Key points if you want to build a cottage on an empty lot

In your search for the perfect vacation getaway, the most appealing property may turn out to be an undeveloped lot. The lure of inexpensive land can produce sticker shock, however, when it comes time to actually put up a cottage. Invariably, an inverse relationship exists between land cost and construction cost in cottage country. Highly serviced, accessible lots are more expensive than ones that can only be reached by boat or along an unassumed bush road. At the same time, construction costs are going to  be less per square foot for a lot that is easy to drive to and presents no complications for delivery of materials and access for tradespeople and their equipment.

The expenses to-do list below can help you get a handle on costs for the lot you’re considering; it’s excerpted from a book by Douglas Hunter covering all aspects of  cottage real estate, called The Cottage Ownership Guide: How to Buy, Sell, Rent, Share, Hand Down & Retire to Your Waterfront Getaway, published by Cottage Life Books. 

What you need to do

• Determine whether a lot is “finished.” This means some degree of utility service—electricity, water, sewage, land-line telephone—is directly available to the site. Often, it can also mean it is located on an assumed public road.

• If a road doesn’t exist and utilities are not already available to the site, first of all find out whether it is even possible to connect to these services. Then decide which ones you absolutely want and determine how much you will be charged to hook up (if you can hook up at all). An electrical utility may provide free connection within a certain distance of the road, but then start charging hefty rates for the linear distance to the building afterwards. (When additional utility poles are required to bridge the distance, costs can be astronomical.)

• If utilities are not available or are prohibitively expensive, figure out what you’re going to need to provide on your own (such as power, potable water, and a septic bed and tank). Check requirements with the appropriate authorities (for instance, the necessary size and setback of your septic system) and get estimates from local professionals on the costs involved. Water and waste can be big-ticket items. Spending $10,000–$15,000 on a drilled well is not out of the ordinary, and a septic system, depending on the size, style, and the site, can easily top $10,000.

• Get a grip on your design costs. If you’re not working from scratch with an architect and intend to use stock plans, you still have to buy them and then ensure, either on your own or through your contractor, that the specifications satisfy the local building code and zoning regulations.

• If you intend to have someone build the cottage for you, round up the local contractors, get references, and ask for a general estimate of building costs, based on what you envision in terms of square footage, winterizing, and foundations. You don’t need a finished set of plans. A good contractor will be able to tell you the sort of ballpark costs per square foot your dream getaway will command, before you get to a specific quote bid.

• Even if you are determined to build the property yourself, you may want tradespeople for certain phases to speed along the work. Hiring framers is a common strategy for getting together at least the shell of the building. Find out who’s available locally and what they’ll charge. Be prepared to rely on hired help more than you anticipated. Getting the basic structure up and enclosed is a major hurdle, especially before winter sets in. Once you have a roof, windows, doors, and walls, you can work on finishing the interior yourself.

• While it’s true that square footage drives cost, budgets for an individual project will vary tremendously according to labour (how much of the job the owner can take on, the logistics involved for tradespeople to access and work on the site) and materials.

• Consider managing costs by building in increments. A basic cottage can be designed and built, with an add-on wing planned for a few years later. Just be sure that your expansion can be accommodated by the applicable zoning regulations.

Construction Draw Mortgage

Have you ever though of building your own home or cottage? Here is some information on how to finance construction 

Key Features:

Customers receive funds at various stages of completion of the construction of a new owner occupied home

A first advance is available to assist with the purchase of vacant land or as equity take-out when the lot is already owned (up to 65% of the property lending value of vacant land – uninsured only)

Purpose

Customers purchasing land or requiring equity take-out on land for immediate construction of a principal residence or cottage and leisure home for their own personal use

Customers who already own their land and require funds to cover immediate construction costs prior to the first construction advance being available at the airtight stage.

