Invest in a second home

Are you thinking of buying a second home to enjoy the nature in the area or to make it profitable by renting it out? However, the high prices across the county and rental restrictions may make you hesitate. Two experts enlighten us.

Posted yesterday at 12:00 PM.

Emmanuel Moziane Verchev

Emmanuel Moziane Verchev
special cooperation

The epidemic convinced some to leave to live in the regions, while others retained their residence in the city, but bought a chalet. Then prices rose almost everywhere in Quebec and one wonders if the investment in these conditions is worth it.

Michael Lacroix, residential and commercial real estate broker – Groupe Sutton-Immobilier Estrie, affiliated with Barnes International believes.

Photo provided by Michael Lacroix

Michael Lacroix, residential and commercial real estate broker – Groupe Sutton-Immobilier Estrie

Il recommande de commencer par bien cerner ses besoins (maison de vacances, projet de retraite, investissement locatif, etc.), de déterminer son budget et de faire affaire avec un courtier immobilier de la région visée, parce qu’il con a uneissa bonne Places. He believes that “it is important that there is a relationship of trust between the person and the broker. You can ask him to send you alerts that match your searches and he must be able to advise you objectively about properties that interest you. He must also inform you if he sees an opportunity It might be right for you.”

Save money

It’s best to get a pre-qualified mortgage to speed up the buying process and be able to make an offer quickly. The mortgage institution will ask for a minimum down payment of 20% to finance a secondary home as well as check your debt ratios based on your current debt and salary.

“Even if your goal is to rent the property and you have established that it is already rented, most financial institutions will not take anything for granted when it comes to short-term rentals. [moins de 30 jours, c’est-à-dire les week-ends ou à la semaine], because it is very unequal, emphasizes Mikael Lacroix. In the case of a long-term lease, if there is already someone in the dwelling with a lease, the bank may consider income from the lease. »

When renting, it is important to budget for contingency and know that annual insurance is more expensive for short-term rentals than when renting all year with a lease.

Michael Lacroix, residential and commercial real estate broker – Groupe Sutton-Immobilier Estrie

In addition to basic needs and budget (mortgage, taxes, insurance), other factors should be taken into account before making your choice.

Check rental rights

One of the most important factors is the location of the property. Micael Lacroix suggests conducting a market study, and then choosing between a long-term or short-term lease. In the first case, there are no municipal restrictions, while in the second, they are not authorized in all sectors.

Photo by Marco Campanozzi, the press

It’s mandatory, since 1Verse May 2020, to register with the Corporation de l’industrie Touristique du Québec to rent a chalet on a short-term basis.

It is therefore important before buying that you inquire with the city about the possibility of short-term rental, because even if the property you are looking for is located in a tourist area, on the water’s edge, near a national park or a ski mountain, there is no guarantee that rentals will be allowed. If this is the case, you must register with the Corporation de l’industrie Touristique du Québec (CITQ), which will assign a rating (number of stars) based on various criteria, including the property’s location, number of rooms, bed size and indoor and outdoor equipment (washing machine). dishes, number of pillows, stove, kayak, spa, etc). This classification will allow to determine the rental price and the presentation of the property in chalets or Quebec, for example.

In addition, you should know that it is mandatory, because 1Verse May 2020 to register with the Communications and Information Technology Commission (CITQ) for short term rental. This registration is equivalent to a vested right. However, in the event of a neighborhood complaint, the municipality can block your activity.

Manage yourself or not?

Obviously, a second home has additional maintenance restrictions which are ten times greater if you rent it out. An outdoor hot tub is in great demand, but you’ll need to clean it between each passenger. It takes more management and you have to build the efforts you are willing to put in while remaining realistic. For example, if the chalet is located within an hour and 30 minutes’ drive from your home, it can be difficult to go there frequently to clean between each client,” notes Mikael Lacroix.

Some rental management companies offer concierge and housekeeping services for anywhere from 10% to 15% of the income generated. Such is the case of the company Hôtel à la Maison, which was set up after a bad experience. « On n’était pas satisfaits du service auquel on faisait appel pour nos proprietés parce qu’on le trouvait incomplet, alors on a décidé de lancer notre propre service pour des locations à court terme », raconte Michael Carrier, directeur général at home.

Photo by Marco Campanozzi, the press

Michael Carrier, General Manager of Hotel à la Maison

The company currently operates 160 short-term rentals and more than a dozen units it owns on the banks of the Saint Lawrence River. “Our clients offer us full or partial management. You should know that it takes an average of nine working hours per week to manage a home for short-term rental, as he specifies. We also provide an assistance service for investors to choose the geographical location and type of home.”

The real estate market is overheated, it is imperative that you are informed by people with experience in this field before making a purchase.

Michael Carrier, General Manager of Hotel à la Maison

Mr. Carrier recommends taking professional-quality photos before marketing on different platforms such as Airbnb or Booking. “Leasing is a business. It is run like a business, on a fairly large scale, depending on the revenue generated, because it varies greatly depending on the services, location and occupancy rate. In general, everything goes well with customers, and I rarely encountered Horror stories we sometimes hear about. You just have to avoid renting to large groups by limiting the number of people allowed,” he advises.

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