Buy land, build cottage, save money: simple, right? Hold that thought. There’s so much more to this real estate strategy. Building from scratch on a vacant lot can be an affordable route to owning a cottage, but sometimes it isn’t. Here’s what you need to know.
Carolyn and Chris McIntyre bought their slice of paradise on a whim. They were on their way to Carolyn’s dad’s place in Minden, Ont., when Chris started scrolling through MLS listings on his phone and came across a lot on Belmont Lake, an hour’s drive east of Peterborough. The McIntyres had friends on Belmont—where most cottages were listed at $300,000 or more—and loved it. As for the lot, it was on a tiny bay with lots of privacy and came equipped with a dock, an outhouse, and even a small bunkie that could house the family of five during construction. And at $147,000, the price was right.
So they went for it. Chris then put in some calls—to the local planning and development office and to their friends down the shore—to make sure they’d actually be able to build there. But beyond that, “it wasn’t really well thought out,” admits Carolyn.
Two years later, they’ve just managed to get electricity—a process that cost $10,000, and involved having Bell move several poles to make way for electrical wires and getting neighbours to sign off on having the new lines cross their land. “Nobody anticipated it would take that long,” says Carolyn. “We haven’t even built anything yet, and there have already been a lot of expenses.” The couple has encountered other unexpected bumps. They are still waiting for approval on their first building permit application by the municipality, which sent them to the local Crowe Valley Conservation Authority. Since the property is on a floodplain, Crowe Valley requires a land survey to determine its elevation; too low and they’ll need to truck in fill. “I thought it would be a one-stop-shop instead of all this bouncing around,” says Chris.
The municipality won’t budge on their application until the CA has signed off, but the McIntyres expect to be able to apply for permits in the next couple of months—the plan is to build a 1,600 sq. ft. cottage with two floors and three bedrooms. Barring any hiccups, they hope to get the township’s stamp of approval by early summer. Luckily, the McIntyres never had a firm deadline for when the cottage would be built. “That’s what has made it less stressful—we’re just rolling with it,” says Carolyn.
“People have something romantic in mind when it comes to owning a cottage,” says Shawn Persaud, the director of planning and development for the Township of Tiny, Ont., which encompasses 70-plus kilometres of shoreline along the south edge of Georgian Bay. But for many Canadians, that dream is fading as prices continue to rise—the average cost of a recreational property in Canada jumped 13 per cent in the 12 months prior to June 2018, according to the brokerage Re/Max Integra, to a median price of $460,500. Blame the boomers, who are cashing out their mortgage-free homes and plowing the money into vacation homes in which to retire. They’re not the only ones driving prices higher: a wave of younger buyers who’ve been shut out of housing markets in major urban centres are snapping up cottages instead.
At first blush, buying a vacant lot can seem like a brilliant solution. It’s often far cheaper than buying an existing place, and it means you get the exact cottage, cabin, camp, or chalet you’ve been dreaming of. But you still have to build the actual cottage, and be warned: navigating the rules and regulations around starting from scratch can quickly turn into a nightmare—an expensive one—unless you do your homework. “Put it this way: it’s not necessarily the cheapest way to go about things,” says Barbara Rousseau, who this past summer moved into a new cottage she built on a vacant lot on Prince Edward Island.
Before you buy and build, make sure you know what you’re getting into. Here’s what you need to consider.
Get into the zon(ing)
Zoning and development bylaws vary from province to province, municipality to municipality, and sometimes even property to property. Some of these rules are governed by the local township, others by provincial environmental legislation, and can dictate everything from the type and size of structure to shoreline setbacks to whether you can camp out in a trailer during the construction phase (spoiler alert: many municipalities forbid this). A decent realtor should know the broad strokes of what’s allowed, but before you buy, it’s a good idea to sit down with a local planning and development official to learn the nitty-gritty. “If someone doesn’t call us, or if the realtor is not up to speed on these things,” says Persaud, “they’re buying blind.”
And don’t assume the township will grant you a variance if, for instance, you can’t meet the setback requirements because your lot is too small. “Our committee of adjustment is reasonable,” says Persaud, but he has come across properties that are simply unbuildable (and hard to resell). Besides, securing a variance is costly and time-consuming. The McIntyres are mulling over applying for one that would allow them to build a bit closer to the shoreline. “The municipality will charge us $3,000 just to look at it,” says Carolyn.
