By Ozzie Jurock
This is an expanded version of the article which originally appeared in The Vancouver Sun on June 30, 2001
The senior executive of today reads in his local paper that his company is ' lean and mean' and he knows why. He just laid off ten people and he is wondering whether he is next. Also, all these people that were laid off did something, now he is doing all their work too. He starts earlier and stays longer and at night he doodles and thinks, what if?
What if I packed up my kids, grab a satellite dish, my laptop and moved out of town? What if I sold the house in the city and really did it? Or he wonders: what if I bought a recreational property now and had a place to hide for the weekend. And he is not alone. People throughout North America are on the move. Population growth in smaller towns is exploding. Californians move to Oregon and Arizona, New Yorkers joke at the rain but moved to Washington. The ski resorts and lakes are teeming with 'former' city slickers clutching cash and the hope for the elusive "better quality of life."
In Ontario, it always was the 'cottage' on the lake, in BC the 'cabin' in the mountains and the roads into the promised land are a hot sweaty affair Friday (out) and Sunday nights (back). Proving further our pre-occupation with ' getting away.'
What is new is that now families actually uproot and move 'kid and caboodle' into the new out-of-town and bring their jobs with them. Some commute to the city, some live in both places, and most generate their know-how into a new enterprise.
Canada's population growth rate from 1991 to 1996 averaged 1.21% per annum or 6.05% for the period and BC's overall growth rate clocked in at double that. Yet, places like Kelowna grew by 22%, Gibsons on the Sunshine Coast by 23%, Courtenay on Vancouver Island by a whopping 48% and Whistler was king at 53%.
Many went, saw and bought. Others simply fell in love with the rolling hills, with the mountains. Some older yuppies bought without regard to amenities such as transportation, closeness to hospital or non-compatibility with locals. And some came back - reality destroying the dream.
Like all investments, but particular out-of-town type investments you must start by investing time for questions to yourself. What type of person are you. You dream of roughing it, but could you really? You dream about living on an island, but could your small children?
You want to make money on timber, on large acreages, but are you prepared to plunk down 50% cash?
As more and more people move from the big urban centers and into the smaller, more saner towns ... grabbing their kids, their laptops and their satellite dishes, savvy investors can benefit from understanding their motivations.
As investors, this is one important trend to target and one most important type of buyer to anticipate. Waterfront of any sort is worth grabbing. But check out the access (both now and future planned), legality of septic fields, wells and the like.
It's one thing to buy that rustic old homestead buried off in the middle of nowhere. It's quite another knowing the boundaries of the old place.
Many a buyer has walked the hinterland with an equally bemused Realtor, "thought" they both had the place pegged ... only to discover much later they were both way off the mark. Literally. That pleasant little glen (pond, strand of valuable wood, etc.) actually belongs to the neighbour just across the hidden line. Surprise! You actually bought a cliff-side (swamp, scrubland, etc.)
Before buying vacant land (or any property, for that matter), always go out and walk it. With that said, the out-of-town buyer comes in mostly four flavors, each with his or her specific and unique needs.
The Recreater, whose wading boots meet the waterslides
The 'Recreater' wants amenities, the outdoors activities. Water-skiing, skiing, boating, something for family and the kids ... which also means he or she wants to be relatively close to major urban centers (or at least somewhere close to a video store when the offspring gets bored). No rugged, woodsy stuff here.
The Profiter - who likes his profits ... rustic.
The 'Profiter' on the other hand loves the woodsy stuff. Woodsy as in timber, gravel or anything else found on the land which can be removed for a good profit. In some cases, this profit is enough to pay for the land outright. Even though lumber prices fluctuate over time, lumber will become ever more precious. As forest reserves shrink or are further protected and as demand for timber and paper products increases, so will the intrinsic value of such wooded land. When selectively logged and properly 'opened up', the end value of the land can be actually increased.
Once logged (assuming it hasn't been 'nuked' and stripped, the land open to erosion etc.), this land can usually be picked up for cheap. Properly replanted and thinned, in 20 years this re-grown or regenerated land can yield astounding profits in terms of future timber value. Call it planting ahead for your retirement or family.
The Smog Escapee - who brings the money and the satellite dish
The 'Smog Escapee' is a derivative of the 'recreator' sans sweat...but with the staying power. Unlike the recreator, the escapee isn't looking for a summer vacation spot. Instead, he or she seeks a permanent change of address, a bucolic escape from the urban smog and stress. But then again, while he or she wants to be able to see the cows, he or she doesn't necessarily want to smell them. Target address: small-town or rustic, but not so remote as to exclude a hook-up to the Internet, a take-out sushi bar down the road and a double-decaffeinated espresso at the local hang-out. Certain areas are conducive to future escapees. Look for towns with potential for: future growth (i.e. a new highway connection or access); new employment (i.e. mega-retailers or any town targeted by MacDonald's) and any such sleeping beauties where snoozing housing prices haven't reflected the new reality.
The Investor in the Cariboo - where the deer and the Germans roam.
The 'Investor' comes from all over. Germany, the U.S., the U.K. or pretty well from any country whose strong currency makes that Canuck hideaway look downright cheap. Dreaming of that cliche Canadian open wilderness, these well-travelled, generally well-heeled types seek salt water, lake and/or river frontage, large acreages, islands or anything with a unique private feel to it. They generally don't like to bump elbows with the locals. Far from it. Many of them deliberately target remote tracts, preferably one with a lake large enough to drop ... gently land ... a float plane. Such properties are worth gold. When thinking out possibilities, clip on a pair of 'foreign' eyes and seek out what they like ... and then beat them to the punch, hang on for a bit, and then resell it to them.
What you could buy today if you are a
Recreater: 3 Bedroom Home in Scotch Creek - Lake Front $199,000
Profiter: 160 acres with half mile of river front in Prince George - $35,000
Smog Escapee: 3 bedroom, full basement home in Gold River - $55,000
Investor: Whole Island, 99 acres, Campbell River - $442,000
You can find these and thousands of other properties listed (Realtors FREE) at Jurock.com.
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