Canadian Recreational Property Buyers Looking To Renters To Make Dream Of Ownership A Reality
Royal LePage survey shows a disconnect between attitudes of intended buyers and current owners in regards to renting and priority features
Toronto, ON, May 16, 2012 – A survey commissioned by Royal LePage Real Estate Services showed that intended recreational property buyers have different ideas on generating income from their properties compared to the actual decisions of those who are already in the market. Often, potential buyers will consider renting as a means to finance their purchase. The survey, which was conducted by Leger Marketing, polled both current owners and those intending to buy within the next five years. In addition, although many desired features of recreational properties remained the same, the survey showed a difference in priorities among the two groups surveyed.
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. The cost of owning a recreational property generally includes mortgages, property tax, and utilities but can also include condo fees and snow removal depending on the property. However, among current owners, more than eight in ten (83 per cent) said they do not rent out their recreational property to offset carrying costs, though one in ten indicated that they would “like to.”
“Many Canadians aspire to own a recreational property because of the lifestyle benefit it provides but potential buyers must understand how they plan to finance their purchase to ensure they can afford it,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “While renting out your property is an attractive option to improve affordability, the ability to do so profitably varies by region. Some areas have bylaws that restrict rental activity while other regions have strict noise regulations that might limit your ability to attract renters. It’s important to talk to a local agent to get as much information as possible about the community you are targeting, should you want – or require – rental income to make recreational property ownership possible.”
To make the dream of ownership a reality, potential buyers also indicated they’d be willing to:
- Reduce their discretionary spending (32 per cent);
- Purchase a fixer-upper (25 per cent);
- Purchase only the land at first and then build in the future (23 per cent); and
- Purchase with friends or family (22 per cent).
When asked about the most sought after features of recreational properties, more than half of all respondents (55 per cent) ranked “quiet” as the feature they most desire. Four-season use (38 per cent) and boating/fishing (25 per cent) round out the top three most desirable features.
While the top three were consistent among current and intended purchasers, peace and quiet was more of a priority to current owners (57 per cent) than intended purchasers (47 per cent). Interestingly, four-season use was a greater priority for intended purchasers (46 per cent) than current owners (35 per cent).
“Recreational properties are an excellent way to bring families together and to help reduce the stress associated with city living,” Soper said. “This type of real estate can also be a solid investment, particularly if you are interested in a cottage or cabin on the waterfront. Recreational property supply near Canada’s urban centres is fixed while populations grow. Much like when purchasing a home in the city, it’s important to find the recreational property that will suit your needs and your budget.”
The survey was commissioned as part of the 2012 Royal LePage Recreational Property Report, an annual market analysis of recreational property prices, trends and activity in selected leisure markets across the country.
The chart below shows the typical price range for standard waterfront, land-access properties across Canada in 2012.
2012 Recreational Property Price Summary Average Price Range by Province**
Standard Waterfront, Land Access Cottage 1,000 sq feet, 3 bedrooms, 100 foot lot
AVERAGE PRICE RANGE 2012
|Prince Edward Island||
$120,000 – $200,000
$230,000 – $1,000,000
$140,000 – $1,000,000
$290,000 – $450,000
$300,000 – $650,000
$261,200 – $800,000
$110,000 – $1,000,000
The survey was completed online from April 5th to April 12th, 2012 using Leger Marketing’s online panel, LegerWeb, with a sample of 1,000 Canadians who currently own a recreational property or are looking to purchase a recreational property within the next five years. A probability sample of the same size would yield a margin of error of ±3.1%, 19 times out of 20.