Stephen Hertel and husband Daniel Rawlins were in the market for a house but couldn’t come close to affording what they wanted in Toronto. So they joined a growing number of first-time urban buyers, and they kept driving — right past the suburbs — all the way to cottage country.

The four-seasons lakefront cottage they bought in October on Moore Lake near Minden for about $500,000, has a finished basement, a double-car garage, a gourmet kitchen and a dock. Only about 150 metres off a plowed road, it has internet and satellite.

“We looked at houses in Toronto, and we left the downtown core. We went east of the Don Valley. We just couldn’t afford it. We couldn’t get anything for less than $800,000. Even then there was a bidding war,” he said.

Hertel, 49, who works four days on and four days off as a campus cop at the University of Toronto, and Rawlins, 44, a teacher, spend as much time as possible at the cottage. The two-hour door-to-door drive is less irritating than the constant bumper-to-bumper in the city he says. Some services, including gas stations, close earlier in the country, but everything’s available, he said.

“I might not be able to buy foie gras but if you’re looking for shrimp and steak, it’s all up there. Prices aren’t hugely different,” said Hertel.

While vacation properties have soared in price in recent years along with Toronto real estate, some resort areas within a two-hour drive of Toronto remain relatively affordable for couples like Hertel and Rawlins, who opted to buy a principal residence in the Haliburton area, while continuing to rent their place downtown.

Their situation is one of the trends identified in a recreational property report published by Re/MAX this week. Other priced-out urbanites are simply investing in vacation homes and renting them out. A third of those want to own or already have a cottage, seeing them as investments.

Given that 60 per cent of Canadians enjoy spending time at a cottage or cabin, but only 16 per cent actually own one, there’s plenty of demand for rentals.

“Many owners of recreational properties actually rent their principal residences in Toronto, where they live most of the year. Using their recreational properties every so often while renting them out for the rest of the year, these individuals are renting a principal residence where they live while buying where they play,” said the report.

But buying a cottage isn’t the same as buying a home in the city or suburbs, warn resort-area realtors. They counsel patience given there’s a shortage of inventory within a couple of hours of Toronto and vacation homes tend to be unique. They come with their own delights but also issues ranging from septic tanks and wells to wildlife.

“It’s very different than looking at a subdivision in an urban area (where) you’re going to be able to find 10 comparable properties,” said Jeff Strano, the Haliburton-based Re/MAX agent, who showed Hertel and Rawlins about 20 cottages over the course of several months.

People from Toronto are delighted by beautiful waterfront and nice finishes — a kind of urban rustic chic — and they will pay for it, he said.

One of his clients bought a cottage on piers on a no-motor lake. “The guy who was selling it had done all the right things with decor, and she just fell in love with it,” said Strano.

Some people just want to come up, turn the key in the door and use it. Some people will compromise because they want to be on a certain lake, and they’ll buy the fixer-upper.

“We weren’t looking for a fixer-upper, but they’re out there too,” said Hertel, citing one cottage that was so sloped “when you walked in the kitchen you could feel yourself falling.”

Their place ticked all the boxes on sight.

“It didn’t have to be the Ritz-Carlton, but it had to have some sort of appeal besides just the lake,” he said.

Retirees may be driving the overall cottage market, but that’s not the case in Prince Edward County, said Stephanie Sokolowski, owner of the County Real Estate Co. in Wellington, Ont. Her clients tend to be between 30 and 45.

“They’re buying second homes here to vacation in, and 90 per cent of them are renting them out on Airbnb when they’re not using them. So they’re using them for income potential,” she said.

One couple she worked with had saved a substantial down payment for a Toronto home and found they simply couldn’t get into the market.

While the scarcity of multiple offers means bidding wars are common in the county, it still felt less pressured than Toronto, said Sokolowski.

“It’s such a competitive market there that moving here they feel like they have a huge down payment and a lot of opportunity so they’ve decided to do that as an investment instead of trying to find a spot in Toronto and be disappointed every other day,” she said.

Affordability is the top consideration among 64 per cent of cottage buyers, according to the Re/MAX report. That is followed by waterfront access, a top consideration for 55 per cent.

But first-time buyers in Prince Edward County are less concerned with water access and will pay more for proximity to the wineries and hot eateries, including the Drake Devonshire — the hotel and dining destination that is an outpost of Toronto’s Queen St. West hot spot, said Sokolowski.

“The closer you are to the Drake,” she said, “the better it is.”

What you need to know to relax by the lake

The first long weekend of the summer inevitably has city dwellers musing on what it takes to plant their stake on a lake.

If your budget doesn’t hit seven figures you should probably keep driving past Muskoka’s namesake lake and the other two of the big three, Rosseau and Joseph, says Bob Clarke, a Royal LePage broker and builder in Port Carling.

