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Recreational Property Sales Are On The Rise

The slap of flip-flops on the dock. Cannon-balling into a cool lake. Crazy-intense family board games. Sounds like a dream—but with the spiraling costs of housing today, the simple charms of cottage ownership might seem impossible. Still, if you’re keen on a little retreat of your own, there may be hope yet. We took a look at today’s recreational property market and, to our surprise, uncovered encouraging trends and budget-friendly options.

Before looking at specifics, it’s worth pausing over some current real estate trends. Number one: thanks in part to continued low interest rates, many in the industry are seeing an uptick in recreational property sales. Such is the case for Donna Harb, a Royal LePage Estate Realty agent whose territory spans the beach town of Sauble Beach, Ont. and surrounding Bruce and Huron counties. “Where you never saw flurry, you’re starting to see far more activity, faster sales.”

A Royal LePage 2016 Recreation Property Survey confirms this trend on the broader scale: “Across the country, roughly two-thirds (67 per cent) of those polled said they have seen increases in sales over the past 12 months, and over half (53 per cent) expect sales activity in 2016 to exceed 2015 levels.” If you’re assuming retirees and Baby Boomers are doing the buying, think again. Today, Gen Xers seem to be leading cottage country sales. Royal LePage’s2016 report notes that 63 per cent of its real estate advisors identified Gen Xers (aged 36 to 51) as their most prevalent current buyer—a demographic in the midst of nurturing families, careers and paying down the mortgage.

How are these buyers pulling it off? The answer lies in one final key trend: the emergence of a new client who is on the hunt, a bit more shrewd and clear-eyed; what Farb calls an “income buyer.” While the archetypal cottage experience may still be with us—the perfect lake, the mystique of the well-loved family compound—today’s cottage buyers are also likely thinking about resale value and rental potential.

Here are some popular options we discovered, many of them very pocket-book friendly:

The rental income model

Shows like HGTV’s Income Property: On Vacation with host Scott McGillivray, illustrate the increasingly popular strategy of becoming a landlord. “Most of my clients in Sauble are ‘income buyers,’” says Harb. “They use the cottage part of the time and they rent it part of the time.” Such buyers, says Harb, are lured both by Lake Huron’s breathtaking white-sand beaches plus a brisk weekly rental market. It’s in relatively “undiscovered” areas like hers, says Farb—within driving distance of big cities but still relatively affordable—where you’ll often see robust recreational sales.

A 2016 Remax Canada survey supports the trend, noting that more than half of agents and brokers nation-wide have seen an increase in buyers planning to rent out recreational properties full or part time.

Buyers must do their homework though, stresses Harb, who ran a cottage rental business for 15 years. First and foremost in the rental market is location. When buying, you also want to look at the number of bedrooms. Beyond that, Harb says buyers must be willing to take on extra hassle—or pay a property management company to do so.

Join a cottage resort community

Condominium developments also often deliver value for money. Howard “Chip” Hall is senior vice-president of Cottage Advisors, a developer of three cottage resort communities in Maine and Massachusetts, whose target demographic is middle-income families. “We saw the middle class was getting pushed out of having the cottage experience,” says Hall.

The company’s first Canadian project, a 240-unit cottage resort community in Ontario’s Prince Edward County, is called Sandbanks Summer Village. Rather than hi-rise units, at Sandbanks, detached three-season units start around the $200,000 mark (for cottage plus lot). On top of that, there’s a $300 monthly maintenance fee, which gives access to amenities including a 650-foot private beach, heated salt water pools and tennis courts, and pays for security, activity directors and general maintenance. To offset costs, it’s also quite easy to rent out your property, Hall adds.

If there’s any compromise, it might be merely that the pronounced social vibe has less appeal for introverts. “Our people love Summer Village,” says Hall. “They’ve made true friends. They have parties in the middle of winter in Toronto, just to get everybody back together. Because they can’t wait until the spring!”

Buy a micro home

Want something a little more remote or “out-of-the-box”? Micro homes (or tiny homes) are another increasingly popular option. With eco-conscious, easy-to-assemble and affordable modules, B.C.-based NOMAD Micro Homes has become an industry leader and been featured by media outlets from HGTV to CNN.

Company founder and CEO Ian Kent talked to us about the numbers, saying a single module from NOMAD costs $32,000: “That includes all of the kitchen and bathroom fixtures and everything.” Land costs vary, of course, says Kent, and then buyers must pay for services like electricity, septic system, water, interior finishes and appliances. (Be mindful of municipal bylaws regulating minimum size requirementsthough: see page 82 for a related story.)


Finally, while it sounds simple, the ability to compromise might be one of your most powerful tools. Maybe you move your search away from the hottest cottage markets, suggests Harb. Or, like some of Harb’s clients, maybe you opt to rent in the city, and spend your entire budget on a cottage property in a more affordable area. And, of course, cottages that aren’t winterized, or that aren’t prime waterfront will likely have a lower price tag. “If you’re OK to walk to the beach, instead of being beachfront, says Harb, for $200,000 in Sauble, I can get you something!”