Lifestyle and financial factors of owning your piece of the beach
By Carissa Halton | July 15, 2020
Imagine nightly campfires, the kids swimming off the dock, sightings of moose and deer, limited wi-fi while fishing on the lake. Do summer weekends at your own lake property sound idyllic?
David Lowe was a young father in the construction business when he bought a recreation property and built a cabin on the land. Now a Century 21 real estate agent in the Lac Ste.Anne area, many of his Edmonton clients share similar hopes. They want to get away from the buzz of the city, have their children experience the great outdoors, buy something they can pass down to their children, or retire in. The majority of buyers are families with young children or younger grandparents. And while his clients’ professions are diverse — from plumbers to retirees to surgeons — they share a dream of permanent vacation spots making family memories.
But it’s not all Kumbaya, sandcastles and afternoon porch naps. Here’s a quick primer to know if a second property is right for you:
DREAMS VS REALITY
Before you start looking, Lowe recommends being honest about your expectations, then itemizing the different costs or further research needed. For instance, do you want to:
Build new on an unserviced lot? Know that “services in the country are expensive. Budget up to $35,000 for a well and septic system, natural gas and electricity,” says Lowe.
Swim in the water? Research the conservation easements and groups active in that watershed.
Vacation in the winter? You’ll likely spend more for a four-season home.
Leave the city by five and be at the cabin for dinner at six? Know that the closer you are to Edmonton, the more expensive the property.
Renovate? Be sure you have the time, money and skills. And don’t expect to just …
Kick back and relax: Lowe recommends hiring a maintenance or management company.
“A lot of families don’t have funds to buy a secondary property and keep it just to themselves,” says Rey Salazar, a coach and financial trainer at Trust Your Talent who is also a private real estate investor. “Nor do they want to wait until they can afford it because the kids will be grown by then. So people combine having a property that they can make memories in, as well as rent it when they are not there.”
If you are considering renting your secondary property to afford the purchase, Salazar recommends taking an honest look at the following questions:
How long can you carry this if there are no renters? “Have enough reserve to cover six to 12 months of costs,” says Salazar. These costs include the mortgage, developing an emergency reserve fund, regular maintenance and insurance. It may include property management and security monitoring.
Who will manage the property? From Salazar’s experience, people who manage properties themselves often burn out, or they can’t maintain the properties to market standards for rent or re-sale. Better to hire a property manager.
How many days a year will you use it? Salazar always calculates how much per day it costs to own. It might make more sense to rent yourself than buy.
Is there rental demand for the property? Maybe you’re OK with weekends in a shack, but consider if others will pay to stay.
About 15 years ago, Lowe sold his Edmonton Westmount home and moved out to his Sangudo-area cabin full-time. He made the property work for him and with some careful planning and honest reflection, he is pretty sure there is a property out there for you too.
TYPES OF RECREATION PROPERTIES
There are a variety of price points in each segment of the rec property market, says David Lowe, a realtor with Century 21 in the Lac Ste. Anne area. The segments include:
Waterfront – Right on the water, these properties are the most in demand (read “most expensive”). Around Edmonton, the best lakes include Pigeon Lake, Lac Ste. Anne, Wabamun and Nakamun.
Lakeside – While not right on the water, these properties have access to water. Often developed into subdivisions, multiple lot options could allow for renovating, building, or simply parking an old fifth-wheel. Built a little more densely, often there are full-time neighbours who can watch your place when you’re away.
Out of subdivision – Don’t want to see another living soul at the cabin? Usually these properties are carved off of farmers’ fields. Good for dirt-bikes, nature walks and loud campfires with the whole family.