The annals of cottage-country real estate are filled with horror stories of people building their dream cabin, only to later find out their living room or well was on someone else’s land. Do yourself a favour and spring for an up-to-date land survey, even if the previous owner handed you an existing one. A survey is a detailed map that pinpoints the lot’s precise boundaries. It will also mark septics and wells on your property and on adjoining ones, which might restrict where you can actually build. Around Georgian Bay, a local bylaw stipulates that you can’t install a septic system within 100 feet of a dug well or 50 feet of a drilled well (in Alberta, meanwhile, you only need 33 feet of separation from a well of either variety). Cameron Smellie, a builder based in Georgian Bay who handles multiple custom projects each year, had one client who worked with his neighbours to decommission their dug well and then drilled them a new one. “It was the only way to make room for a septic on his new property,” says Smellie. (And wells don’t come cheap—they cost as much as $25,000, depending on if you’re drilling through soil or solid rock and how far down you have to go.)
Sure, a survey will cost a few hundred to several thousand dollars, depending on the size, location, and geography of the property, but it’s worth it. “If you decide to back away from the deal,” says Smellie, “it’s cheap insurance for peace of mind.”
Choose the right builder
Before you hand over a down payment, you might want to consider having a builder check out the lot first. “I’ve had clients take the plunge on a piece of property”—which around Georgian Bay can cost upwards of $1 million—“and then call me, and their eyes get wide when I start to explain the nuances of building on waterfront,” says Smellie, who warns prospective buyers to be wary of any builder who assures you a lot is buildable just by eyeballing it. “Even if I’ve done it 30 times, I’d never tell a client, ‘You can build on this vacant lot,’ ” he says. “But I’ll tell you the due diligence you need to do yourself.”
Not every construction crew is so scrupulous. And if they’re not the ones securing the permits, they’ll assume you’ve done your research. Linda Anderson, a veteran realtor on Prince Edward Island, knows one buyer who didn’t investigate the minimum setback stipulated by the province’s Environmental Protection Act. The builder went ahead with the project—only to have to move the entire structure back when the inspector turned up. “Yeah, that cost a few dollars,” says Anderson. A client of Edmonton realtor Tom Shearer had to spend about $100,000 on excavation fees he hadn’t budgeted for because he was trying to build his dream cabin on a clay-based slope (clay can shrink or swell depending on the moisture level, causing foundations to crack or pilings to shift). That’s the kind of thing a builder can help you assess before you buy, says Shearer—likely via an inexpensive soil test.
Finding a builder you can trust—and who can give you a realistic estimate of how much a project will cost—is particularly important when you’re managing construction long-distance. Barbara Rousseau and her husband, Peter, fell in love with P.E.I.’s combination of ocean, farmland, and wide-open sky. (Bonus: it’s one of the most affordable places to buy a recreational property in the country, though non-Island residents have to get government approval to buy lots with more than five acres or with more than 165 feet of shore frontage.) But overseeing construction from her home in Kanata, Ont., a 15-hour drive away, would be a handful. To help vet prospective builders, the former project manager took an online course on construction through a local college and read several books on do-it-yourself home building. “I knew what questions to ask,” she says. She finally settled on someone, but only after talking to his references, checking out his previous work, and generally making sure they could get along throughout the process (which included a year of back-and-forth over design, placement, and permits). “There were lots of times we had problems,” says Barbara, “but I knew he would give me an honest answer.”
Be sure about your shore
Nobody wants to step into the lake and sink into weedy muck or have an otherwise glorious sunset vista blocked by scrubby cedars. But protecting natural shorelines is a prime consideration in cottage-country municipalities, since lakefront vegetation (in all its unmanicured glory) shelters wildlife, reduces erosion via underground root systems, and reduces pollution by filtering runoff. “Being a recreational municipality, protecting the shoreline is one of our biggest concerns,” says Matthew Ferris, the manager of planning and development for Lac Ste. Anne County, west of Edmonton. “The environment is a huge industry for us, and outdoor activities are key sources of revenue for the municipality.”
