From downtown Toronto, you can be sitting on the dock of a waterfront Muskoka property in under two hours. That’s a bit more convenient than hopping on a plane to the Caribbean, and it’s something that has a number of affluent Canadians thinking hard about the opportunity that luxury vacation properties within driving distance of the city offers as an investment as well as what they should be paying for them.
The appeal of getting away from the stress of everyday life and being surrounded by stunning scenery is as strong as ever. More and more Canadians are choosing to “stay home” for their vacations, either staying in their own homes or indulging in short-term rentals in beautiful parts of the country.
This change in the way that people vacation has, in turn, created a huge demand for luxury vacation properties. And where there is demand, there is money to be made. “Luxury vacation property is a recession-proof asset class,” says Christie’s International Real Estate in a report on the trend.
The Staycation Boom
The current situation with vacations has given rise to a new trend. This phenomenon is commonly referred to as the “staycation.” Not long ago, staycations had an uncool, get-a-clue kind of air about them. It seemed they were for the non-serious vacationers who ended up not being able to pull off a real trip. But ever since COVID-19, when intense belt-tightening became de rigueur, getaways close to home have been the destination of choice for many.
How we travel and where we go has been greatly affected by the pandemic. Though many people are now vacationing at home rather than abroad, they still appear to be opting for luxury in their quest for leisure destinations. An “evidence-based” report provided by AirDNA Intelligence—whose website boasts a partnership with 400,000 accommodation providers—declared that “the market for luxury vacation homes is growing even in an uncertain economic climate.”
The beauty and variety of what lies within our own borders are taking on a whole new appearance for most of my countrymen. World-class and interior destinations are being found, completely surprised anew, by those of us who thought we had seen all there was to see in this great land of ours.
Stunning—is the word. This world contains many beautiful parts, but this part is my part and, for a little while, it’s your part, I’d love to have you in my private space for as long as you’d like.
Investment Advantages of Luxury Vacation Homes
There are numerous benefits to be gained from investing in luxury vacation properties.
A luxury vacation home can be a very attractive investment option, offering a number of potential advantages. For one thing, these kinds of properties have the potential to make a lot of money through very short-term rentals, thanks to companies like Airbnb. At the same time, it is important to bear in mind that not all areas, even popular or high-end ones, will have a sufficient volume of very short-term rentals to make this a highly profitable venture. Equity doesn’t count in this calculation.
Additionally, properties located in desirable areas can appreciate in value as the real estate market conditions change over time. When the market is strong, luxury vacation homes can experience significant “upside potential” and sell for higher prices than were ever anticipated. If the housing market experiences a downturn, the property can still be sold and possibly at a profit. “Well-located” is the operative phrase here. If the property you buy for investment purposes is located in a well-established, desirable area, it’s always going to hold its value better than property located in a questionable area with respect to desirability.
Owning a luxury vacation home offers the chance to get up close and personal with the high life. Escaping to a second home is obviously a great perk in itself. But doing so in a home that epitomizes indulgence and escapes transforms the experience. According to Architectural Digest: “Anything that makes a vacation feel a little more like a life that exists for two weeks in the troposphere and 50 weeks near sea level is a good thing in our book.” Whether by the ocean, in the mountains, on a private island, or in the heart of a cosmopolitan city, few people regretted such an acquisition.
Making Smart Investments: What You Need to Know to Succeed
Planning and doing good research are crucial in the luxury vacation rental game. The most important factor when choosing a luxury vacation rental is where you would like to be, whether it’s in a cozy mountain home, an oceanfront villa, or something else entirely. When it comes to potential returns, the best advice is to follow the tourists.
The opportunity for high rental demand is going to be in the places where people are already going. But tourism can be fickle, and basing real estate decisions on word-of-mouth guarantees nothing. The Canadian Luxury rental property is far from foolproof, whether it’s a luxury ski chalet, a beach house, a desert mansion, or some other kind of high-end house or apartment.
One crucial thing to think about is the management of your luxury vacation home. If you live nearby and prefer to have a lot of involvement, you can manage it yourself. But that can be really time-consuming and challenging in the summertime, because, of course, you want to spend your summers relaxed and not working half days running a resort rental. So, one option is to then partner up with or hire a property management company that is able to handle all the hands-on stuff, as well as a lot of the remote, off-site stuff. Man, there are a lot of property management agencies to choose from.
You must also seriously research the area in which you plan to open your short-term rental property. A key part of performing that research involves understanding the exact local regulations that will affect your property. Some municipalities restrict the number of rental nights a property can have, some restrict the number of rentals a person can own, and some have stringent licensing procedures to follow. It pays to be familiar with these regulations.
In summary, this investment opportunity is a great one.
The opportunity to invest in a luxurious vacation home that you can also enjoy personally is greater than ever. Deciding where to buy is a matter of preference and pocketbook when seeking a return on investment.
Teaming up with a real estate agent who is an expert in luxury vacation properties can provide amazing help. What can you expect? You’ll get the kind of advice and assistance you need to make the right moves, quicken the search, and close deals that achieve your objectives. The problem is, that many folks hear “luxury” and think it’s all about finances. In reality, Canadian luxury vacation homes are an investment in “we-time.” Increasingly, people are investing as much in the memory-making potential of second homes as in their financial value.
Renewing or creating a family’s memory bank is the real payoff. If you’re going to spend the time, energy, and god-help-us misery of living through the process of negotiation and purchase, doesn’t it make sense to know what’s waiting at the other end of the rainbow? Sure it does!
