Renting a home away from home – as opposed to buying a condominium, house or other property – is increasingly on the radar for retirees looking to escape the harsh Canadian winter.
With the sinking Canadian dollar and housing costs steadily rising since the U.S. crawled out of the 2008-09 recession, purchasing property in the U.S. Sunbelt and other popular warm-weather parts of the world appears to be getting further out of the reach of many Canadians. As a result, many are looking more at alternatives such as leasing or renting, cutting back the amount of time spent away from their permanent homes, or even forsaking travel outside Canada altogether.
The low loonie, hovering around 75 cents (U.S.) in recent months (a far cry from when it was around par or above the U.S. greenback at various times between 2010 and 2013), appears to be the driving reason these days for avoiding U.S. home property purchases.
But many Canadians also prefer to rent for other reasons, even though the accommodations route can come with its own set of irritants and problems.
Allan Brender, a retired actuary living in Toronto with his wife, Freda, says they have rented different condo units in the same area in Pompano Beach, Fla., over the past seven years, mostly because "we don't want to be tied down, and we always had this idea that we'd go somewhere else. We also didn't want the responsibility of taking care of a place while we're away."
As well, says 76-year-old Brender, they like having fixed costs for the four months they're in Florida – this year, they'll travel to Pompano Beach in December, and pay about $2,400 a month for a three-bedroom condo in an area where they tend to see the same couples, many of them Canadians, every snowbird season.
The rent-rather-than-buy mentality isn't going unnoticed in housing-sales circles, according to former Ottawa resident David Ivkovic, who's now with Keller Williams Realty-Studio City in Los Angeles and is chairman of Canadians Abroad, a non-profit social and networking organization for expatriates living in Southern California.
"Since we moved here five years ago right at the peak of the recession, 90 per cent of my clients were Canadian, but since January of last year, that has died off a lot," says Ivkovic, who relocated to California with his wife, an actress originally from Toronto, in 2010.
"I still have a lot of Canadian clients, but the amount of purchasing here [even in popular snowbird communities such as Palm Springs] has definitely dropped off, and a large reason for that is the Canadian dollar," he says on the phone from Los Angeles.
The same marked drop in Canadians purchasing properties across the border is also happening in Florida, says Scott Voelker, a realtor with EWM Realty International's Nancy Batchelor Team and Miami Waterfront Experts.
"It's getting to the point where it's making more sense to rent," says Voelker. "Real estate is getting so priced out of the market for the middle class that unless you're really wealthy, you can't afford to have a place," especially in pricier destinations such as Miami and Palm Beach in Southern Florida, where construction put on hold during the recession is now back in full swing. "Renting also means avoiding property taxes and insurance, which are also way up compared to five years ago when Canadians were snapping up condos and homes postrecession."
Denis Leroux, a retired Canadian government employee living in Ottawa, says he and his wife, Dale, have both rented and owned accommodations at separate times in Florida – and see advantages and disadvantages to each.
Leroux, 58, says that after retiring about three years ago, they at first rented a condo in a gated community on a golf course in Fort Myers, for about $2,100 a month from late in 2012 to March of 2013.
"Renting was good enough for us to debate whether or not we should buy," he says. "The debate was if we were going to spend that kind of money to rent and we planned to return, was it better to rent or buy?"
Given Leroux and his wife had previously rented a condo one year that the owner decided to subsequently sell, meaning they couldn't secure it the following snowbird season, they purchased a 1,100-square-foot condo on a golf course in Fort Myers for $93,000 – which he estimates was about half its value before the recession in the late 2000s. They also were paying roughly $650 a month in golf course and condo fees, and about $1,000 annually in property taxes.
After about two years, they sold the condo, at a profit of about $20,000, not so much for financial reasons, but more so to spend time with their children – a daughter in Fort McMurray, Alta., and her fiancé, a new RCMP recruit, and a daughter in Kingston and her new baby girl.
