Summer cottage - ROI weak, but ROH (Return on Happiness) at its peak?

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Finns are famously cottage people, and I’m sure many here on the forum have some kind of summer cottage or villa at their disposal. Personally, I’ve been tossing around thoughts about a summer cottage one way or another. For several springs now, I’ve caught “cottage fever” and followed the market, but I don’t own one yet.

The alternative is renting a cottage, which from the perspective of a working family might be more financially sensible, but of course, in that case, the cottage isn’t your own.

What do the forum members think about summer cottages?

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The best investment I’ve ever made!

Sure, sometimes you wonder why you drive all the way to the other side of Finland, pay several thousand euros a year in maintenance, and ultimately end up as food for about a million mosquitoes. But then, when you get there in the summer to heat up the sauna and sit on the terrace with a cold beer in hand watching the sunset, or sit by the fireplace in the autumn twilight drinking quality whisky and reading a book, it gives you value for every euro spent.

Tip: never, ever, under any circumstances, should you own a cottage jointly with relatives. It leads to nothing but trouble.

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I personally bought a cottage nearly 10 years ago that has no electricity or running water. The fixed costs on an annual level are approximately €500 (property tax + insurance). Income is about €200 (dividends from a jointly owned forest). I’ve spent perhaps another couple of thousand on snow plowing and maintenance work during this period. I spend an average of about 2 months a year at the cottage. It’s possible to stay there in the winter as well, since a little cold doesn’t bother me. The value has remained pretty much the same. So, in that sense, it has been quite a good investment when you compare it to what it would have cost to always rent a cottage from somewhere. Although it’s always said that buying a summer cottage makes no sense from an investment perspective, in my own case, it has been one of my best investments. If there were electricity etc. and one only visits a couple of times a year, then of course it makes no sense to buy your own.

The only thing I might wish for is that there wasn’t a nearly 1,000 km drive each way; otherwise, I would be at the cottage even more, but it is what it is. From an investment perspective, it was perhaps a bit foolish to tie up most of my wealth as cash in a cottage right at the start of my investment career. It might have been smarter to accumulate capital first so it wouldn’t impact the compound interest effect so much. Of course, that was a time when I might have thrown everything into hydrogen and other hype stocks, and it all would have melted away there.

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As long as the IFRS report is in order. Father’s Beach Sauna (Isäfaijan RantaSauna). As far as RSI is concerned, it’s good for spending a Relaxing Sauna Evening (Rento SaunaIlta). How about MiFID II :grinning_cat_with_smiling_eyes:

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Travel expenses to and from the cottage must also be factored into every cottage owner’s costs. A cottage without electricity or running water is an interesting option indeed, especially since you enjoy staying there for 2 months a year. It’s surely a great way to unplug from everyday life.

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I’ve certainly never calculated those. For me, a cottage (or a car) isn’t just an expense item, but a part of life.

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I’ve often thought about buying a cottage, but so far I’ve always reached the conclusion that I don’t want to spend my holidays in the same place. I don’t need a cottage for winter use, so it would be a burden for a large part of the year. As I get older, my perspective might change, or perhaps if I lived in an apartment building.

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I act as my father’s portfolio manager, and the returns have been good enough over the last couple of years that we used the stock profits to have a borehole well drilled. Now we won’t run out of water, which often happened with the ring well during dry summers. And I didn’t have to pay a dime myself :victory_hand: A summer cottage is definitely a great euro/dopamine investment. It’s no mansion and it’s on dry land (no lakefront), but the concept is electricity, an outhouse, and a hot tub.

Edit: If the cottage is hellishly expensive, there are millions of mosquitoes, and your wife is chasing you with a frying pan, then that euro/dopamine ratio obviously doesn’t apply.

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We intend to purchase a cottage within the next few years; no specific date has been set yet, but we have been moving things in that direction, for example, by selling our detached house and becoming apartment owners.