Term

18 Months

Maximum 15 Month Construction Period - Construction must be completed within 15 months from the date of the 1st advance

Pricing

Prime Rate plus 1.00%

Interest Only payments (based on the amount advanced)

End of 15 Month Construction Period

Amount advanced to date will be renewed into a fixed rate or variable rate mortgage

Maximum Loan to Value Ratio

Uninsured: Up to 80% LVR

Insured 1-2 Units: Up to 95% LVR

Insured 3-4 Units: Up to 90%LVR (CMHC Only)

Eligible Properties

Land must be zoned for residential or vacation home use

Owner-occupied or Rental with a maximum of 4 units (CMHC Insured: owner-occupied only; Genworth Insured: owner-occupied only - maximum of 2 units)

Fees

Appraisal and progress inspection fees may be deducted from each draw

Amortization

Insured: Maximum 25 years

Uninsured: Maximum 30 years

Qualifying Rate

Qualifying Interest Rate will be the 5-year benchmark rate

Advances

Optional First Advance Prior to Start of Construction (Uninsured Only): 65% of the lending value of the vacant land

Optional 15% First Advance (Insured Only): At 15% complete; Excavation and foundation complete

40% First Advance Received: At least 40% complete; Roof is on, the building is weather protected (i.e. airtight, access secured)

65% Second Advance Received: At least 65% complete; Plumbing and wiring is started, plaster/drywall is complete, furnace installed, exterior wall cladding complete, etc.

85% Third Advance Received: At least 85% complete; Kitchen cupboards installed, bathroom completed, doors have been hung, etc.

100% Fourth Advance Received: 100% complete

Buying an empty lot. 8 cost considerations to help you turn vacant land into your perfect getaway

In your search for the perfect vacation getaway, the most appealing property may turn out to be an undeveloped lot. The lure of inexpensive land can produce sticker shock, however, when it comes time to actually put up a cottage. Invariably, an inverse relationship exists between land cost and construction cost in cottage country. Highly serviced, accessible lots are more expensive than ones that can only be reached by boat or along an unassumed bush road. At the same time, construction costs are going to  be less per square foot for a lot that is easy to drive to and presents no complications for delivery of materials and access for tradespeople and their equipment.

What you need to do

• Determine whether a lot is “finished.” This means some degree of utility service—electricity, water, sewage, land-line telephone—is directly available to the site. Often, it can also mean it is located on an assumed public road.
• If a road doesn’t exist and utilities are not already available to the site, first of all find out whether it is even possible to connect to these services. Then decide which ones you absolutely want and determine how much you will be charged to hook up (if you can hook up at all). An electrical utility may provide free connection within a certain distance of the road, but then start charging hefty rates for the linear distance to the building afterwards. (When additional utility poles are required to bridge the distance, costs can be astronomical.)
• If utilities are not available or are prohibitively expensive, figure out what you’re going to need to provide on your own (such as power, potable water, and a septic bed and tank). Check requirements with the appropriate authorities (for instance, the necessary size and setback of your septic system) and get estimates from local professionals on the costs involved. Water and waste can be big-ticket items. Spending $10,000–$15,000 on a drilled well is not out of the ordinary, and a septic system, depending on the size, style, and the site, can easily top $10,000.
• Get a grip on your design costs. If you’re not working from scratch with an architect and intend to use stock plans, you still have to buy them and then ensure, either on your own or through your contractor, that the specifications satisfy the local building code and zoning regulations.
• If you intend to have someone build the cottage for you, round up the local contractors, get references, and ask for a general estimate of building costs, based on what you envision in terms of square footage, winterizing, and foundations. You don’t need a finished set of plans. A good contractor will be able to tell you the sort of ballpark costs per square foot your dream getaway will command, before you get to a specific quote bid.
• Even if you are determined to build the property yourself, you may want tradespeople for certain phases to speed along the work. Hiring framers is a common strategy for getting together at least the shell of the building. Find out who’s available locally and what they’ll charge. Be prepared to rely on hired help more than you anticipated. Getting the basic structure up and enclosed is a major hurdle, especially before winter sets in. Once you have a roof, windows, doors, and walls, you can work on finishing the interior yourself.
• While it’s true that square footage drives cost, budgets for an individual project will vary tremendously according to labour (how much of the job the owner can take on, the logistics involved for tradespeople to access and work on the site) and materials.
• Consider managing costs by building in increments. A basic cottage can be designed and built, with an add-on wing planned for a few years later. Just be sure that your expansion can be accommodated by the applicable zoning regulations.

Thinking of buying land and splitting it into multiple lots? Here is how!

What is a subdivision?

When you divide a piece of land into two or more parcels and offer one or more for sale, you are subdividing property, and the provisions of the Planning Act come into play.

If your proposal involves creating only a lot or two, you may seek approval for a "land severance". For more details, see Land Severances, No. 5 in the series.