So don’t assume you’ll be able to alter your “imperfect” shoreline with a few loads of sand or a chainsaw. In fact, it’d be a waste of time even petitioning the municipality to, say, dredge the lake bottom or build a concrete pier, since shorelines are regulated at the provincial level. “People think they can take a Bobcat and start pushing stuff around, but you can’t just build that little beach you’re hoping to—you have to maintain the shoreline,” says Shearer, who warns that property owners can be slapped with hefty fines and be ordered to restore the land to its natural habitat (at great expense). Even some permanent docks can be problematic, and many municipalities simply forbid boathouses.
Luckily, the McIntyres first saw their property in the summer, so they knew the lake out front was weedy; in fact, it was part of what made the place so affordable. “We knew going in that if we want to swim, we’d have to go out in the boat or to the other side of the lake,” says Carolyn. So before you jump into a deal, you might want to jump in the lake first.
Know what you want
Before you fall in love with a particular design, think long and hard about how you plan to use your new place. If you’ll primarily be there on weekends, do you want to spend it cleaning five bedrooms, or will you need that extra space to accommodate friends and grandkids? If you’re planning to winterize it, are you prepared to bear the cost of year-round hydro and gas—not to mention the higher property taxes—which can be breathtakingly expensive?
When Sue Deane’s parents handed her a 20-acre slice of the family property on Kootenay Lake, northeast of Nelson, B.C., she knew she didn’t want to build a grandiose four-season cabin. She and her husband, who owns a construction company, had just built a new home in Rossland, three hours away. “Everything’s white and wood and gorgeous at home,” says Sue. She wanted the cottage to be more laid-back. So she and her dad, a retired engineer, slapped together a 20-by-18-foot cabin they call a “plywood tent.” It doesn’t have running water or electricity (putting that in would have cost roughly $20,000, or $7,000 per power pole), and if her young kids decide to draw on the walls, Sue just shrugs. “At the lake, anything goes—we can make a mess out there,” she says. “The kids love it.” The place isn’t even insured. Since it only cost $15,000 to build, “if anything happened to it, it wouldn’t be any great loss.”
A word of caution: building such a simple dwelling isn’t always allowed, and buyers should ask the municipality about minimum size requirements before they buy.
Assess your access
Sure, the property is rugged and remote. But is it too remote? How will you bring in supplies? Is it on a private road? If so, is it plowed in the winter? How much do you have to pitch in each year to maintain it? Some roads even have weight restrictions during certain times of year, especially during the spring thaw, “so it might not be possible to get construction equipment in, which can affect the cost of the build,” says Greg McInnis, a realtor in Haliburton, Ont. The McIntyres, for instance, initially thought about buying a prefab for their lot on Belmont, but the trucks wouldn’t fit down their narrow road.
Love thy neighbours (and make them love you)
If you’re about to launch into a long and loud construction project, it’s not a bad idea to get the locals on board. Steve and Chrissy Solonynko’s lot on Ontario’s Boshkung Lake, on a stretch of the old Hwy. 35, is very secluded. The property was littered with 30-ton granite boulders left behind when the township blasted out the new highway back in the 1960s, and there was no way they’d budge. Instead, the Solonynkos decided to blast them into gravel to use as the base for their cottage. The only time they could get in a crew was over a summer weekend, and they knew they needed to ease any hard feelings (and aching temples). So they dropped off bottles of wine at each neighbour’s dock. Similarly, when they had to cut down a few beloved oaks, they invited a neighbour to take the wood, since they planned on installing a gas fireplace. “You can’t ruffle too many feathers,” says Steve. Now, their dream place has become a social hub on the lake, since everyone seems to know the Solonynkos. “Chrissy and I got a lot of cred because we built 90 per cent of the place ourselves,” says Steve. “We were out there seven days a week.”
As for the McIntyres, they’re excited to finally break ground on their four-season cottage this summer—as long as the permits come through. “It’s not a quick process,” says Chris with a sigh. At least they won’t have to worry too much about disturbing the peace; part of what drew them to their lot in the first place was the fact that they have just one immediate neighbour. On the other side is unused farmland at the end of a bay. Sure, the mosquitoes can be vicious—“here in Canada, they’re our national bird,” says Chris—but at least they won’t complain about the noise.