Covid made me realize that I can work from anywhere. And as we head into what seems to be our 10th lockdown this can’t be any more true. Last year, around this time, I started looking at cottages. Why be in the city working when you can be by the beach. Because I’m from Hamilton, we usually go south for beaches, along Lake Erie. I know Muskoka is the destination of choice for those in Toronto. I had seen a cottage for sale in Long Point for around $375K. Can you believe it! I called the realtor, but couldn’t get a hold of them, and just like that, it was sold. So I started looking around Dunville for some “lakefrontish” properties. I learned that part of the lake isn’t very clean and gets a lot of seaweed during the summer. I was looking at properties around Lake Superior, but once again, it was kinda far. I’ve also been looking out East in Nova Scotia, but haven’t made the trip out there to see how the quality of life really is.
On one of my many late-night scrolling of cottages, Realtor.ca is one of my favorite apps besides Instagram, I had found a property in Turkey point. I quickly called the realtor to see if I can view the place. She let me know that it was conditionally sold. When the deal did firm up, she reached out asking if I was looking for cottages. I said yes and that I would consider Turkey point or Long Point. She started the hunt, put me on her lists.
She found 2 potential properties within my range, so I had to see them. My mother was still in the hospital at the time. Her words of wisdom, if you like it, buy it! The first cottage, I really liked, there would be about another $30K of renovations. It was priced to sell. The other one was a little overpriced because it had been renovated, and this was the cottage I had seen on Realtor.ca months ago! The best advice I got from my realtor was to line everything up with financing and closing. So with a couple texts messages and calls, to my broker and lawyer, I was able to get financing and a 10-day closing.
Let the games begin. I was in a bidding war with an old lady. Which meant, she had the cash to spend. I went in with 20K over asking. Our first offer matched. I decided to go back with another final offer. I went another $10K higher and lost by $2K! It was a disappointing loss. My realtor then went on a mission to find me a cottage. She asked everyone in Long Point and Turkey Point. and came up with nothing. But, the other cottage I had seen had no offers on it. So I decided to make an offer $20K under asking. And within the hour, I got the call that it was mine! The universe works in mysterious ways. Because I had still lined up financing and closing from the previous offer, I didn’t need to do much with paperwork. My realtor put in the offer and it was mine.
People ask what type of financing I got. So here it is, I did the 5% down and got a variable mortgage with a rate of 1.45. Variable did scare me a bit because it meant that it will go up. But I’m an investor, so I want to have the flexibility of selling without any heavy penalties in the future. And if I believe the Bank of Canada, the prime rate won’t climb until 2023.
Now, real estate in Long Point has now become very hard to find and very expensive. Cottages are now in going for $600K+. I got mine for $450K;) If you do the math, in just a few months my property is gained $150K in value.
If I were to summarize how I bought a cottage during COVID here are my top 5 tips:
- What purpose will it serve
Will this be a primary residence? Secondary residence? Or rental property? For me, I will mostly serve as a short term rental, but when it’s not in use, I will take full advantage of it.
- Have a location and price in mind
Determine how far and how much you are willing to go. This will help your team (realtor & broker) find the right property for you.
- Line everything up
If you are seriously looking to buy, you have to do that extra work and get financing and closing ready. Your team will work with you to get you what you want. This is their job. It will make your offer more attractive to the seller because there will be no conditions with your offer.
- If you like it, buy it
What the pandemic has taught me is if you wait you will be left behind. Stock is low everywhere. There won’t be another if you wait and think about it. Someone else more fierce than you will get it. I mean, I lost to an old lady with cash to spend.
- Keep networking
Because I’m operating in an area this is foreign to me, I am really leaning on my realtor and neighbours to give me their connections. Whether it’s local plumbers, landscapers, electricians and contractors, personal recommendations are key to building successful real estate empire:)