I know… talking about Fall in August can be a little offside. But heck – I saw winter coats and Halloween costumes in Costco this past weekend! As these last few weeks of summer present great opportunities to enjoy Kawartha cottaging. It’s also a great time for those thinking of selling their properties in a strong market. Is it time to sell your cottage in the Kawarthas?
Having cottaged in the Kawartha’s (Kasshabog Lake) for over 50 years, I’ve watched the dynamics of our lakes change. We all have. Bigger cottages…bigger boats…bigger budgets. And unfortunately, that’s also meant increases in cottage costs including taxes, insurance, and maintenance. While new cottage owners accept these increasing costs, there are those that are feeling the constraints. It may be time to discuss the future of their beloved cottage or lakefront home.
The Cost of Renting
For some, attempting to rent their cottage during some prime weeks can help offset costs. This isn’t exactly ‘free money’ as renting is work. There are the challenges of people using a cottage who are not familiar with cottage life. These can suddenly turn renting into an expensive problem. I know. I’ve experienced these challenges when lending my cottage recently to well-meaning friends. I’ll spare the messy details, but safe to say, septic systems function quite differently than city sewer systems… Add in the need to arrange for weekly cleaning, garbage removal and the possible impact on neighbours, and suddenly, renting is anything but ‘free money’.
One should also be aware that renting your cottage can impact your taxes with regards to declaring the income as well as possible capital gains implications on a future sale of the property. Talk to your accountant to ensure you’re aware of the possible implications BEFORE renting your cottage.
So, perhaps it’s time to consider the sale of your cottage but you’re struggling with when is the right time? Spring? Summer? Fall? Winter? While no one answer can fit all needs, I’d like to share a few ideas for your consideration that may help with your decision.
Competition
There is no doubt that many cottage owners think the spring market is the best market as they hope to attract those seeking to buy and get in time to enjoy the summer ahead. This leads to a huge increase in supply as cottage listings grow exponentially. While there is also steady demand, it can be difficult to showcase your property against the competition and this can lead to longer sale times as well as the annoyance of arranging showings.
However, in contrast, selling in the fall allows cottage owners to capitalize on reduced inventories of available cottages. There remain buyers who have not been able to locate the cottage of their dreams, and your new listing can stand out from the crowd. Believe it or not, we actually experience a fall ‘rush’ market of buyers who are eager and excited about trying to get into the cottage market. If your cottage is winterized, it’s even better, but regardless, it’s strong market worth considering.
Carrying Costs and Maintenance
Selling your cottage this fall removes the burden and costs of carrying your cottage over the winter months. Taxes, insurance, road dues, plowing, hydro – you no longer have these costs during the seasons when you are likely not using the cottage as much. And every seasonal cottage owner knows the potential for the ‘unknown’ next spring. From plumbing to roofing, selling the cottage while these systems are currently up and operating eliminates the potential of repairs next spring.
Opportunity Cost
Selling you Kawartha cottage now allows you to re-position the sale proceeds in ways that align with your current needs. Whether that’s debt reduction, investment, or even pre-inheritance considerations, it’s a chance for financial planning. Again, capital gains consideration is key, but there may be compelling factors to capture that value this calendar year versus next. A good accountant can help shed light on this decision. But let’s not forget – the simple exercise of converting monthly expense into monthly income from re-investing the sale proceeds can be huge for fixed income couples.
Market Fluctuations
As Real Estate Professionals, we all wish we had crystal balls into the future of cottage pricing. A scan of the internet can reveal anything from an impending meltdown to a strong market. One thing I’d like to share is that the Kawartha/Peterborough real estate market has seen explosive growth over the past few years, and to expect this trend to continue indefinitely does not align with history. During my U of T days, I recall one of my economic professors saying that “the only sure thing in the market is change. Expect the opposite of what is currently happening – the key question is when?”
The global economy has seen steady increases in Real estate prices since 2009, achieving in most markets, record pricing. Many markets are now beginning to see prices falling. The supply and demand factors re-aligning the market as higher prices resulted in fewer people being able to afford real estate. What does this mean for cottage prices in the Kawartha’s? Kawartha demand can be linked to many factors, but I believe it’s safe to say we will not experience the explosive price increases we have witnessed over that past 5 years. I believe the market will stabilize and become more balanced. This is my personal opinion and is not intended to represent professional financial advice…
Now is the Time to Sell Your Cottage
Regardless, we have a very good market for cottages in the Kawartha’s. And chances are, if you’ve owned your cottage for some time, you’ll be pleasantly surprised at its value and the opportunity for you to take advantage of a strong market.
As a Professional Real Estate Sales Representative, I would be thrilled to discuss the sale of your cottage. I can provide expert marketing, exposure, and help you maximize your value. Aside from being an active Kawartha cottager, I have owned and operated a digital marketing company that specializes in online advertising. People are using the internet to search for cottages and that’s a topic worth discussion. Your cottage represents an investment that deserves to be professionally marketed.
I would love the opportunity to do just that. You can reach me through this website, or please, feel free to call me at 705.933.9191. While I am always happy to chat about cottaging, this article is not intended to solicit clients who are currently under contract with sales representatives or brokers.
Ken Pipher
Sales Representative
Mincom Kawartha Lakes Realty Inc.
705.933.9191