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Real Estate Realities

Cottage Magazine,  May/June 2006

It’s a cornerstone of economics, really: when demand outstrips supply, prices go up and up. And up. This maxim is particularly true of recreational property, where demand is driven by a generation with unprecedented affluence. According to Landcor, a subsidiary of the Niho group of companies, whose business it is to analyze the real estate market in British Columbia, only six per cent of the province’s land area is privately titled. Of these 1.7 million properties, only a small fraction are considered recreational property- that combination of water, views, and amenities urban dwellers are anxious to invest in.

Most people shopping for recreational property also want a reasonable drive time to their future cabin or cottage.

And then there’s the demand. Buyer s in British Columbia and Saskatchewan compete with buyers from Alberta, where there are considerably fewer opportunities for waterfront- coupled with the dollars produced by its overheated economy- and increasing international demand.

Landcor notes another significant market factor: the “penturbanite”. Penturbia is a theory of population movement put forward by University of Washington professor emeritus Jack Lessinger, where affluent, active, mortgage-free, retirement age people move from large urban centres towards the outlying districts. Where their interests coincide with other buyers- for a place around  water (lakes, rivers or ocean), where there are utility services, good views and nearby recreational opportunities within a convenient four to six hour drive of a major urban centre, close enough get there and back on a weekend- prices are highest.

So, how do you find and buy the perfect place, amid big demand and relatively short supply? Rudy Nielson [sic] of Niho Land and Cattle Company, who has been buying and selling recreational property in BC for more than 35 years, offers these tips:

The Groundwork

Having more properties to choose from will better the odds, so when you’re looking for a property, use all the avenues you can: realtors, the Internet, newspapers, magazines, “word of mouth” and “for sales” signs. Sort out the properties by priority as they are received, and organize those that interest you by area, price and size. Organize the ones that don’t interest you too, and label them by the person who sent you the information. Determine any missing information and phone your contact to fill in the blanks.

If you are dealing with a private individual, it is advisable to do a title search. Make sure you receive the full and correct legal description on each property, then order a title search. Contact a title search company,  or have your notary or lawyer do it.

Know the Area

By using those techniques, you should be able to get a gut feeling for the area and even the price. Here are some sources of information Nielson [sic] suggests will help:

Pre-emption map: This is the most important map. It gives you the big picture: crown vs. private land, roads, railroads, power lines, rivers, big creeks, mountains, towns and much more. If necessary, you could find a property using only this map. These maps are sold in some bookstores.

Forestry Recreation map: The forest recreational map is the most recent map of the road systems and lakes, good camping spots on forest roads and lakes. They are available at local forestry offices.

Topographical map: This map shows you if the property is very hilly, steep or swampy and if there are any access trails. These maps are produced and sold by the federal government.

Vegetation map: Formerly known as a Forest Cover Map, this map shows the forest species, age and height classes, crown closure codes and site index. It will also show types of terrain. These maps are available through Clover Point Cartography.

Plan: Go directly to the registry office or through a title agency and order the plan number of the property. It will give you the size and measurements of the property, and show you where the roads are.

Survey notes: While the surveyor was setting up the original cornerposts to the property, he would make notes in his journal identifying blazes and other distinguishing features of the property. You can request these notes from the Surveyor General’s office. Using these you can determine where the cornerstones of the property were originally set and walk the property lines.

ALR map: Phone for a copy to determine if all or part of a property is in the agricultural land reserve.

Price & Value

What’s it worth? Anyone who lives in Calgary or Vancouver today knows that the assessed value of a property is not necessarily an indication of its market value. But it can be a baseline. Map the properties for sale in a given area, along with the owners’ names, asking prices, and size. This will give you a rough feel for price.

Never worry about an asking price- if you do your research and prove your price is better than theirs, you can reason with them. However, you don’t want to drive out to the property and find it sold. Take the best properties and put an offer on them subject to viewing. Most importantly, learn how to negotiate.

Finding the Property

When going out to look at properties, make sure you let somebody know where you are going and how long you will be, and leave them a map. Always record your mileage and direction for future use. Use the speedometer in your car with the pre-emption and forestry maps.

Closer to the property, use the forest cover and contour maps. If you have any problems finding the property, go to a local store or gas station and ask them for help. When you get there, look for new posts or identification markers. If there are none, that means you must use the old surveys. Don’t forget to take pictures of the property when you are walking it.

Make sure you know the acreage and measurements of the property. Once you have found what you think is a cornerpost, put your hip chain onto it, look at your map and find the measurement and direction that you have to go. Walk the entire property, only stopping where the post is supposed to be. Don’t forget sunscreen, bug spray, water, food or your notes. Remember, the better the transportation you get, the faster you get to look at deals.

Packaging a Deal

If you don’t have the cash in hand, you’ll need to finance your purchase before removing the subject clause,  either through a bank or an alternative source. Packaging your information can help convince a potential partner, investor or lender. Take all the existing information you have on the property and assemble it into a detailed brochure. The more information you include, the clearer the picture you will be able to present to a lender or partner.