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Should they make the leap to cottage country? Add to ...

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Bob, 71, and Betty, 68, Halifax

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The cottage - family haven or financial black hole? This retired couple want to spend their golden years close to the sea, and she wants to move to their vacation home full time. He worries it's too isolated and too much work. Rural bliss or real bummer?

SHE SAYS: MOVE TO THE COTTAGE

For six years now, we've owned our little lakefront cottage about an hour away from our home in Halifax, near the town of Lunenburg. It's small - about 1,200 square feet - but fully winterized, and I think it would be a lovely place to live full time. It's such a beautiful area, close to the seashore, and I'd love to do more gardening and relaxing with family and friends. My hope is to sell our current five-bedroom, three-bath house, which has become too big for us, and spend about $100,000 renovating the cottage. It's in good shape maintenance-wise, but I'd like to put a walk-in closet and ensuite bath in the master bedroom, replace all the windows and redo the kitchen with a new pantry and laundry area, plus build a garage. The only drawback to living there in the winter is the roads - the house is at the bottom of a hill, and the lane can get very icy if there's a big snowstorm. My son and our three teenage grandsons live about an hour away, and we'd like to keep the property in the family. There's enough acreage for them to build their own cottages, too.

HE SAYS: FIND A PLACE IN TOWN

I'd also like to live out my retirement in Lunenburg, but I want to be closer to medical attention. I had a quadruple heart bypass eight years ago, and while I've done very well so far, and Betty is a former nurse, I'm not sure about living at the cottage - it's 20 minutes from the nearest hospital. Emergency vehicles could still get to us there, but it would be easier if we lived in Lunenburg itself. There are a few options there. There's an 880-square-foot condo for $115,000 plus $250 a month in condo fees, but Betty thinks it's too small. There are older homes in the $300,000 range, some of which would need significant upgrading. I'd like to keep the cottage, too, but I don't think we could afford it with the latter option. We could also rent an apartment for about $1,000 a month, and we wouldn't have to worry about maintenance, but the nicer buildings won't take us because we have two small dogs. We'd like to try living at the cottage for one winter to see how it goes, but I don't know if I want to do it long-term.

Vital stats:

Occupations: Both retired; she has been working as a real-estate agent since retiring from nursing 15 years ago

Annual income: $100,000 from RRSPs, pensions, CPP and Old Age Security

Assets: Halifax home, about $285,000; cottage, worth $170,000; net worth (excluding property) about $860,000, including easily accessible investments worth about $60,000

Debts: Mortgage on cottage, $29,000 at 2.75 per cent (current payments total about $15,000 a year)



This interview has been condensed and edited.

THE ADVICE: SAFETY FIRST

Financial expert Kelley Keehn:

I'm siding with Bob on this one. A home should be many things - comfortable, affordable, a reflection of your style. One thing it must be is safe - and feel that way. With Bob's medical concerns and the remoteness of the cabin, coupled with the level of snow in your area during the winter, I'm concerned he would feel uneasy.

I think the idea of trying out cottage life for a year before making a major decision is reasonable. You could also consider living there during the non-snowy months and downscaling to a condo as mentioned.

Betty, you need to bend a little if you'd like to convince Bob to buy into the renos. I'd side with renting in town, but if there truly aren't any decent apartments that will accept your dogs, then buying a smaller condo is your only option. You simply can't afford to fix up the cottage without opting for a smaller place in town (without financing, which would be a terrible idea at your stage in life). Explore the possibility of renting out your empty places to family or friends. And before you do any improvements on the cottage, talk with a tax professional about which property would be most advantageous to be deemed your principal residence.

Kelley Keehn is the host of W Network's Burn My Mortgage ( kelleykeehn.com).



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