The appeal of vacation properties skyrocketed during the COVID-19 pandemic, as Canadians looked for getaways closer to home.
On Episode 18 of REAL TIMEwe spoke to Heather Bayer, a vacation rental expert, broadcaster and co-founder of Vacation Rental Formula, to hear her insights into the current landscape for vacation properties in Canada.
Bayer walked us through how she got started in the industry, and what continues to motivate her now more than 20 years later. We also heard about how the pandemic has impacted this niche industry, and how she sees the rest of 2021 playing out as travel restrictions continue to shift, both domestically and internationally.
Working with clients
Vacation properties may be a niche, but its an area your clients may be interested in exploring. As a REALTOR®, you should be armed with the knowledge they need to succeed.
Bayer says it’s important to understand what your client’s goals are for the property. Is it an investment property? Or will they be using it themselves occasionally?
“For example, a nice riverside property that is rentable year-round may suit somebody who wants to get as much rental income as possible because a river property will rent. It’ll rent really well, but it may not suit a family who wants to use a Sea-Doo or go water skiing,” says Bayer. “They will be better off getting out onto a lake. Whereas rental guests in general don’t have their own boats, so they have different needs. It’s a matter of assessing the needs of the owner and telling them about the different types of things that guests want because often what owners want and what guests want are very, very different.”
Based on her own experience buying vacation properties, Bayer suggests REALTORS® should be prepared to answer these eight questions to help their clients find the right property.
What’s the best area to buy for getting the best rental occupancy?
If your clients are interested in year-round occupancy, don’t show them properties that are only accessible by dirt road or water access.
Locations close to winter sport amenities or spas might be a better fit for their goals.
What rental rate should I expect in each location?
“That’s just a matter of researching what’s being charged for different styles and types of property,” says Bayer.
What do rental guests look for in a vacation property in this location?
“Your knowledge of the tourism demographic is important,” says Bayer.
If you’re in a strong winter rental market, maybe a fireplace is more appealing than a sunroom.
Do you know of anybody who can manage the property in my absence or who can manage a property for me?
“That’s all about talking to local property managers, rental managers and finding out what services they offer and perhaps going into some referral partnership or something like that,” says Bayer.
This comes back to your (digital) rolodex of professionals you trust. During your career, you’ve built relationships with a variety of professionals so you always have someone you know you can refer clients to—be it property managers, lawyers or home inspectors.
Are there any restrictions due to zoning or bylaws?
“Every REALTOR® needs to know what restrictions there are in any area because these restrictions are becoming more commonplace. Awareness of zoning, bylaw restrictions, anything that’s there and also anything that’s upcoming,” says Bayer.
How is rental income taxed?
“I always refer people to an accountant, but you will get asked that question,” says Bayer. Having some basic knowledge may be helpful, but it’s good to have a list of trusted professionals you can refer clients to, as mentioned earlier.
What is the seasonality of rental activity in the location?
“Just go into the local tourism office. They will usually have that information on the inbound traveler demographic. Low and shoulder season vacancies can really impact a bottom line,” Bayer says.
Who is this rental property’s demographic?
“Is it a driving location? Is a domestic market? Is it predominantly flying? What’s the age demographic? How long do they stay? Do they stay for short, two nights? Do they stay for weeks?” These are questions your clients will wonder, says Bayer.
From helping your clients find their own vacation property, to what the next year may hold, tune in to Episode 18 of REAL TIME! Find every episode on CREA.ca/podcast or wherever you get your podcasts.
Don’t Miss the New Episode of our French Podcast EN DIRECT: L’accession à la propriété au Canada : une perspective plus large.