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Buying a cottage on lease on Crown Land

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  • May 19th, 2019 2:51 pm
[OP]
Newbie
Dec 13, 2012
10 posts
1 upvote
Winnipeg

Buying a cottage on lease on Crown Land

Hello everyone,
Our family has never owned a cabin and I only have a few friends that have cabins. I'm at the point now where my wife and I are looking to buy a cottage for our young family. I've been looking and came across one that is up for a great price. However, it is on a renewable lease on Crown Land. I'm just trying to figure out how much this would change purchasing/owning this cottage long term. This is in Manitoba.

Thanks.
8 replies
Deal Addict
User avatar
Mar 30, 2004
2518 posts
1533 upvotes
Edmonton
What you have to look at is the duration of the lease. In Alberta, I’ve seen 99 with an option of another 99. Look at the lease terms and duration, that should be a deciding factor.
The bitterness of poor quality remains long after the sweetness of low price is forgotten....
[OP]
Newbie
Dec 13, 2012
10 posts
1 upvote
Winnipeg
The one listed is for 21 years. Not very long in comparison to the 99 you’ve seen in alberta. And I’m not sure how long into the lease they are either.
I’ve read another thread for leased land on First Nations land setting they could just refuse to renew lease after the end of the lease. Is that likely to occur with crown land as well?
Temp. Banned
Dec 18, 2009
1709 posts
912 upvotes
Toronto
Bcereus24 wrote: The one listed is for 21 years. Not very long in comparison to the 99 you’ve seen in alberta. And I’m not sure how long into the lease they are either.
I’ve read another thread for leased land on First Nations land setting they could just refuse to renew lease after the end of the lease. Is that likely to occur with crown land as well?
It all depends on whichever way the political winds are blowing at the time. It's a risky game. If it's really cheap and you can maintain some level of emotional distance from the property, it might be worth it. If you can't handle disappointment in general in life, look elsewhere. You definitely CANNOT count on it as an investment or think about long-term appreciation. There's a reason it's cheap and if you try to sell it, the story will be the same.

I don't know if I could do it, especially if you end up sinking serious money into it over the years in maintenance and one day - poof, it's gone. Having that axe hanging over my head constantly would be difficult.
Deal Addict
Nov 17, 2012
4491 posts
3878 upvotes
Toronto
Is it in a Provincial Park? Whiteshell by any chance?

I know the area and know people who have cottages on Westhawk Lake. Been going there for 30+ years.

I think they’re up to around $1200 per year for fees. Cheaper than property taxes.

But what you should be looking for is a property in an unincorporated township. $75 or so a year in “taxes”.

Cottages in Manitoba are expensive sadly. Not sure why.

You might consider a longer drive and head past Kenora going East.
Deal Addict
Jan 19, 2011
3012 posts
1286 upvotes
Stop thinking about it, and look elsewhere.
"The truth is incontrovertible, malice may attack it, ignorance may deride it, but in the end; there it is."
Just a guy who dabbles in lots of stuff learning along the way. I do have opinions, and readily share them!
Deal Guru
User avatar
Jan 9, 2011
14802 posts
19737 upvotes
Vancouver
hoponpop is exactly right. This is not an investment property. Be prepared to lose it all at the end of the 21 year lease with no compensation. That doesn't mean that it's a bad deal, it might still be worth it under those terms if the price is right.

How much time do you intend to spend in it?
How much money do you intend to spend on maintenance and upkeep?
Is the lease prepaid and included in the purchase price? Or do you have to make ongoing lease payments?

How do the above factors compare to what you'd spend on renting a similar cottage instead over 21 years? Do the math and figure out what's best.
Deal Guru
Jan 25, 2007
11773 posts
6956 upvotes
Paris
Bcereus24 wrote: The one listed is for 21 years. Not very long in comparison to the 99 you’ve seen in alberta. And I’m not sure how long into the lease they are either.
I’ve read another thread for leased land on First Nations land setting they could just refuse to renew lease after the end of the lease. Is that likely to occur with crown land as well?
If it’s renewable find out about early renewals. What’s the price difference of this place vs freehold? I know in Ontario it’s usually about 300%.
[OP]
Newbie
Dec 13, 2012
10 posts
1 upvote
Winnipeg
Thanks everyone for the input. We've decided against it. We're not looking to sink that much money into it as we are looking at this long term for our kids and maybe even their kids. And torontotim, the area is Lac Du Bonnet. It isn't in a provincial park. Some of the houses/cabins there are on freehold and some are leasehold.

thanks again everyone!

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