Written by Vernon Clement Jones FROM CANADIAN REAL ESTATE WEALTH
Cottage buyers are thinking more and more like property investors, according to a new poll, revealing a growing interest in renting out those seasonal digs to cover the cost of acquisition.
“Many Canadians aspire to own a recreational property because of the lifestyle benefit it provides,” said Phil Soper, president of Royal LePage, which commissioned the survey. “But potential buyers must understand how they plan to finance their purchase to ensure they can afford it.”
The Leger poll suggests they have, and it’s by renting out their cottages, cabins and beach homes.
Among intended buyers, 51 per cent said they would rent their property either to a tenant that was referred by someone they knew, or otherwise, to offset the cost of ownership. That thinking represents something of a sea change for recreational property owners. Among current owners answering poll questions, 83 per cent said they do not rent out their recreational property to offset carrying costs. Only 10 per cent indicated that they would “like to.”
Only 32 per cent of would-be owners said they were prepared to reduce their spend, with even fewer, 25 per cent, ready to buy a fixer-upper in trim the property costs.
The survey hints at the growing willingness of Canadians to take on the role of landlord in order to protect the lifestyles to which their generation has become accustomed. Those younger buyers have also seen the cost of cabins in Ontario cottage country more than double in the last 20 years as a scarcity of lakeside lots drives up property values.
But becoming a real estate investor/landlord won’t be the answer to that challenge for all buyer, said Soper.
“While renting out your property is an attractive option to improve affordability, the ability to do so profitably varies by region,” he said, in a release announcing this year’s survey. “Some areas have bylaws that restrict rental activity while other regions have strict noise regulations that might limit your ability to attract renters.”