Know yourself, your relaxation preferences, your highway-travel tolerance, your retreat aspirations
Jennifer Podmore and Julia Smith
Sun
When they get away, the authors of this weekend’s getaway-home essay, Jennifer Podmore (above left) and Julia Smith are escaping from a workaday world very much concerned with new homes, all types, all sizes. Podmore is the managing partner of MPC Market Intelligence, a by-subscription guide to the local new-home market. Smith is a writer with the Peak Communicators public relations organization.
For three decades, the baby-boomers have been real-estate trendsetters. In the ’70s, they increased the demand for starter homes. In the ’80s, they pursued “move up” homes. In the ’90s, they renovated. Now, they want recreational property.
With the oldest boomer turning 60 this year, many members of this cohort of cohorts are planning for their retirement or are already retired.
Some are cashing in by selling their homes in major cities and making their way to quieter settings. Others are simply buying vacation homes as a legacy property for themselves, their children and their children’s children.
Whatever the individual focus, the collective consequences have hit Canada’s recreational property market with a vengeance.
The RE/MAX’s Recreational Property Report, released in April 2006, says during the first quarter of this year, baby boomers fuelled unprecedented demand for recreational properties in two-thirds of the 27 markets surveyed.
“Baby-boomers have played a key role in real estate markets across North America since the early 1970s,” a RE/MAX executive said in releasing the survey. ”It comes as no surprise that boomers have now set their sights on recreational property.”
Although the boomers are driving the demand for recreational property, Generation Xers and boomer-babies are also fuelling increased interest in getaways and retreats.
These younger consumers have made decent returns from real estate over the past decade. Their careers are growing at predictable rates and many of them are in dual-income, childless households.
While the empty nesters are demanding more in terms of amenities, location and finish, the 30-something/40-something crowd is looking for deals in recreational property.
Raised by baby-boomers, they grew up with summers on the lake or winters at the hill, and want to create their own small piece of heaven.
It follows that the increased demand for recreational property has sparked an upswing in prices, with one national survey, by Royal LePage Real Estate Services, reporting double-digit increases.
For example, in 2005, the prices of recreational chalet/condominiums, and other recreational properties all experienced an increase of about 15 per cent.
The numbers in 2006 are expected to show similar increases and the launch of Aria in Westbank, in May, is a good gauge for both consumer interest and increases in cost.
The development sold out on the first day of sale with most residences commanding about $315 per square foot. A year ago, the same property might have sold for $235 per square foot.
Additional flagship developments coming to the market, such as Veranda Beach on Lake Osoyoos, Painted Boat in Pender Harbour and Predator Ridge in Kelowna, won’t meet the demand for summer resort property and that will continue to cause prices to escalate.
Right now is a great time to enter the market. However, before you proceed, due diligence is required.
What do you need to know before you decide to buy into recreational and resort properties? The short answer is plenty.
The long answer is location, value, history, conditions, product type, area, amenities and accessibility.
For most of us, investing in a recreational property is not a monetary investment. It’s an investment in a family legacy, the long-term future and, for some, sanity. We aren’t buying a recreational property with the purposes of flipping it. Instead, we are looking to invest in a second, or getaway, home.
British Columbia has something for every recreational-property shopper, on the water and up a mountain, on the coast and or inland, back in the bush or on the ninth green, cabin, chalet, hotel suite or cottage. Accordingly, before you begin shopping, figure out what is most important to you.
Do you enjoy golf, tennis, skiing, beaches, fishing, water sports, sailing or camping? It is a good idea to find an area that accommodates your pleasures.
Besides finding an area, also consider travel time. The locations that you will get the most out of are usually only two or three hours away from your primary residence.
Torontonians like ”Cottage Country.” Winnipeggers go to the Lake of the Woods. Vancouverites head for Whistler, the Gulf Islands and the Okanagan. Albertans head for the ski/golf communities of the Rockies or the Okanagan.
Once you have your desired area pegged, you need to decide for when you are buying.