The other means of subdividing land is to obtain approval of a plan of subdivision from the approval authority. This could be the Minister of Municipal Affairs and Housing or a municipality. The authority to approve plans of subdivision can also be delegated to planning boards, municipal planning authorities, committees of council or appointed officers.

Subdivision approval ensures that:

• the land is suitable for its proposed new use
• the proposal conforms to the official plan and zoning in your community, as well as to provincial legislation and policies
• you, your neighbours and your community are protected from developments which are inappropriate or may put an undue strain on community facilities, services or finances.

Problems can result when large tracts of land are split into building lots without the benefit of a formal approval process. People have found out, usually too late, that the lots they have purchased are not on a registered plan. It may be that the water supply is unusable or the access road is not plowed or maintained. Other purchasers have found out that the ownership or title to their property is doubtful, making it difficult to sell.

Who is the approval authority for plans of subdivision?

The councils of some upper-tier, lower-tier and single-tier municipalities are the approval authorities for draft plans of subdivision. Upper-tier municipalities may further delegate the authority to approve plans of subdivision to their lower-tier municipalities. Municipalities may also delegate the authority to committees of council or appointed officers.

In all other areas, the Minister is the approval authority but may delegate the authority to approve plans of subdivision to municipalities, municipal planning authorities, or planning boards in northern Ontario.

To determine who approves plans of subdivision in your area, contact your municipal or planning board office.

What is a registered plan of subdivision?

A registered plan of subdivision is a legal document that shows:

• the exact surveyed boundaries and dimensions of lots on which houses or buildings are to be built
• the location, width and names of streets
• the sites of any schools or parks.

The plan does not show specific building locations; the rules for locating buildings are set out in the zoning by-law and shown on plans as part of site plan approval. (See Zoning By-Laws, No. 3 in the series.)

The plan of subdivision must be:

• surveyed by an Ontario land surveyor
• in general conformity with the municipal official plan and with any county, regional or district plan as well as provincial policies
• approved by the proper authority
• registered in the local land registry system.

A registered plan of subdivision creates new, separate parcels of land and can be legally used for the sale of lots. It should not be confused with "compiled plans" or "reference plans" which are used simply to describe parcels of land.

What is the process for subdividing?

If you are thinking about subdividing your property, discuss your proposal first with local Ministry, municipal, planning board or municipal planning area staff. They can tell you what information, including any special studies, you will need to provide and whether the local official plan and/or zoning by-law provide for your subdivision to be allowed or if further review as to its suitability is necessary.

Subdivision applications are made to the approval authority. This could be the Minister of Municipal Affairs and Housing, a municipality, a municipal planning authority or a planning board. You may be charged a fee for processing the application. To find out what the processing fee is in your area, contact the appropriate approval authority. Ministry, municipal, planning board or municipal planning area staff will tell you about the approval authority in your area.

As an applicant, you are required to fill out a subdivision application form provided by the approval authority.

A typical application form contains both the information identified by Minister's regulation as well as other information required by the municipality. The more information provided, the less likely delays will occur in the review.

The approval authority may refuse to accept an incomplete application. If an approval authority confirms that an application is incomplete and you, the applicant, disagree with the decision, you have 30 days to make a motion to the Ontario Municipal Board for a determination on the matter. The Board’s decision is final.

You should be aware that if you do not provide all the information identified by Minister's regulation and the municipality’s official plan, the approval authority may refuse to accept or consider your application. The 180-day time frame for making a decision also does not start. When all the identified and, if applicable, additional information is received, then the 180-day time frame begins. You are encouraged to contact the appropriate approval authority if you need help in assessing what information is required.

The approval authority, or in some cases the municipality in which the proposal is located, must give notice of the application and hold a public meeting before a decision is made. Notice of the public meeting is given at least 14 days in advance, either through local newspapers or by mail and posted notice. Anyone present at the meeting has a right to speak about the proposal.

The approval authority may consult with agencies, boards, authorities or commissions before making a decision.

How are applications for subdivision evaluated?

In considering a plan of subdivision, the approval authority evaluates the merits of the proposal against criteria such as:

• conformity with the official plan and compatibility with adjacent uses of land
• compliance with local zoning by-laws
• suitability of the land for the proposed purpose, including the size and shape of the lot(s) being created
• adequacy of vehicular access, water supply, sewage disposal
• the need to ensure protection from potential flooding.

