COTTAGE CASH
Websites that make rentals easier are giving owners of recreational properties a way to help cover the cost of ownership, report says,
The equity from high-priced city homes is helping feed the cottage real estate market at the same time popular websites are helping investors rent out their rural properties to help manage the cost.
The 2016 Recreational Property Report from Re/MAXshows that cottage buyers, who may not plan to live in their retreat until retirement, are finding web-based rentals a big enhancement to managing their expenses and properties in the short-term.
More than half the 50 Re/MAX agents and brokers surveyed for the report reported seeing an increase in buyers who were planning to rent out their cottage full- or part-time.
More than half — 58 per cent of 1,576 Canadian respondents to a May 24 and May 26 Leger survey — agreed that websites are making it easier to rent out properties for cottage buyers who are using the equity from their full-time homes to make a recreational purchase.
“People continue to tell me they’re usually pleasantly surprised. It is an easier process than it was in the past,” said Pamela Alexander, Toronto-based CEO and regional owner of Re/MAX Integra.
“Videos, pictures and Google maps are just making the process a whole lot easier.”
Renting out a cottage makes it a more affordable proposition for cottage buyers.
“The average Canadian is starting to think (it’s) a little bit of a business. We’re seeing that buyers sort of have that in their back pocket when they’re thinking of purchasing a recreational property,” she said.
That’s especially prevalent among baby boomers, she said.
“Maybe they’re not ready to use (the cottage). They’re thinking about it and saying, ‘We’re going to retire seven, eight years from now but we love this property, how can we make it work and still keep our home?’ ”
But a cottage, like any investment, has costs.
“These days you have to have television if possible. You also have to be sure you have access to a handyman, so if the toilet plugs or this doesn’t work there is some- body,” said Alexander.
Vacation rental site HomeAway has grown to 1.2 million property listings from about 60,000 in 2006, said spokesman Adam Annen.
The company allows owners to post up to 24 pictures of their property on the site. Its “new-to-renting” sub-site offers step-by-step tips on how to run the business, including contracts and payments, and how to make it attractive to potential renters.
It also provides community forums where other owners can provide tips: “Questions from, ‘What do I put in my rental agreement’ to ‘What kind of bedsheets’ and ‘Is there a preferred laundry detergent I should put in my rental,’ ” said Annen.
When it comes to finding the right tenants, he advises that there’s no substitute for a phone call and plenty of communication between owners and renters to ensure the home will be used appropriately and that the renter is actually getting a property that fits their needs. The Re/MAX report shows Grand Bend on Lake Huron as one of the hottest recreational property markets in the country, with a 51.82 per cent year-over-year increase in median prices of non-waterfront homes.
Waterfront homes average $730,000 there, according to Re/MAX, and nonwaterfront properties average $375,000.
Toronto-area buyers have discovered Lake Huron in recent years, according to Doug Pedlar of Re/MAX Bluewater Realty in Grand Bend.
“You see people selling their home in the Toronto area and west GTA. They’re getting good money and coming out here and buying a beautiful house for $400,000 or $500,000 and that’s been driving the market,” he said.
New beachfront condos in the area are going for $370,000 to $400,000, said Pedlar.
“It’s not hard to find $400,000 a short walk to the beach.”
“People continue to tell me they’re usually pleasantly surprised. It is an easier process than it was in the past.” PAMELA ALEXANDER RE/MAX INTEGRA, ON RENTING OUT PROPERTIES