Articles

Have you thought of a cottage?

Are you thinking of buying a cottage? An excellent and innovative real estate investment opportunity might interest you.   

Even on smaller lakes, cottages are fetching exorbitant prices. Rather than one big cottage costing over two million dollars, why not buy 90 with the lake included?

No, it’s not a location 100 clicks north of Timmins. 270 acres of excellent recreational investment opportunities including a lake, with crown lands providing additional privacy, can be found within 2.5 hours of Toronto.

Here’s the plan. The property, which provides sole land access to the lake, is carved into 90-plus lots. The next step; make the entire project a municipality-approved condominium. (The Condominium Act was recently amended to permit land lots.) Leave 30 acres for shoreline, access roads, visitor parking and beach. Apart from their parcel, each landowner owns a proportional interest in the condominium. Under their control a Board of Directors is selected to approve building plans under strict guidelines.

With eight friends, purchase the entire complex. It’s not much more expensive than a high end cottage. You each invest $300,000; a very reasonable price for 10 lots. Collectively you control the condominium. You each build on one lot and appropriate the use of the remaining nine, or selectively sell them thereafter at increasing prices. Ensure that you have proper tax advice pertaining to the principal residence exemption rules under the Income Tax Act to structure this arrangement to your advantage. Later, It can also assist in the familiar estate planning dilemma – “one cottage; more than one child to whom to bequeath it”.

This is an interesting alternative to buying a big, luxurious cottage. Save your money; buy 10 lots, pre-divided and ready to build.

Discuss your “cottage strategy” with Ian Raynor of Coldwell Banker Innovators Realty at 416-356-4158.