First of all, don’t buy residential or commercial property in a thin marketplace unless you are doing it for a reason other than economic gain. A thin market is where property is abundant and buyers few. That would include almost all rural Ontario property or small towns, and most sun destinations in the Caribbean, for example.
Rodney Bay, St Lucia
Here’s what I recently said to a friend of mine who saddled himself with a “dream” property in St Lucia–
- As you already know this type of property is not easy to sell
- It’s not that it’s a bad property, it’s that the market for these places is thin
- Try selling a home in Prescott, only 45 minutes south of Ottawa for goodness sake, and you’ll know what I mean
- While you are trying to sell your property, add airbnb.com to your marketing mix/it’ll help you find more rentals for your property
- Another way to exit, is to sell it in parts, say, you find six Canadian families (or even companies who want to reward employees/suppliers/customers) who each buy 1/6th and then they get two months there each per year–1 month every winter and 1 month at other times of the year
- So they each put in $65,000 instead of one chump ponying up $390,000
- You might even keep a 1/6th interest yourself/so you have exited without exiting if you follow me
- Your occupancy rate will increase from less than 50% (which is what is keeping you from making this a profitable investment) to 100%
- Your workload will drop hugely too/trying to keep these places rented and maintaining them is a huge amount of work for not very much return (in fact, your returns are negative, which is bad)
- You already have the buyers lined up, you just don’t know that–everyone who has ever visited/stayed at your place is a potential buyer of a 1/6th interest.
Hope this helps,