The goal is to acquire a cottage close enough to our current residence that commuting to work from there during the summer is feasible. Otherwise, the cottage could be enjoyed whenever needed and according to our energy levels, while still having our home, bought for easy living, as a backup.

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In my case, the cottage was acquired for free back in the 1990s as my wife’s so-called “sibling share,” so it has no “acquisition value”—unless one considers that the share could have been a reasonably sized forest plot, which would have provided occasional income instead of constant expenses.

I have never calculated the costs of cottage life, but you can certainly sink as much money into it as you are willing to spend. The distance is nearly 200km, and we spend (almost) every weekend between May Day and the beginning of October there, plus vacation time.

Originally, the cottage had no electricity (the nearest transformer was too far away), and at some point, staying in a dark cottage started to get tiresome and we wanted power. We tried to get the neighboring cottages to join in, but they refused, so a long and expensive private line was run for us from the nearest transformer; if I recall correctly, it was in the magnitude of 60,000 FIM. A few years passed and, surprisingly, the power company announced that the neighbors had woken up and wanted electricity. We received several thousand euros back from the power company then, and the quality of the electricity (=voltage fluctuation) improved because a 1000V network was implemented in the area.

Then a separate lakeside sauna had to be built, and when done on a turnkey basis, the final bill including all costs (furnishings, interior decor, etc.) was around €50k. I paid for this almost entirely out of my own pocket, as my wife felt that was fair (one can have many opinions on that, since I don’t actually own the cottage).

And just so that cottage life isn’t too cheap, the power company hits us with well over €500/year in basic fees alone with zero consumption. The sum doesn’t increase much from that even when the annual electricity bill for about 1000kWh of consumption is added—meaning it’s almost irrelevant how much spot-price electricity (pörssisähkö) one actually consumes (the cottage is left unheated during winters).

Life without that cottage would be quite boring. The money spent on it is the price for that higher-quality leisure time.

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Personally, I would look for a long-term rental cabin. For example, a month or two per year. Owning your own cabin is a hellish labor camp, and if you don’t care for constant maintenance and the mandatory service weekends every spring and autumn, I wouldn’t buy one. By renting, you avoid these chores, and by investing the purchase price, you can cover the rent, at least partially.

We have a cabin as a family burden/gift, and I am considering renting it out in a way that would attract a long-term tenant who wants to keep the place in good condition. As a pure short-term rental property, a cabin is just too much trouble.

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I have seen and partially experienced a shared family cabin (though I don’t have ownership myself, the previous generation does). I’ve been able to spend time at the summer cabin since I was young and enjoyed it immensely, but the joint ownership has become a challenge, leading to issues with things like cabin maintenance. For this reason, my immediate family and I have been considering acquiring our own place for several years. Our family includes two children who are still under school age; they would surely enjoy cabin life in time and perhaps form similar memories to the ones I have.

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That’s exactly the point. The asceticism and the return to the basics of humanity are what fascinate me. It provides a recovery from the unnatural hectickness of the Helsinki metropolitan area. Afterwards, you also learn to appreciate the things that are usually taken for granted. Yeah, travel expenses can indeed be added on top. I was only outlining the direct costs associated with the cottage itself. If I rent a cottage, I usually only consider the price of the cottage rental as well.

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This is that one big question mark, and something many people fail to consider. Personally, I traveled throughout my entire youth, and I no longer have a massive burning passion for it. However, I do still travel, mainly in Northern Finland and Norway, which for a nature lover are top-tier destinations even on a global scale. You can always find new, wonderful places. I might spend a month at the cabin first and then spend a couple of weeks roaming around Lapland/Norway.