But “if you start talking about Leonard Lake, Bass Lake, the Moon River, we have cottages that sell for half a million dollars. Maybe that’s not a starter cottage,” he said. “I’d say five years ago maybe that would have been a pretty nice cottage, but five years ago you could buy a house in Toronto for $500,000 and now you can’t.”

On a quick listings search, Clarke turns up a 700 sq. ft. cottage on an island on Otter Lake near Parry Sound for $329,000. “It’s cute. It’s got a boat house, three bedrooms and 127 ft. of (water) frontage,” he says.

There’s a 1,200 sq. ft. cottage on Doe Lake north of Huntsville for about $500,000 and a 2,600 sq. ft. cottage near Dwight on Lake of Bays for the same price.

“We have people that actually want cottages, and then we have people who have home theatres and golf simulators, which a lot of our clients would say, ‘That’s not really a cottage,’” said Clarke.

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Re/MAX agent Jeff Strano in Haliburton considers starter cottages to be in the $250,000 to $500,000 range. At the lower end, you can buy “a really rustic three-season cottage on a river or very small lake,” he said.

“At $350,000 you can expect to get an original mom and pop cottage with a septic system and hydro. Likely it will have three bedrooms and one bathroom and you’re probably going to get 100 ft. of frontage on a decent lake,” said Strano.

“Lakes are like neighbourhoods in Toronto. You buy a house in a lower-end neighbourhoodand you’re going to get a lot more house,” he said. “People with money like bigger lakes because they like to boat. The bigger lakes tend to be deeper so the water quality’s better, the shoreline tends to be less weedy.”

As listings have slowed in the Haliburton area, prices of starter cottages in the $250,000 to $500,000 range have risen. In April and May of 2016, there were 87 sales, and the median sold price in that range was $374,118. This year, there were 44 sales and with a median price of $400,550.

“The reason is simply inventory. We went from 146 active listings in 2016 to 80 this year,” said Strano.

It takes about $800,000 to get on the water in Prince Edward County, said Stephanie Sokolowski of The County Real Estate Company in Wellington, Ont.

Listings are scarce and competition is fierce around the county hot spots, she said. So while the number of sales dropped about 35 per cent year over year in April, prices fell only about 6 per cent in that period.

“You can’t buy in for much under $400,000 here, and by ‘buy in’, I mean not have to do a major, major renovation,” said Sokolowski.

You probably can’t buy a home for $300,000 in Bloomfield, although that money might get you a fixer-upper in Picton, and she said, “in Wellington you might get something that would need almost a full gut job.”

Sokolowski said she recently sold a house in Wellington for about $350,000. The 1990s split level — complete with hunter green carpet — was structurally sound but without any of the county charm that buyers covet.

Tips from the realtors who live there

Islands getaways: These properties tend to be more affordable, have lower taxes and most come with power, said Bob Clarke of Royal LePage Lakes of Muskoka Realty.

They also have fewer insects, he said.

But boat access can be an island’s curse as well as its charm. You’ve got to lug everything from your car to your boat and then up to the cottage on the other side. You’ll also pay more for gas at marinas so you’ve got to price all that out.

“If you were on Lake Muskoka, you can go shopping or to the liquor store — the two most important things in life — by boat. You can pull up to the dock and you’re good,” he said.

On the other hand, there’s nothing like arriving at the dock on Friday night in the pouring rain and spending 30 minutes swamped in a 9-horsepower “tinny,” said Clarke.

Go local and be prepared: Jeff Strano of Re/MAX in Haliburton makes a good case for using a local agent rather than taking your Toronto agent north.

“That would be like me trying to sell a condo in downtown Toronto. It’s not my area of expertise,” he said.

There are factors specific to cottage country that local agents will know — terms of easements, rights of way and septic systems — said Strano of Re/MAX North Country Realty. A city agent may not know that the lake runs low in the summer, and the buyer won’t be able to get their boat out in August.

He also advises buyers to have their finances in order before they start shopping.

“It’s really important if people are going to put the time and energy into coming up and shopping that they know what they have to work with,” he said.

“Even if you own a property, your lender will make your financing conditional on an appraisal. If (the cottage) doesn’t appraise out, to close out on your offer price, you’ll have to come up with a larger down payment,” said Strano.

There’s the added reality that because cottages are often so unique, they can be listed at prices that don’t reflect market value, which can lead to an appraisal coming in short.

Water wins: Country properties have country problems, and often those involve the septic system or the well, warns Stephanie Sokolowski of the County Real Estate Company in Wellington.

If your well is in the right spot, the water table just keeps filling it. But if it isn’t, “you have to have your wits about you or a back-up system.” That’s usually a cistern — a kind of additional tank that stores water in case the well runs dry.