Torontonians, frustrated by their investments’ diminished returns, have turned to buying property in Picton en masse. And all indications are that their investments will be sound for years to come.
Bosley Real Estate sales agent Davelle Morrison says the numbers simply don’t work for Toronto investors anymore for reasons ranging B-20—the new mortgage rules that have redirected many would-be single-family detached buyers to the condo market—to escalating entry price points and carrying costs. But in Prince Edward County, and Picton in particular, a weekend getaway destination only a couple of hours east of The Big Smoke, a confluence of available properties and demand has drawn the attention of real estate investors.
“I purchased a fourplex there a couple of months ago and it’s cash flow-positive, even after taking into account the cost of a property manager,” said Morrison. “We’re renting to long-term tenants, with rents ranging from $867 to $950 for four two-bedroom units. Rents there are certainly not as high as they are in Toronto, but because the price is cheaper, it allows us to cash flow well.”
Prince Edward County’s vineyards, microbreweries, distilleries and restaurants have made it a major tourist attraction for vacationers from Toronto, Ottawa and Montreal. Even Sandbanks Provincial Park is rammed during summer months with campers and beachgoers.
“It looks like the Caribbean; you don’t even realize you’re in Ontario,” said Morrison.
She added that fixer-uppers can be had for as little as $250,000, while finished houses go for up to $500-550,000. That isn’t a lot of money for investors—many of whom spend more on shoebox condos in Toronto—who want to use the houses as short-term Airbnb rentals. Moreover, the county welcomes the economic spinoff.
“In Prince Edward County, there aren’t big hotel chains, and the problem with Airbnbs in Toronto is the hotel chains are upset,” continued Morrison. “Prince Edward County doesn’t have hotel chains getting upset, and they need tourists to come in to create jobs for people and spend money in the county.”
One challenge facing Picton’s renters is most lodgings are being used for Airbnb, effectively turning long-term renters into a lucrative target market. Similarly, the demand for Airbnb rentals isn’t dissipating.
Aziz Sidi is an Airbnb landlord in Picton who bought a house with an accompanying coach house for $326,000, then put another $100,000 of renovations into it. He pulls in around $2,000 during the slowest months of the year, and up to $12,000 during the peak month of July. In all, after all his expenses (including the mortgage) he averages $7-8,000 of profit a year.
“Quite honestly, the place has already gone up in value,” said Sidi. “I bought it for $326,000 and I can sell it for $400,000, and it’s only been a year and a half. The county is getting better and better every day. Every month or two, you have a new restaurant opening. A culinary school is also opening in Picton. It just keeps getting better and better and better, and it will obviously become more of a destination.”
Airbnb landlords have been known to draw the ire of neighbours, but Sidi says that hasn’t been the case in Picton because locals realize landlords are making both direct and indirect contributions to the economy.
“I’ve had no complaints, no issues,” he said. “When I bought the place, my neighbours were aware I’d be renting it out on Airbnb, and they actually offered to keep an eye on it for me. People are fantastic here. It’s a kind place.”
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