Tuesday, September 1, 2009

Recreational Properties Not a Good Investment?

A considerable amount of real estate activity in Collingwood and the surrounding area is centered around what are deemed to be recreational properties, be it a waterfront cottage, ski chalet or resort condominium. I have read a couple of newspaper articles of late in which recreational properties were criticized as being so-called bad investments from a financial standpoint.
One such story was penned by a disgruntled cottage owner that clearly objected to the annual expense and what he deemed as being work that is associated with owning a recreational property. Others simply felt that once you added up the annual costs for maintenance, utilities, taxes and the like then weighed them against the rate of appreciation for the property, it does not create a very good rate of return from an investment standpoint.
I was fortunate to have grown up enjoying the cottage life and to this day own a waterfront property along with my brother. Is it a sound investment? When you add up the annual costs for 5 or 6 months of sporadic use I guess that is questionable. But more specifically when I look at it as an investment I simply answer no. The reason being? It will never be sold and just like some people collect cars, art, stamps or antiques, owning anything that you will not part with can hardly be deemed a financial investment.
Many of my clients are shocked to learn that I live in Collingwood and own a cottage. To them, this is cottage country so why the need for something else? Well, everyone needs to get away from their day-to-day living and work environment at some point and for me, going to the cottage has always been a great sanctuary to escape to. I just spent four exceptional days there last week with my son and it was a great father/son experience, an investment if you will in our relationship. Further, it will be an experience that he too will share with his children some day and in my opinion you can't make a better investment than that.
Seldom do I sell a recreational property only to have the buyer(s) want to unload it a year or two later because they don't use it. Most by that time are ready for something larger because they are using it far more than they thought. A recent survey by Royal LePage found that 64% of Canadians viewed recreational property as a sound investment. Further, 55% of those surveyed said they were "willing to make compromises with regards to their financial or lifestyle choices, such as purchasing a property with family and friends, renting out their cottage, making their cottage their primary residence, buying a fixer-upper, or moving to a smaller principal home in the city" all in the name of affording a recreational property.
Financial reasons aside, in today's fast-paced stress-prone world, owning a recreational property is an investment in yourself, your family and your sanity which is why more and more people are flocking to an area that those of us who live here, all too often take for granted.

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Royal LePAGE Locations North (Brokerage)

330 First Street, Collingwood, ON L9Y 1B4


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Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.