86% of recreational property regions are reporting lower inventory as demand outpaces supply (Newswire.ca)
Since remote working is now the norm, many Canadians are moving outside of the city limits and setting their sights on the recreational property market. Cabins, cottages, lake houses, even remote properties are in high demand. While all properties are selling like gangbusters, the cottager marketplace is outselling others by a long shot.
The aggregate price of a single-family home in Canada's recreational market rose 11.5 percent to $453,046, and the aggregate price of a condominium rose 9.7 percent to $280,830. The aggregate price of a waterfront property increased 13.5 percent to $498,111. (Newswire.ca)
Is now a good time to become a cottager, or should you wait for a lull in the marketplace? Here are our pros and cons to help you make a decision.
Cottagers are in high demand.
It is not easy to find a property in this marketplace. Even though the profit that can be made at this time is better than ever before, many owners are holding tight to their properties.
According to Royal LePage chief executive officer Phil Soper, "With so few listings to choose from, owners are concerned they will have nowhere to go if they sell before buying, so they hesitate to list. This cycle makes it difficult for anyone to move ahead." (Yahoo.com)
The prices for recreational properties are incredibly high
If you can find the right property for you, you should expect to be involved in a bidding war. It has been our experience, as property investors, that the lake house you could have bought for a reasonable cost is now being listed at an extremely high price and going for way above the asking price.
Not all recreational homes are “rustic.”
The cottager industry runs the gamut from luxury properties to the rustic fixer-upper you might envision when talking about a “cabin.” No matter what you are considering, the prices are still high.
There is a market for flipping recreational properties.
With the properties in high demand, many cottagers are considering taking on fixer-uppers and/or flipping these properties. There is definitely a market for this, but as we’ve mentioned on this site before, taking on a fixer-upper is often tougher than expected. Now, with lumber being difficult to come by, we expect an additional 30% markup on the normal cost of building, and then there’s the added cost of being remote. Everything has to be brought in from afar. Large projects require machinery to be brought in, and labour costs will also increase due to the location.
Many of those considering becoming cottagers are working remotely, which adds the issue of internet service.
Development is perhaps the most logical option
Becoming a cottager by purchasing a property, or taking on a fixer-upper is incredibly expensive. Although development may be more expensive than it was in 2019, and the issue of still dealing with a remote location, you will be able to create the home of your dreams for equal or less than purchasing one of the many remote luxury properties.
At Regalway Homes, in 2021, in order to become a cottager, we recommend investing in development. It’s not a simple process. Real Estate Development involves so much more than just building, it is the ability to see a path towards the future and developing the ideas and architecture necessary for that vision. This process involves various facets including construction, architecture, law, finance, land planning, and more.
Even after the added complexities, we believe the best return on investment in this situation is real estate development. We can help you get started on this path today! Book a consultation now: https://www.regalwayhomes.com/bookings-checkout/real-estate-development/book