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One good thing about living in the Oulu region is that ten years ago, I found a cottage built in 2008 only about 55 km from home, on the banks of the Oulujoki river. Price levels here are relatively humane, so I got it for just over a hundred thousand—75 square meters in the main cottage plus a lakeside sauna. Not a single neighbor’s building is in sight. The yard is tick-free because it is quite rugged and sunny. It’s convenient that you can pop over to the cottage even in the evening after a workday. If I had to give up the cottage, it would feel truly terrible. My daughter doesn’t remember a single Christmas that wasn’t spent there. I keep the yard as a meadow, except for the pathways. The grass is mown a couple of times a summer. Chopping firewood is a favorite hobby. Maintaining the cottage isn’t an overwhelming task when it’s so close by.

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I also have a nearly thousand-kilometer drive to the place where my mind finds peace. Waiting there are four seasons, silence, and clean, fish-abundant waters that are drinkable right off the pier. And there is plenty of distance to the neighbors. Let’s just say that nothing comes for free, and when you drive that thousand kilometers each way in a high-quality, relatively new vehicle, you can make the transit itself a pleasure.

PS. The best investment is investing in yourself. Besides, it’s better to do it sooner rather than later :slight_smile:

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I’ve been dreaming of a cabin for a long time. Specifically a “mökki” (rustic cabin), not some fancy villa. Unfortunately, COVID pushed prices up so much that once my criteria are met, the price suddenly jumps to the level of a detached house. It has to be by a lake, and with a firm lakebed too. But maybe someday.

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An essential part of cottage life is a bit of DIY in the form of terrace building and renovations. These are difficult to carry out at a rental cottage, so there are few places where one could stand just lounging for more than two weeks. Even one hour a day of doing something completely different from office work takes your mind elsewhere, and on top of that, a sauna, hot tub, and a swim with a good beer is quite a luxury. Therefore, I don’t see renting as in any way comparable to owning your own cottage, unless even a little bit of puttering around feels like a labor camp.

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I made perhaps a bold decision just over ten years ago and bought a first cottage instead of a first apartment. An apartment has since been acquired and the family has grown. I bought the cottage at a good time, before COVID, when cottage prices had dropped slightly. I bought the cottage in November, which is also not exactly peak cottage season.

I decided to buy a cottage on the shore of a clear-water lake, in the Vuoksi water system and on the mainland. In themselves, a large and clean water system as well as road access increased the price, but they are also so-called selling points if the cottage ever needs to be sold, and they facilitate renting out the cottage, which was part of the plan from the very beginning.

In the beginning, there was a somewhat absurd amount of work in fixing up the place, but by doing it myself and with the help of friends and later the locals I got to know, the renovation work has progressed and the place is starting to be in top shape. A knowledge worker’s soul truly rests while repairing a sauna floor or painting the walls of a cottage.

By renting it out, I’ve managed to cover almost the annual loan repayments, but of course, there are also costs from road maintenance, waste management, property tax, insurance, the electricity connection, renovation needs, etc.

At this stage, we use the cottage ourselves for a few weeks and a few weekends a year, so renting is the primary mode of use, which allows for quite substantial tax deductions. I recommend considering this rental use if you are thinking about acquiring a cottage. From the beginning of June to the end of August, I have practically been able to rent out as many weeks as I’ve wanted, even though the cottage has no running potable water. Lake water is pumped to the kitchen and the sauna during the frost-free season. The cottage has an outhouse and electricity, of course, but no televisions or other amusements. This partly limits the pool of tenants mainly to nature-oriented couples and families.

Summa summarum: acquiring a cottage during a busy phase of life, having a couple of children during the first years of renovation, and an hour’s commute to the cottage was certainly a heavy equation, but now with the cottage in good condition, the kids enjoying themselves there, and the rental business working quite well, I could say the decision was the right one.

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It doesn’t make any sense, but neither does owning a Ferrari. My own cottage costs as much as a new Ferrari, but I think I get more out of it than I would from the car. It requires work and upkeep, though those could certainly be outsourced if necessary. The puttering around isn’t always fun, but the overall experience stays firmly on the plus side as long as you don’t calculate the opportunity costs (returns) of the tied-up capital too closely.

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