After a slow start to the year, recreational property sales in Collingwood are up over last year’s levels. Inclement weather during January and February impacted buying activity but the market was back on track by April. Year-to-date sales—comprised of condominium units on the mountain and in town, as well as waterfront—are up 14.5 per cent, rising from 234 units in 2007 to 268 in 2008. While sales of condominium product in town are brisk, demand for Intrawest properties at Blue Mountain has cooled. Priced at $400 to $800 per sq. ft. for a new unit, the market has fi nally peaked, with resales selling at considerably less. The starting price for a 750 sq. ft. unit at Blue Mountain can be as high as $255,000, while the same product in town will start at $110,000. Several new condominium and new home developments are underway in Collingwood. The Shipyards and South Admirals Gates are expected to strengthen the city’s downtown core. Waterfront activity gained momentum earlier this year, with more and more properties selling at the $1 million price point. Last year, four properties were sold over $1 million. To date, four have sold and more are expected to follow in coming months. Th e most expensive property sold year-to-date was priced at $1.3 million. Starting price for a three-bedroom, winterized recreational property on 50 ft. of waterfront is $650,000 in Blue Mountain, while a similar property in nearby Meaford will cost $425,000. Th e most active segment of the market continues to be priced under $500,000 for waterfront, but there is a notable shortage of properties up to and around $800,000. For condominiums, product under $240,000 tends to be snapped-up quickly. Back lot and access properties can be purchased for signifi cantly less, but listings are few and far between. Hobby farms have become increasingly popular, with many purchasers opting for a brand-new, highend homes situated on 15 to 25 acres. Hobby farms priced at $500,000 to $600,000 are most active. Collingwood has hit new highs this year. One hundred acres of vacant land with views has sold for over $1,000,000. Aff ordability has become less of an issue with more product available at the $160,000 to $200,000 price point for condos. Combined with lower interest rates expected in coming months, this should serve to further stimulate recreational property sales for the remainder of the year. With record-low interest rates and significantly lower prices it's hard to go wrong - unless, of course you lack the financial means to make the investment. After all, you have to be ready to meet all the obligations that come with owning more than your principal investment property in collingwood or the georgian triangle. For instance, keep in mind that if you intend to rent out the second investment property in collingwood or the georgian triangle in collingwood or the georgian triangle, you'll also have to be prepared to deal with tenants and handle maintenance costs. Leverage Secondary home ownership is an attractive investment option because it gives you even more leverage than you have with your principal residence. Leverage is when a relatively small amount of your money controls a much larger asset - like a investment property in collingwood or the georgian triangle. The more leveraged you are, the greater the financial return on your down payment becomes if the value of your investment property in collingwood or the georgian triangle increases. There are very few other investments which can be purchased with such a small percentage of your own money. For instance, let's say you acquire a second investment property in collingwood or the georgian triangle in collingwood or the georgian triangle for $100,000, with a $15,000 down payment, and during the first year that you own it, the investment property in collingwood or the georgian triangle increases by a value of three per cent for a $3,000 gain. As a result, the return on your down payment of $15,000 is 20 per cent - $3,000 divided by $15,000. Other Investments By comparison, let's say you were to buy a term investment of $100,000 (in cash) for one year and it increased by $8,000 over the course of the first year. Since it cost you $100,000 in cash to buy it, the return on your investment is only eight per cent before taxes. Obviously, leveraging is a powerful way to make your money work for you. Getting Financing You should be aware that many lenders place non-owner occupied deals in the high-risk category and it's not that unusual to find lenders who will not finance rental units at all - or those who will only finance them if they are insured. Obviously, lenders will want to know whether the investment property in collingwood or the georgian triangle will carry itself. (Is there sufficient rent to cover the mortgage payment?) Don't make the mistake of assuming that a rental income of $500 per month will carry a mortgage payment of $500 per month. Only a portion of the rent is used to pay the mortgage; the remainder must cover taxes, maintenance, vacancy, bad debt and expenses. (Many inexperienced purchasers think that owning rental in collingwood or the georgian triangle will allow them to "get rich quickly" and when this does not happen, the owner becomes disillusioned and loses interest in the investment property in collingwood or the georgian triangle.) Costs You should also be aware that the cost of obtaining a mortgage (for legal and appraisal fees) on a non-owner occupied investment property in collingwood or the georgian triangle can be higher than the cost of obtaining a mortgage on an owner-occupied investment property in collingwood or the georgian triangle, when more than one unit - such as a duplex or triplex is involved. Interest rates charged on rental in collingwood or the georgian triangle might also be higher because some lenders view these in collingwood or the georgian triangle as being a higher risk. As mentioned above, the main responsibility of having a second investment property in collingwood or the georgian triangle in collingwood or the georgian triangle is being able to carry it financially. And if you're like most people, you'll probably have to rent it to someone as a result. This is also a great deal of responsibility because you will have to maintain the investment property in collingwood or the georgian triangle in addition to your own principal residence, and you'll be responsible for finding tenants who you trust and feel comfortable with. Some parents with grown children ready to go off to university or college choose to purchase secondary in collingwood or the georgian triangle for their offspring to live in while they attend school. This gives them an excellent investment and they are assured that the occupants will take good care of the home.