Better than renting
A condo in a popular vacation spot, complete with modern amenities, is attractive. The opportunity to garner some cash flow when a unit isn’t required as a getaway is also appealing, and a far more convenient option than renting out units.
Leger Marketing found that 51 per cent of condo purchasers would consider renting their property to offset the cost of ownership. The proportion was particularly high in Western Canada; in Alberta, for example, 49 per cent of purchasers would consider seeking tenants.
But nationally, just 17 per cent of owners follow through on those intentions.
“I found it quite fascinating,” Soper says, quipping: “Like a lot of things in life, our intentions are often better than our actions.”
Becoming a vacation property landlord isn’t as simple as it sounds. The short-term nature of the tenancies are often subject to local laws, including bylaws governing how long a recreational property may be leased out, and the obligations tenants owe the surrounding community. There may be regulation of the modifications required to accommodate tenants, not to mention provincial landlord-tenant and accommodation legislation.
Rather than juggle the responsibilities, Soper believes many people step back from landlording in order to find other ways to fund a purchase which they consider a good long-term investment, regardless of what they do with the property.
“A lot of people, when they become faced with the daunting task ... just suck it up,” he says. “[They don’t] put the new siding on the cottage, or buy the new boat, or find other ways to scrimp.”
Top 10 Vacation Markets
Typical price for vacation properties: From $400,000 with land access
Typical rent: From $250 per night
British Columbia’s Okanagan Valley has long been a favourite destination of vacationers from the Lower Mainland and Alberta. A four-hour drive from both places, the sun-soaked valley offers sandy beaches, sunny skies and a mix of outdoor adventure and culinary tourism. Vacation properties have been a tough sell here since the recession, but values are stabilizing and good deals remain on offer. The region’s established popularity with vacationers mean the values to be had now will look good well into the future.
Typical price for vacation properties: From $250,000 with land access
Typical rent: From $200 per night
Glennifer Lake’s popularity among cottage-seekers is in its relatively affordable pricing. Alberta’s newest lakeside cottage community, prices start at $250,000 with drive-in waterfront properties running approximately $349,000. This compares favourably to Pigeon Lake, where waterfront retreats run $450,000 to $650,000 and nearby Sylvan Lake, where the same properties can top $1-million. With prices down and listings up, investors can find deals here within striking distance of both Calgary and Edmonton, as well as fast-growing Red Deer, an hour’s drive away.
Typical price for vacation properties: From $225,000 with land access
Typical rent: From $199 per night
Saskatchewan’s resource boom has brought attention to many areas of the province, opening up the north as well as turning around the fortunes of real estate markets in Saskatoon and Regina. While southerners might like the grasslands of the south, Christopher Lake offers a rustic retreat two and a half hours north of Saskatoon. With prices equal to what’s available in the south – properties here average between $225,000 and $450,000 – the location offers an intense northern experience unparalleled elsewhere.
Typical price for vacation properties: From $125,000 with land access
Typical rent: From $350 per night
The traditional retreat of residents in the Manitoba’s capital city, Lake Winnipeg offers waterfront properties in the vicinity of $300,000. The prices are on par with five years ago, but double the average of a decade ago – underscoring the location’s long-term value. While prices have plateaued, the future prospects are strong for this favoured destination. The recent strength of the Manitoba economy also bodes well for young professionals seeking a retreat here as their careers advance and discretionary income grows.
Typical price for vacation properties: From $150,000 with land access
Typical rent: From $295 per night