According to a REMAX report, ski resort properties have strong cash flow potential, however, interest among western Canadians is low.
“The ‘Airbnb phenomenon,’ for lack of a better description, provides the opportunity for some return when [owners] are not using the property themselves, and that’s where four-season amenities become important,” said Elton Ash, REMAX’s regional executive vice president. “The properties cash flow through winter and summer months.”
But, according to a survey conducted by Leger Marketing on REMAX’s behalf, 67% of western Canadian respondents believe the price of a resort property is proscriptive. Ash, on the other hand, says that they’re relatively affordable.
“We know a large proportion of Canadians want to buy properties,” he said. “Seventy-one percent of western Canadians interested in purchasing ski properties want four-season amenities, but that number drops down to 23% who believe they could afford it. It’s interesting because with recreation properties in general, Canadians love the outdoors.”
In the last 20 years, resort properties have diversified and now boast year-round amenities like golf courses. The report also revealed that all-season resort capabilities trumped snow level, snow quality level, mountain elevation, and proximity to restaurants and retail as respondents’ interest in resort properties.
“What we noticed with this report is more and more Canadians are looking at ski resorts as recreational properties, as opposed to just lakeside properties like you find in the Muskokas, Northern Ontario or the Okanagan.”
According to mortgage broker Iain Macfadyen of Vanderkamp Vancouver, resort properties are financing headaches and, if part of a hotel, they don’t cash flow especially well.
“They’re not super coveted,” he said. “People realize that they take on a lot of the property risk with these, and if it’s part of a hotel the running costs are high enough that they won’t see much money on renting it out. The financing on these things is also more expensive. When they see the extra interest that they will have to pay, it no longer seems like a good option.”
However, short-term rentals may prove to be the solution to both cash flow woes and inflationary housing prices.
“Short-term rentals are more popular, even out in Whistler,” he continued. “They’re restricted but people find ways around it. There are more people buying rental property as a hedge against further housing inflation because it’s been a down market.”
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