of the heart. But when we've fallen in love, sometimes we give clear thinking and logical planning a back seat. That's where The Cottage Ownership Guide comes in, helping you balance the emotional appeal of a cottage with solid information. It will guide you through the common-sense aspects of purchasing and ownership, as well as the hard financial decision-making that goes along with them. Some of you are looking for an undeveloped piece of lakefront land, others for a remote cabin or a simple cottage on the water. Still others are in the market for what amounts to an all-the-bells-and-whistles lakeside home. Some of you only imagine using it for a few weeks every summer. Maybe you're thinking of renting it out occasionally, perhaps selling it eventually. Others plan to retire to it now or in the near future -- or even 30 years from now. Perhaps you face issues related to sharing a cottage, or you're wrestling with how best to hand it down to your kids. Whatever your situation, this book aims to provide sensible and practical advice. People buy vacation properties for many reasons, and this book is directed specifically at one broad group: those who seek a waterfront property for their own personal use. All real estate is an investment of sorts, but this is not a manual for buying a cottage exclusively as an investment property. This book also does not attempt to address vacation-property specialty markets such as condominiums and ski chalets (unless the chalet is a lakeside cottage doing double-duty as a winter getaway). Think of the classic waterfront getaway (which may or may not be winterized, and may not even be right on a lake), and you're in the right book. The goal of the guide: Helping you ask the right questions Nevertheless, the scope of this book is hardly narrow. It takes a deep breath and plunges into the North American cottage market. Theoretically, that means dealing with properties in 10 different Canadian provinces and 48 continental American states, with owners who might live in one country and own a cottage in another. It means a myriad of taxation, financing, zoning, building-code, boating, and environmental-protection regulations at several different government levels -- from the municipal right up to the federal. This guide doesn't attempt to describe every rule and situation, but instead is intended to alert you to possible concerns and steer you in the right direction for specific information. Consider this book a primer on the issues involved in purchasing, owning, selling, sharing, renting, retiring to, and bequeathing a cottage. Much of its information will be handy, no matter what sort of property you're looking for, or own. By the same token, this book doesn't deal with aspects of buying and selling real estate in general (such as the structure of an offer to purchase), precisely because the information is general. Cottage properties are a specialized branch of real estate, and this book aims to help you understand the many nuances of that branch. In many areas, the information in this book will be the beginning of your search for detailed answers that depend on your specific circumstances and the laws that apply where you live. Not only are laws and regulations specific to particular jurisdictions, they are also fluid. Generally speaking, "big-picture" issues, such as the application of capital gains tax to property or (for American taxpayers) mortgage interest deductibility on vacation properties, are bound to be with us for some time. What will change to varying degrees is the way these issues operate at the fine-print level. The book strives to explain the essential issues, knowing that circumstances on a property on any given lake can change at any given time. And while in some cases an explanation of a particular financial issue is made with a sample worksheet, keep in mind that the precise calculation could change in the near future. In these complex areas, the book will give you a useful appreciation of the essential issues, and from there you can turn to your accountant, lawyer, banker or other professional to fill in your particular picture. How this book works Most of us learn best through example, and from experience. This book draws on the specific experiences of cottage owners and the seasoned advice of industry professionals to bring facts to life and illustrate many unwritten rules of the cottage market. Along with the straight text, you'll find Tips, Cautions, Case Studies, Q and As, Charts, and Sample Calculations -- as well as checklists, to assist you in working out your own plans. The book is organized in a somewhat linear way, taking first-time buyers from the beginning of their search for the perfect property right to the point of estate planning. This structure attempts to impose some order on the process, but we all know that life isn't so neat. You may not follow the precise process the book outlines -- and certainly this book's way isn't the only way -- but by absorbing that process, you'll pick up useful information, and gain directions to other chapters for more on related issues. Even if you've already begun the search process by the time you pick up this book, I encourage you to start reading at the beginning. Ultimately, however, this book isn't meant to be read straight from front to back. You will find directions within chapters sending you elsewhere in the book for more information, particularly where a subject isn't necessarily exclusive to the theme of one chapter. Different chapters will be more important to you at different stages of your cottage ownership, and if you're just starting the search process for

    Table of Contents

    1. Introduction
    2. Getting started
    3. Determining your "needs" and "wants"

      The "needs": How much and how far?

      • How much are you willing to spend?
      • Chart: Surprise, surprise: How additional costs add up
      • How far are you willing to travel?

      The "wants": Making your wish list

      • Do you want a cottage you can use year-round?
      • Drive-to or water-access?
      • What is your vision of "cottage country"?
      • Are you willing to rough it? If so, how much?
      • How many people do you want to fit into your cottage?
      • The L.Q. test: What is your luxury quotient?
      • What do you want to do for fun?
      • Are kids part of your cottage picture?
      • The Cottage Wants Checklist

      Cross-border shopping: Issues affecting Americans buying property in Canada

      • Taxation
      • Restrictions on non-resident land ownership
      • Borrowing from Canadian institutions
      • Health care and retirement

      Caution for Canadians buying from a non-resident

    4. Choosing your lake or river
    5. How to make sure a specific place fits your wish list

      How to be a lake detective

      • Mining cottage association reports for nuggets of buyer-helpful information
      • Who's in the know? Where to turn for info
      • What's your lake like?
      • Area maps: Essential tools for lake detectives
      • How much does the water level change?

