With the housing markets in big cities like Vancouver and Toronto skyrocketing through the roof in the past decade, we’ve seen a new trend in the way that the Millennial generation deals with real estate. An extremely popular tactic of late has been to glom on to a rent controlled apartment in the city while making an investment in a farm, cabin or cottage in a more rural setting.
This is smart for a few reasons: first of all, the property will cost a fraction of what a house will cost in the city. Since the freelance economy is where Millennials make their money, often a more affordable rural home is the only avenue that is opening to them, unless they are willing to take on crippling debt that will plague them for years.
When you invest in a country house, it becomes a valuable income property when you are away, paying your rent in the city and then some. This is because peer to peer websites such as AirBnB have opened up a secondary market for people looking for vacation homes: by renting your country home on a short term basis, you stand to earn much, much more money than you would renting it long term. If you need to stay in the city for work a lot of the year, this can become very lucrative.
If the folks purchasing the country house are savvy, they will make sure to have a thorough inspection of the property performed. While some city-slickers might be awed by the awesome “vintage vibe” of the place they’re looking at, they should really be considering the septic system, the insulation, the integrity of the roof, whether there is mold or any other infestations, and so on and so forth.
Often times – if an old septic system needs extensive work, for example – so much money needs to be poured into maintenance off the top that it needs to be considered as if it were part of the house’s price. If you are the agent responsible for the listing, it’s important to keep in mind that these considerations could lead the negotiations into a long drawn out dialogue. If you’re short on listings and the deal finally goes through, you might want to tap the benefits of a commission advance in order to maintain cash flow and set up your next few deals, not to mention cover your costs.
If you are the seller, it’s easy to understand why you would be stubborn in negotiations; it’s not easy handing over the old family property to some young hipster from the city. Also, the emotional value, or the “aura” of the property may be important to you and it is often tough to say goodbye to a property, even if it is the most pragmatic decision. If, however, the house is in need of extensive maintenance, you should try and meet your buyers half-way. Millenials need a place to call home too, so try not to be too judgmental.