There are, no doubt, benefits to owning a leisure property personally- for rest and relaxation- to foster relationships with family and to take time to unwind.
Canadians are not just looking for a vacation though. According to a new poll released by Royal LePage, they are indentifying ownership of recreational properties as a smart and desirable long-term investment.
The survey reports that 89 % of current owners and prospective buyers agree that recreational properties are a good long-term investment.
Looking at this data region to region, 92 % of respondents from Alberta agreed, 91 % of Ontarians did as well, 87 % of BC residents and 81 % of people surveyed in Quebec agreed.
It seems that recreational properties hold a draw based on ROI that other types of investment do not, for many Canadians. 50 % of respondents said recreational properties provided a larger return; 29 % believe that stocks yield better returns, while 21 % were undecided.
“Canadians' confidence in recreational property values is mirroring what we have been seeing in Canada's urban centres," said Phil Soper, president and chief executive, Royal LePage Real Estate Services. "This spring, the horror stories from some fundamentally flawed international housing markets that had dampened demand for cottage-type living during the recession era, are being shrugged off. Canada's traditionally buoyant recreational property market appears to have found its groove once more."
Many of the respondents indicated that the looming presence of rising interest rates would not influence their decisions to purchase a residential property- even though it might mean higher mortgage payments.
The desire to own a recreational property is apparently so strong that many Canadians have indicated that they would cut back on spending in other areas throughout the year, so that they could afford an additional property.
In terms of other financial planning around the purchase, 51 % of respondents said that they either currently are- or intend to rent out their property to offset their mortgage and other associated costs. 32 % plan to be guarded, and protect their investment, only renting their recreational property to someone who has been referred by someone they knew.
"We are seeing more buyers purchase properties with the intent to offer them as rentals. This cost-offset strategy may allow younger families to acquire a cottage earlier in their lives than they would otherwise, and others may be able to buy in a region that would have been out of their reach, price-wise. The purchase motivation for most is not financial planning. It remains lifestyle driven - satisfying the needs and wants of their family," said Soper. "In fact, 92 per cent of those we polled agreed that a recreational property is a great way to bring family together."