Among the downfalls of renting is the seemingly stiffer competition to secure housing, something both Brender and Leroux, as well as others in their separate circles, have experienced.
To deal with the renting crush, Brender has a real estate agent who specializes in the Pompano Beach area who searches for him. He also actively looks on Florida rental sites several weeks before he and his wife plan to start their getaway, although some snowbirds book their rentals a year or more ahead of time.
Scan one of the free online ad sites such as Kijiji and Craigslist, rental marketplaces such as FloridaSnowbird.com, and short-term rental specialists such as San Francisco-founded Airbnb and Texas-based VRBO (Vacation Rentals by Owner), and you'll find many pleas from Canadians looking for temporary accommodations. This one was posted (with wording as written) Sept. 21 on Kijiji: "2 Snowbirds looking for full season rental in the Clearwater, Oldsmar, Tarpon Springs area [of Florida]. We have rented the past 6 winters but and have Excellent referances but due to the exchange rate we are looking at different options this year. Would like to pay in Canadian funds or approx 800 to 1000 US. We are flexible. Maybe purchase if the lot rent is low. Mid to end of Nov till May16."
Such queries for affordable rentals have prompted VRBO, for one, to target snowbirds and seniors in its marketing to rental-property owners, saying in its online literature: "If your home tends to attract the senior crowd, it is likely that they will book sooner rather than later. Developing a relationship with your renters, especially retired seniors, could mean longer term bookings in the future."
But the growth of such online and other rental businesses has highlighted some issues surrounding short-term rentals, including their legality, opposition to them and extra taxes levied on property owners who rent for so-called transient reasons.
Many municipalities, as well as condominium and homeowner associations (HOAs), have strict laws forbidding short-term renting (which generally is considered anywhere from less than three months to less than one year) – meaning snowbirds must either commit to staying for an extended period of time, or find ways to get around it.
Voelker notes that Broward County (incorporating Miami, Hollywood, Fort Lauderdale, Pompano Beach and other municipalities) slaps an extra 5 per cent "transient tax" on property owners who rent short term. Some municipalities themselves may add their own such tax to the bills of owners, who tend to pass the cost on to their renters, he says.
For many reasons, Leroux says, he and his wife, who are moving to Kingston in December after the home under construction they bought is completed, don't plan to go either the purchase or rental route outside Canada.
"If we ever were to buy, it would be years from now, and we would look elsewhere out of curiosity," he says. "We know some people have gone to Arizona and Portugal where it can be pretty cheap. We would definitely rent and not buy to start off with.
"While it was the right decision at the time to buy our condo [in 2013]," he adds, "renting is so much easier. But you have to weigh what's better for yourself – because trying to look for a place can sometimes be a horrendous experience."
Advice for renters
For snowbirds planning to rent, the following are some other tips and things to watch for:
Look to share a place: If you don't want to commit to an extended stay required by short-term rental rules, try booking a place with another party. For instance, Brender says he knows of two couples who booked one condo in Fort Myers for three months – each couple spent half the time there.
Watch for extra costs, restrictions: Ask the property owner if there are any costs on top of the rent. For instance, the Brenders had to pay electricity, and some years have paid to install Internet service. He says he has put down a $500 deposit from which electricity bills are paid, and then gets the remainder of the deposit at the end of the rental. One snowbird he knew, who was in a gated community with a golf course, wasn't allowed to use the golf facility or restaurant on site because he was a tenant.
Make a list, check it twice, make a friend: Renting usually means having to pack everything you need each time you go away. Make sure you have enough medications for the time you'll be abroad, have sufficient medical insurance, and bring all necessary belongings. If you know you'll be returning to the same property or area, ask a friend you've come to know at the location if you can store any larger belongings there that aren't provided at the rental.
Drive rather than fly, if possible: You may be limited bringing everything you need if you take a flight to your rental. If you're going for a good length of time, driving your own vehicle there or renting one (if the cost is worthwhile) means you'll be able to fill your car with necessary items (although be prepared to be questioned by border-crossing officials).