Today’s economy has everyone looking for ways to cut costs. When money is tight, family vacations and leisure-time activities often top the list of things to go.
You want to make the most of any money you have to spend. A lakeside cottage can offer years of summer enjoyment, or even all-season recreation if it’s winterized.
Others are making the most of the space they already have in the city. They’re foregoing a waterfront cottage in favour of a private “lake” in the backyard.
Almost any yard can be transformed into a functional outdoor living space. There’s a wide range of styles, sizes and materials for swimming pools, and a jaw-dropping selection of outdoor furniture, barbecues and yard structures.
“There’s a lot to be said for either option,” says Chartered Accountant Sharon Brown, a partner with Robinson & Company LLP in Guelph, “but it’s really a personal choice. Here are three important questions to help you weigh the pros and cons of putting in a pool or putting down the money on a cottage.”
1. Does it suit my lifestyle? A cottage that’s four or five hours away might not be used much. With weekend traffic, the work of a second home and the cost of duplicating an entire household, a backyard pool can seem a more attractive option.
But then again, a cottage can be rented out when you’re not using it to help offset the costs of ownership.
2. Will it add to my net worth? There’s obviously a big difference in cost between a pool and a cottage. Do both add proportionately to your personal net worth?
A choice-area cottage within an easy driving distance sounds like a safe bet. But how many people will be able to afford it when it comes time to sell? And if it’s not your principal residence at the time it’s sold, you’ll have to pay tax on the capital gain if the property has appreciated in value.
If you pass on the cottage to your children, the tax issue will arise again if the property has appreciated and it is not your principal residence.
With a pool, any appreciation in the home’s value is tax-free. But a pool is a controversial selling point. People either love them or hate them, and your property will not appeal to some buyers because of it.
3. Are there hidden costs? Any cost you have with a home, you’ll have with a cottage. But don’t underestimate the extras that come with owning a pool, either. There’s maintenance, equipment, fencing and any landscaping the yard might need after the pool’s been installed.
A summer cottage or backyard pool can be wonderful sources of family fun for many years. Make sure you choose the one that’s right for your lifestyle, income and future needs.
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The Institute of Chartered Accountants of Ontario is the qualifying and regulatory body of Ontario’s 33,000 Chartered Accountants and 5,000 CA students. Since 1879, the Institute has protected the public interest through the CA profession’s high standards of qualification and the enforcement of its rules of professional conduct. The Institute works in partnership with the other provincial Institutes of Chartered Accountants and the Canadian Institute of Chartered Accountants to provide national standards and programs that are used as examples around the world. </em>
