Do cottages make sense for retirees?

If you are fortunate enough to own a cottage during your working years, it may be tempting to hold onto that property and later use it as a retirement destination. Unless one is living in an assisted living or Alzheimer’s care community, such an idea sounds reasonable, but financial experts say that converting a cottage into a retirement home may not make financial sense.

According to a recent article on, potential cottage owners need to research the maze of data before purchasing anything. They need to look at how much they are putting down as a down payment, what their mortgage costs are, whether they plan to rent it out, property taxes, maintenance, and more. For many people, the amount of money being put into a second home would be better invested elsewhere, such as stocks or mutual funds.

The news article reports that with cottages, rental income typically does not offset the costs of maintenance, taxes and inflation, and in most cases, is not worth it, and any tax benefits will not be substantial enough to make up the difference.

Overall, according to the media outlet, Baby Boomers and soon-to-be retirees should keep their money in liquid assets so they can make an informed decision once they retire.