02 Apr Why Not Just Rent?
I am currently working with a prospective new owner at Sunrise Ridge who has been using long-term rentals to escape the harsh Prairie winters for a couple of months and enjoy the milder climate of Parksville. We went through an interesting comparison that would apply to many others in a similar position. Here is the synopsis of what we’ve discovered.
- The current winter rental rate of a two bedroom condo is $1600/mo. plus HST for a total of $5376 for three months. This rate has increased and will continue to do so over the years.
- The current maintenance fee for the two bedroom lock-off they are considering is $4236, over $1000 less than the rental expense. As they would normally only need the one bedroom A side, rental income from the unused suite (B side) would offset a portion of their maintenance, making the saving even greater.
- It is very likely that rental rates will increase in the future. Parksville is a premier vacation destination and visitors to the area continue to increase. Millions of baby boomers are planning their retirements/vacations as I write this.
- Suitable rental accommodations are not guaranteed in the future. You’ll be competing with other renters for space every year and resorts will set their rates as high as possible as their focus is to turn a profit.
- There is great potential for appreciation on your ownership. Real estate in Parksville has essentially doubled over the past 10 years according to the Vancouver Island Real Estate Board. The prices on our existing inventory are very attractive.
- The planned addition of a geo-thermally heated pool, deck and hot tub in 2012 will increase both property values for owners along with rental rates and occupancy, providing increased rental income to the owners.
- Sunrise Ridge is only half completed. More owners in the future will help to moderate maintenance fees, as many of the expenses covered are essentially fixed.
- Maintenance fees maintain property you own and are determined by the owners at the Annual General Meeting at which you will have a vote. Our owners have done a superb job of controlling expenses over the years. There were actually decreases in fees for 2012 for most owners.
- Rent pays similar expenses on property owned by someone else along with a profit if they are to remain in business.
- You can exchange your weeks at Sunrise Ridge through Interval International at over 2600 resorts around the world.
- Our Snowbird quarter shares provide 13 weeks of vacation time every year.
- This is deed and title ownership, not timeshare. Your name is registered on title along with the other fractional owners of your condo.
- Many people have purchased a number of homes during their lifetime. In your experience, has real estate been a good investment? If so, why would you rent your vacation time if you chose not to rent the houses you lived in?
- When your vacationing days are over, you can will your ownership to your heirs or sell it on the open market.
Maybe this makes sense for you as well. Do yourself a favour and come see what Sunrise Ridge has to offer.