Want A Rec Property? Buy or Rent as Needed?

My wife and I have just returned from a short break up in the Sunny (with occasional rainy patches!) Okanagan. Still got to play a couple of rounds of golf - so stop complaining! While there we popped into a couple of open houses - display centres (yes I do this occasionally on holiday!) just to get a feeling for what a vacation condo - either apartment or townhouse/duplex would cost. Two issues everyone faces here - 1) is there a unit in one's price and expectation range that would work and then 2) most importantly - does it make sense to lay out the necessary cash (from resources or by financing - or a combination) to own this item. What are the real issues here? Unless you have lots of cash sitting in your various bank accounts, and you won't miss a mere $400/500K and the monthly commitment to Strata fees and the annual tax payment; the main consideration is, how much will we, our family and friends get to use this? I believe that this is the single most hazy factor in the decision and that most folk will admit, in hindsight, that they overestimated this. The second part of this question is "Will we want to spend almost all our future holidays here, or will we get bored and want more variety?" To mitigate against the underuse, there is the possibility of renting to friends/ acquaintances and even total strangers. Will that income be sufficient to offset your costs or, as the economists will say "opportunity costs". The third factor is clearly, How much appreciation will this asset have in the next few years, the next 8 years or the next 20 years? Are they still building lots of these type of units? Will they still be popular in the future (i.e. will there be a demand)? The alternative is to pay the $200/night or $400/night needed to rent as needed. This brings with it the flexibility of going somewhere else next time!!

BTW we did see one that took our fancy but when we weighed it up we felt that we would'nt get enough personal use (we obviously work too hard!!) and/or it would not carry itself from the rental proceeds (option to place in "rental pool"). So, we'll carry on thinking - like so many folk - "would'nt it be nice to have.......?"

Financing your North Vancouver/West Vancouver home/investment.

This just out!! "Bank of Canada Maintains Key Interest Rate

The Bank of Canada's strategy of keeping short-term interest rates steady continued with its announcement today that it would leave its key policy rate unchanged. This is the Bank's sixth consecutive decision since May 2006 to leave this rate constant.

In its announcement the Bank commented that it deems the risks to its previous inflation projections to be roughly balanced, with the main downside risk continuing to be 'that growth in the U.S. economy could be lower than expected,' and the main upside risk continuing to be 'that household spending in Canada could be stronger than expected, largely because of borrowing against increased home equity.'

This decision means that the prime lending rate offered by most lending institutions in Canada will stay put, as will rates on variable mortgages. The Bank’s decision today does not affect the rates for new fixed mortgages, the pricing of which is determined by trading in the Canadian bond markets."

That's the formal part!! What does it mean to us? Simply put, it indicates that rates are likely to stay flat (or possibly drop a little) in the next months - many are saying that we'll unlikely see mortgage rates rising this year or into next. These 5 - 51/2% figures with some "assurance" of stability is almost as low as we've been in the past 10/20 years. I'm gonna add some "selected" snippets from the "late January" - Ipsos Reid Survey: [all " "'s are direct quotes ]

"Canadians don't expect mortgage rates to rise, but do expect housing prices to go up, says survey, with Canadians voicing 'buy now rather than later' preference."

"over half (57%) of Canadians believe mortgage rates will drop or stay the same, compared to 31% last year"

"49% of Canadians are less apprehensive about interest rate increases, compared to 44% in 2006"

"a picture emerges of confident Canadians weighing their homebuying options in a very positive light"

"the vast majority (90%) think purchasing a home is a good investment, according to the poll"

"an overwhelming majority of Canadians believe purchasing a home is a good investment. In fact, the average Canadian estimates their home has increased by 22% in the last 2 years, and the 'buy now' message is coming through loud and clear across all age groups - from 25 through to 55 plus"

"0ver half (58%) of all Canadians are saying buy now, don't wait for next year"

"Forty-four per cent (up from 37% in 2006) are looking at buying within the next 12 to 18 months"

"Of Canadians planning to buy a home in the next two years, more are likely to buy a resale home (77%) than a newly-built home (23%). This compares to 74% who favoured resale in 2006, and 26% who preferred a newly-built home"


I enjoy this type of "poll" info - unlike the "who will you vote for type poll" the responders generally give their "honest" opinions!

I think that this collective Canada "opinion" is likely damped down compared to the BC (and North Van/West Van) opinion specifically. Believe me "demand is strong"!

For full tabular results, the Ipsos Reid website is www.ipsos.ca