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How much does it cost to build a cottage in Muskoka?

by Emma Scott on 07 Jul 2021

Many Canadian families want to escape to the woods and spend time on the water during the summer. There is no better place to do this than Muskoka. Muskoka is a much-desired vacation spot on Georgian Bay in Ontario, Canada. Its promise of fun, and endless woods and lakes in relatively close proximity to many Ontario cities, makes this place a top pick for many families seeking to escape the troubles of urban life.

Yet people want more than a simple summer weekend getaway. A cottage's promise of tranquillity, simplicity and the ability to reconnect with nature calls to people more than once throughout the year, so access to your very own cottage is the perfect remedy.

In this article, we will cover the expected costs of building a cottage in Muskoka. This article will help you decide whether building is the best option for you, what expenses to expect, and an estimated amount you will need to invest in your new home in Muskoka.

Buying vs. building in cottage country

Nearly all vacationers dream of owning their own waterfront property in Muskoka, yet most people look to buy rather than build. But, is buying really better?

Building a cottage in Muskoka allows you to create your dream vacation home according to your preferences

Potential buyers can expect to pay a great deal of money for a cottage in Muskoka. In 2014, the Toronto Star reported that the average cost of a Muskoka cottage was between $525,000 and $650,000. Today, the average asking price for cottages is much higher on real estate websites like Royal LePage. It’s no surprise that housing prices have increased due to Muskoka’s growing popularity and Canada's booming real estate market ,especially during the COVID-19 pandemic as city goers wanted to escape to cottage country.

While a cottage in Muskoka may be your dream investment, the price for the cottage may dissuade you from buying - especially if it isn’t within your budget and does not meet your list of wants and needs. Building a cottage is a much better option for your money. Not only does it allow you to meet your list of preferences, but it also permits you to design and build your dream cottage.

In order to determine whether you can afford to build or buy a cottage, talk to a mortgage broker. Not only will a broker help determine your budget, but they will also find you the best rates available.

First step: choosing the location of your new cottage

In order to build a cottage, one will first need to purchase a piece of land to build on.

Property is one of the largest parts of a budget, and it’s no surprise that costs have increased in the Muskoka area. With more people leaving Toronto for the quiet and simplicity of the woods, available property has become scarce - especially lakefront property. The high demand and low supply have driven prices up. Now, a vacant lot can cost anywhere hundreds of thousands to over a million dollars in the Muskoka region.

The location and conditions of your property plays an important part in your budget

Similarly, land conditions can influence the price greatly. Buyers can expect to spend more if they buy a lot already outfitted with gas, water, and electricity. They will also need to consider their site conditions. A property’s grading, conditions, and location will influence the price of land for constructing a cottage. For example, a cheap property on very steep land will likely need to be graded in order to be safe enough for a building. A location that cannot be accessed by a road may need to have materials delivered by boat - a costly endeavour. At points like this, one must consider whether the more affordable lot will cost them more.

Individuals who are looking to save money may need to look at buying a property with a pre-existing structure on site. It may be much more affordable to buy a property with an old structure, demolish it, and build on top of its foundation rather than purchase an untouched site. These properties may also save a buyer from needing to level or grade their site.

Design matters: the cost per square foot

One of the best ways to determine the cost of building a cottage in Muskoka is to figure out the cost per square foot according to both the size and design of the cottage.

First, square footage is the total area or size of a house based on square feet. The size of a property will affect the estimated construction cost because the larger a new cottage is, the more materials, finishes and work need to be done to complete the project.

Similarly, the architectural design of the property influences the cost per square foot. Typically, a contractor will build homes based on pre-drawn or stock designs. It’s much cheaper to use a pre-drawn or stock house plan because the designs have already been completed, they are designed to be built quickly, and the builder has experience with these designs. It typically costs approximately $115-215 per square foot to build a cottage following pre-drawn plans in Ontario.

In contrast, clients who wish to design their cottages to their own liking will need to budget much more money. Their own contractor will need to work with an engineer to design everything in the house, all the way from bedrooms to placement of electrical outlets. The distinctive design will also require the builders to work more hours. On average, a homeowner can expect to pay anywhere from $400-910 per square foot for a custom-built family home.

The structural costs

Most people are prepared for the hard costs while they plan their cottage budget. The hard costs pertain directly to the physical composition of a building. This includes the price of wood, the foundation, a septic system, plumbing, a roof, and more. The hourly wage for builders is also included in this cost.

The best way to get an approximate cost for construction is to talk to your builders. They are experts who will be able to provide a quote with an approximate price for the job from start to finish.

Construction costs include both costs of the physical structure and design work

Costs to expect in the building process

What comes as a surprise to many people who are looking to build a home is all of the soft costs included in the construction. Most people think that all they need to expect to pay for a house is the land, materials, and workers. In reality, there are many other expenses included in the price.

One of the soft costs people do not expect is interior design fees. Interior finishes like countertops, cabinets, bathroom fixtures, and even paint colours are important details that are typically overlooked while creating a budget, but they are crucial to turning a cottage into a welcoming vacation home.

Other unexpected costs that should be planned for include administrative, legal and service fees. Here are some fees to consider while planning your budget:

  • Environmental assessments to determine how your project could impact the surrounding environment
  • Building permits to ensure all construction is legal and approved of by the local municipality
  • Contractor, engineer and architecture fees for consultation, design, project management and such on
  • Installing gas, water and electricity services on an unserviced or vacant lot
  • Any repairs or adjustments that may be needed throughout construction


Real estate fees

Although you may not be buying a home in Toronto, you can still expect to pay many of the fees typically included in the sale of a home. A thousand dollars or more can be expected to be paid towards title insurance, the biannual or annual cost of property tax, and realtor fees.

A mortgage, insurance and down payment will also be needed to cover the price of building a cottage on the lake. We recommend learning about construction mortgages and using your equity in your primary home to afford your vacation home.

The average cost of building a cottage in Muskoka

Overall, building a cottage in Muskoka is a large investment, but is worthwhile for many. Those who want to frequently escape to the lake and have their own room to roam in Ontario's cottage country can expect an approximate starting cost of several hundred thousand dollars to build a cottage in Muskoka. This number varies depending on the property cost, site conditions, design, and cottage size.

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