In deciding on the application, the approval authority shall be consistent with the Provincial Policy Statement.

The Provincial Policy Statement contains clear, overall policy directions on matters of provincial interest related to land use planning and development. The “shall be consistent with” rule means that a council is obliged to ensure that the policies of the Provincial Policy Statement are applied as an essential part of the land use planning decision-making process. It is expected that the approval authority will implement the Provincial Policy Statement in the context of other planning objectives and local circumstances.

(See The Planning Act, No. 1 in the series, and the Provincial Policy Statement, 2005. Both may be obtained by visiting the Ministry website at: ontario.ca/mah or through the government offices listed at the end of this guide.)

What is a draft approval?

Having considered your application, the approval authority may either "draft approve" or refuse your subdivision proposal.

The approval authority must provide a written notice of its decision within 15 days of its decision to the applicant and each person or public body that requested to be notified. When a notice of decision is given, a 20-day appeal period follows.

If your application is draft approved, you will be advised of the conditions that need to be met to obtain final approval and registration. Conditions of draft approval may include: road widenings, the naming of streets, parkland requirements, rezoning of the area to reflect the new uses in the subdivision, and any other municipal requirements. In addition, the draft approval may also establish a time frame within which the conditions must be satisfied or the draft approval lapses.

In most cases, the developer may be required to sign a subdivision agreement with the municipality or planning board to ensure that certain services such as sidewalks and roads are provided after the plan has been registered.

Draft approval amounts to a commitment to go ahead with the subdivision, once all the conditions of draft approval have been met. Lots may be offered for sale after draft approval, but can be sold only after the plan of subdivision has been registered.

More read here

Upgrades that will increase your cottage’s value

The reasons people choose to upgrade a cottage vary, but the value and cost of those upgrades will almost always impact their decisions. If you plan to use your cottage for years to come, your choices will likely differ from those cottagers who are upgrading to sell. Here are some general rules of thumb that work for both scenarios.

The pretty, practical stuff – kitchens

Everyone loves a gorgeous kitchen, and cottage kitchens are no different. A kitchen renovation is one upgrade that’s guaranteed to add value to your property, in addition to increasing your family’s enjoyment. The kitchen is where everyone congregates and where meals are created and shared, so build for yourself before you worry about what will sell. Adequate storage and counter space are important factors, as are new appliances. But, first start by making sure that the electrical work is up to snuff.

If you’re planning a kitchen renovation with the intent to sell your cottage, don’t overbuild. Your kitchen should be appropriate for the cottage it’s in; otherwise you won’t get back what you put in. If you enjoy DIY projects, then consider repurposing your cabinetry to save money. You would be amazed at what a fresh coat of paint and some new hardware can do for your cupboards.

The smelly stuff – toilets

If you currently have a septic facility but it’s getting old, consider replacing it. Septic systems were built to last for 25 years. Over the years many properties have been expanded to the point where the system is not adequate for the size of their cottage. And who knows what some of them were made of? Your system may still work fine now, but no one purchasing a cottage wants to deal with septic issues. If yours needs an upgrade and it’s not up to current health codes, that’s one investment that will pay off. And consider a low-flow toilet if you have to replace yours. Your bottom line will thank you.

The warm stuff – insulation

The winterization trend is on the rise, and there’s never been a better time to add insulating features to your cottage. For older cottages in particular, insulation will make total sense in the walls but also the roofs and under floors. The bonus will be a cooler cottage in the summer and a warmer cottage for those crisp fall and spring days. While you’re at it, if you still have single-pane windows, now would be the time to upgrade to double panes. With year-round cottage life gaining appeal, it’s a complete no-brainer. 

The outdoor living stuff – the deck

No cottage would be complete without a deck. The deck is where you entertain or relax and unwind at the cottage. It’s not so much what it’s made of that matters, but the location, size, weight and safety features incorporated into the deck.  Your deck should always be constructed with handrails along stairs and incorporate railings into the design. The deck should be built on the sunny side of the cottage, ideally overlooking the water or other spectacular views. It needs space for your barbeque, some storage for your pillows and deck furniture, and room for all of your friends to comfortably sit and chill out. You don’t need to go crazy, although there are certainly some exceptional decks out there these days. The most important thing is that it suits the cottage, your lifestyle and your budget.