      Matching your lake with your planned activities

      • Sample lake analysis

      Do you even need a lake?

      Hot-button local issues

      • Where to turn for info on local issues

    6. The property search process
    7. Finding what's on the market and finding an agent

      Looking for love in all the right places

      • The Multiple Listing Service on-line
      • When is there too much liquidity?
      • Realty web pages
      • Independent commercial websites
      • How to snag a property where cottages rarely come up for sale
      • Print media
      • The "With Contents" Purchase

      How to choose an agent

      • Two bottom-line must-haves
      • Understanding the agent's role
      • The birth of the buyer agent
      • What a seller's agent is obligated to show you
      • Choosing the agent relationship that's right for you

    8. Taking a test drive
    9. Your first trip to see a property

      Testing the location

      • Is this where you want to be?
      • Where does the sun set?
      • Which way does the wind blow?
      • Case study: Off-season buying requires more detective work
      • How close are the neighbors?
      • How do you get to the property?
      • Questions to ask about a property's road access
      • Questions to ask about a property's water access

      Testing the neighborhood

      • Who are the neighbors?
      • What is the boat traffic like?
      • Is the water used by transient boaters? Or anglers?

      Testing the cottage

      • How does the cottage get its power?
      • Where does the cottage get its drinking water?
      • Questions to ask about the water system
      • How does the cottage treat sewage?
      • Questions to ask about the waste system
      • What sort of communications systems are available?
      • Is the cottage suitable for year-round use?
      • How is the cottage insulated?
      • How is the cottage heated?

    10. The property survey
    11. What it tells you and why every cottage needs one

      Survey basics

      • Different types, different levels of information
      • How recent is recent?
      • Who pays for the survey?

      Survey issues

      • Encroachments and boundary disputes
      • The shoreline road allowance
      • Other road allowances
      • Cottages on leased land
      • Restrictive covenants and easements
      • Ownership beneath and on the lake
      • Where does the waterfront end and the lake begin?
      • Aboriginal land claims

    12. Inspecting the cottage
    13. What a professional inspection tells you

      Why inspect?

      • When to inspect
      • Goals of an inspection

      Who inspects cottages?

      • Finding a cottage inspector
      • What an inspector does not (or might not) do
      • No-nos for home inspectors

      The inspection process

      • Arrange to go along
      • What an inspector is looking for
      • Got 'em covered?

      Evaluating the inspection report

      • Structural
      • Q and A: Problem discovered. Is it time to walk away?
      • Mechanical
      • Pumps and plumbing
      • Septic smarts: The snowball effect
      • Seller disclosure: Telling it like it is
      • Heating systems
      • Getting the green light on woodstoves

      Inspections and options for closing

      • Getting the repairs done

    14. Buying a lot or tear-down
    15. How to approach other cottage purchase options

      "Non-resale" options

      • Vacant land
      • Q and A: Can you rebuild a tear-down that breaks current rules?
      • Tear-down/renovation
      • Planned subdivisions

      Heading off headaches

      • Will you be allowed to build?
      • What to do before buying
      • How much will it cost?

      Tax tips for Americans buying land and building a cottage

      • Deducting interest charges
      • Undeveloped land as an investment property
      • Deductions for a home under construction

      Tax tips for Canadians

      • Case study: Reducing the buy-now, build-later tax hit

    16. Financing the cottage purchase
    17. How to do it to your best advantage

      Risk assessment in cottage real estate

      • How big a mortgage will you need?
      • Who gets the best financing deals?

      Types of loan products available for cottages

      • Conventional mortgages
      • Insured mortgages
      • Collateralized mortgages
      • Cross-border flnancing: American buyers and Canadian banks
      • Conditions that concern banks
      • Chart: Risky business

      Other forms of financing

      • Use your home as collateral
      • Using other assets as collateral
      • Working with a line of credit
      • Sample spreadsheet: Using a line of credit to buy cottage furnishings

      Financing land

      Mortgage interest deductibility for American buyers

      • Q and A: Can we claim the deduction?

    18. Sharing a cottage
    19. Co-ownership with friends, family -- or strangers

      Prerequisites for success

      • A compatible vision for how the property will be used
      • A compatible vision for change

      Co-ownership structures

      Issues in co-ownership

      • Financing the purchase
      • Who gets to use it when?
      • Chart: Choosing time slots
      • How will expenses be divided?
      • Changes in ownership

      Where trouble lies

      • Don't sweat the small stuff
      • Play to the partners' strengths
      • There's a difference between breakage and breakdown
      • Other common causes of discord
      • Co-ownership agreements: Dealing with the what-ifs
      • Case study: A solid friendship is no guarantee of a trouble-free co-ownership

      Time-sharing and fractional

    Editorial Reviews

    This book is a must-have for cottage owners or anyone with dreams of buying a cottage. The basic buying tips are helpful, but the best part of the book is that it addresses a key question for baby boomers: Is retirement at the cottage really possible? ... Add this to your fall cottage book list.