Are you a today, tomorrow or ”distant future” buyer?
n The “today” buyer pays a premium price and invests in properties or developments that can turn over the keys shortly after the paperwork is signed.
n The “tomorrow” buyer looks at places that will be ready in one to two years — cottage resorts like Veranda Beach or lot sales which require development within two to three years. Around Merritt and Kamloops, the new lakefront homes and lots for sale are numerous.
n The “distant future” buyer looks at lots and acreage that will accommodate a residence once they have the appropriate finances in place.
The next decision the recreational-property shopper usually makes is about the type of property.
Are you looking for a cottage, or a condo or a single family home? Will this be a summer or a winter home?
If you don’t have the money to purchase by yourself, have you looked into quarter-share ownership? Quarter ownership entitles owners to the use of their managed recreational property one week per month. British Columbia is already one of the top drawing provinces for quarter share ownerships. This buying trend is anticipated to become more popular in years to come.
After you have narrowed your focus and determined exactly what you are looking for, you will need to switch gears and “get to know” your potential property.
Determining the boundaries of property is fundamental in the hinterland. Get
the surveyed plan from the Land Title Office or hire a surveyor to determine property boundaries.
It is also a good idea to hire a surveyor for a home inspection. You would do this if buying a primary residence. So why wouldn’t you do it for your second home?
Zoning should also be on your recreational property radar. If you are counting on rental income, make sure you check the zoning and bylaws for renting. It is important to be clear on what you can and cannot do with your property before you move forward.
Ask the seller why they are selling: The answer may be why you shouldn’t buy. And while you are in the neighbourhood, ask the neighbours for the pros and cons of having a recreational property there.
It’s a good idea to familiarize yourself with the community because that is going to be who you are going to be indirectly spending time with.
Speaking of neighbours, find out access ways to the water and other amenities. Do you have access from your property? Will you have to cross a neighbour’s property to get access? Small community landowners have been known to post “No Trespassing” signs in public areas or build illegal fences on unknown public access roads. It’s a good idea to find out what access routes you are entitled to.
If your property doesn’t have its own water system, make sure you check the community water system. You don’t want the well to dry out during peak summer use.
You should also be up to speed on septic tanks. Make sure there is a functional septic field. No septic field or a faulty system puts a stop to most deals. On top of that, it devalues the property. It is a good idea to read up on regulations. You don’t want any nasty surprises.
And don’t forget the hidden costs. Be aware that most properties require maintenance.
Freezing water pipes, unwanted guests (usually small, furry ones) and regularly required repairs are all par for the course with recreational properties.
Researching recreational properties is a pretty big task. Luckily there are many resources available to assist you along the way: The multiple listing service (mls.ca), online research by area and community, and recreational property realty specialists.
Above all, remember that researching and buying a recreational property should be a fun process. Visit the areas you are interested in; meet your potential new neighbours.
Recreational properties are legacy properties.
We buy them not for the financial return that they can deliver us but for their intangibles; more time with family, sun-drenched summers or a couple of days in heavenly powder.
We are making a lifetime investment in the things we like to do.
So, do the research. It should be part of fun, essentially since it’s an investment in you.
WESTIN KELOWNA SALES TO START IN AUGUST
The Wickaninnish Inn in Tofino and One and Two Harbour Green on Vancouver’s Coal Harbour waterfront among their credits, BBA Design Consultants is the Westin Kelowna interior designer.
‘REVENUE OPPORTUNITIES’
The resort-project’s principals this week announced an August launch of an international sales campaign.
The 220-suite condominium-hotel “offers flexible personal-use privileges [and] hotel-revenue opportunities;” will be located on Okanagan Lake; and will include indoor and outdoor exercise facilities, a restaurant and outdoor patio.
Starwood Hotels and Resorts Worldwide Inc and Stanley Yasin of Vancouver based Saje Enterprises announced plans for the hotel in late April (“Veteran trio creates Okanagan hotel offer, Westcoast Homes, April 29). All involved expect a tentative completion of construction in the spring of 2009.
© The Vancouver Sun 2006