The panoramic led circuit … in an electric Porsche Taycan !
- August 23, 2021
If I return regularly to the Eastern Townships, it is because its activities and its discoveries are as numerous as they are enticing. To discover…Read More
Why you should rent your chalet for the short term
We bet that the taste of getting a second home and having a pied-à-terre in the countryside, near a ski resort or on the edge of one of the many lakes in Quebec or the sublime St. Laurent has been even more present for the past year! Is this your case? Or do you think that this type of investment is not for you or that it is rather affordable ? Not in the case that you turn your charming chalet into a short-term rental property, while still living in it occasionally. The best of both worlds !
Admittedly, the price of cabins has literally exploded in resort areas. “Near Montreal, the lakes are already developed and it is impossible to dig others. The effect of scarcity can only push prices to rise ” , says Martin Provencher , an i estate nvestisseur seasoned for Les Affaires . He strongly believes in the yield potential of second homes, especially those located at the water’s edge . But v ere are some thoughts that Pourr have enlighten you.
Price is not subject to the control of the Régie du logement
The price of rents is not subject to the control of the Régie du logement. “It is only supply and demand that determine rental costs,” emphasizes Martin Provencher for Les Affaires.
“The competition is becoming stronger, but the demand is,” says Nicolas St-Cyr , Certified appraiser ed profession for Les Affaires.
Popularity of the moment
Whether it is out of the need to leave the city, to be in nature and as this type of holiday is now more accessible to almost all budgets, the demand for short-term rentals is growing very rapidly these days . In terms of cost and convenience – and when the rallies will be allowed again – the chalets are popular for family reunions or friends reunion, far surpassing the hotels , according to data collected by the site Hotel in the house .
More regular maintenance
Contrary to popular belief, landlords would tend to maintain more – or use a maintenance service – their rental accommodation. In theory, everything must be perfect! In addition, short-term rental use much less your property than that in the medium to long term. In short, only visitors will be inclined to spend more time outdoors and visiting than vice versa.
You might be surprised to be able to return your investment in the time to say it, to make a profit and who knows, surely to be able to benefit from it full time during retirement. The lucrative Real Estate site indicates that the profit is far superior to other rentals , up to 25% annual return . But you should also know that profitability fluctuates from month to month . The months of April and November are the months when the rental rate is lower. In order not to panic, it is best to analyze the financial results for the year.
Secondary and not primary
In the event that you want to get the most out of your investment of course, you should consider the purchase of your chalet first and foremost as an investment, and not as your home. “The less the emotional bond with your property, the more rational your business decisions will be “, as advised on the Hotel at Home website . Likewise, it is ideal to choose an investment based on market needs – possibly in demand year round and accommodating larger groups / families – and not on your personal needs. Prioritize the location in a tourist area, in order to record profits far superior to long-term rentals.
Renting in high season is almost child’s play ! The real challenge is to annualize the demand to spread the rentals over 12 months. To achieve this, you have to stand out from the crowd. ” We must always offer more to an increasingly demanding clientele,” explains Alain Rajotte , owner of second homes in Cap-à-l’Aigle , in Charlevoix for Les Affaires . For example, prioritize typical architecture (log cabin) or contemporary architecture worthy of design magazines. In addition, installing a games room with a pool table or other table, as well as a selection of board games, remains a great consideration. In the event that the property n e se does not located near a water source, an outdoor spa lets have fun even in wet weather or cold and an escape from the rest.
In exchange for a percentage of the rental income ( about 15%), a company specializing in management can take care of all or part of it. The same principle applies if you have a condo or an apartment building. The advantage lies above all in being able to invest your precious time elsewhere , but also in taking advantage of expertise that you may not have the benefit of . If your schedule is already very busy, try this option.
Retain a regular clientele
Over time, you develop the intuition to detect customers ‘ at issue’ . You have to be confident that over time a reliable and loyal clientele will show up, reducing unpleasant surprises. “My ‘ regular customers ‘ represent 40% of my reservations,” says Nicolas St-Cyr for Les Affaires .
Rent to a management company
As suggested in the Journal de Montréal , you could rent your accommodation to a company which, following the signing of a rental lease, will become the tenant and manager of your accommodation , and will try to make the place profitable through short-term rentals. term. This alternative is rather interesting for the so- called “ passive ” investor .
For a rental chalet to work, you have to devote time to it , i.e. 3 to 5 hours per week for administrative management , not to mention maintenance , welcoming tenants, cleaning, etc. . When customers call, they are often ready to book. Statistically, we improve our chances of concluding within 30 minutes of a return call. And this, for the sale of many products and services.
Buy in partnership
By forming a partnership, not only will you be able to distribute the income, but also the tasks related to the management, maintenance and supervision of tenants . For example, you could buy a cottage with a business partner, friends, or family, and rent it out when you’re not staying there. The goal also being able to complete you in your strength and this, to Délégué r tasks ( home decoration and home versus accounting for example).
Dice made to overcome
Are you afraid of renting to strangers or of the deterioration of your property , furniture and accessories ? Indeed there is a risk of mayhem or disturbance for the neighborhood. But according to the experiences of Nicolas St-Cyr and his colleagues: “About 10% of the clientele poses a problem, but their misdeeds do not harm the integrity of the property,” he assures for Les Affaires .
Taking care of a remote house can represent a clear challenge , especially during work to do. In some remote regions, the supply of professionals can be limited and therefore expensive. And this, without saying that it is more difficult to verify the progress of repair or renovation work. But again, over time and by discussing with your neighborhood, you collect the right references.
To keep in mind
Laws and regulations
Stay abreast of changing laws and regulations relating to short-term leasing, which is increasingly regulated. However, these v arie nt much of a city and a municipality to another . The obtaining permits is sometimes difficult to obtain. So be patient!
Attention to the change of vocation
Municipalities consider tourist residences to be non-residential buildings . So if you change the vocation of a chalet, property taxes could possibly increase. In addition, since fall 2019, a tax of 3.5% applies to owners who wish to rent their second home . Thus, these offered for short-term rental will also have to obtain the classification reserved for tourist accommodation. – Journal de Montreal .
And home insurance in all of this?
“As soon as you rent to strangers, there is a change in the risk assessment, an aspect your insurer will take into account,” explains Anne Morin, public affairs manager at the Insurance Bureau of Canada for Les Affaires . It is of course much preferable to inform your insurer in the event that you wish to rent your chalet. Imagine only in the event of a disaster ? The insurance could refuse to compensate you without further explanation than you had not informed them .