By Connie Adair
No one would dream of buying a car without taking it for a test drive, yet people buy multi-million-dollar cottages without knowing if the property will suit their lifestyle or if they’ll like the location.
It doesn’t make sense, so real estate agent Ross Halloran of Sotheby’s International Realty Canada (SIRC) decided to do something about it. He developed Test Drive Your Dream Home, a program that offers qualified potential buyers a low-risk way to get a feel for a luxury property and location before they lay out big bucks to buy.
Test Drive Your Dream Home, launched in May 2015, is market driven. Muskoka (“where real estate values are formidable”) has seen an influx of buyers who are interested in, but not necessarily familiar with, the area, Halloran says.
These newcomers to Muskoka don’t have the same knowledge about the area as legacy owners and some haven’t even tried the cottage lifestyle before. The traditional way is for buyers to see properties on realtor.ca and then call an agent to view the property. Or they will call a local agent with their needs and wants, and then view multiple properties in one day. These buyers would then make a decision after a quick walk through, says Halloran. The usual 30-minute tour of a property hardly gives buyers enough time to kick the tires, let alone look under the hood.
The Test Drive Your Dream Home program gives buyers a chance to rent for a long weekend, a week, a month or even an entire season. If they want to make an offer and it’s accepted, a portion of the rental fee is credited back.
Potential buyers love the program, says Halloran, adding that in the first year, it has resulted in eight transactions worth more than $14 million.
If the property they are renting doesn’t suit their needs, Halloran and other Sotheby’s agents will find another suitable property. It’s a great way to develop buyer leads, he says.
Being able to experience the cottage, the location and area amenities can be the tipping point for those who are unsure about a property, he says. Having clients stay in the area for a longer period of time also gives agents time to show properties at a more leisurely pace.
The program also benefits owners, whether they are selling or not, to generate income from the property when they’re not using it.
Test Drive Your Dream Home has partnered with Muskoka District Rentals, which oversees the rental aspect of the arrangement, offering a hassle-free way for owners to rent their properties.
If the property is for sale and a renter decides to buy, or if they want to look for something else in the area, they are referred to a Sotheby’s agent (usually Halloran since he developed the program).
Halloran was licensed in 2012 and was recruited to join the Sotheby’s team in Port Carling, Muskoka in August 2014. “It’s been a great fit for both parties as I am currently the No. 1 top-producing agent for Sotheby’s in Muskoka/Central Lakes Ontario Region… and the Test Drive Your Dream Home program has been a huge factor in this success.”
Cottages in the current rental inventory range from $5,000 to $15,000 per week, an income generating aspect that may also appeal to buyers. Owners can enrol in a luxury rental program to safely generate income, he says.
A significant trend is buyers from the GTA migrating north. Another trend is Asian investors, who are interested in the cost mitigation of rentals. These investors look at the revenues generated by a property and it factors into their buying decision.
One investor made more than $30,000 in rental income in the first year. “He actually made a profit. These buyers are different, happy to enjoy it when it’s not rented out but willing to step aside and go another time if a renter is available. It’s a new trend,” says Halloran. “They don’t have the same attachment to a property as a legacy owner.”
More long-time families are also renting, finding it socially acceptable and smart ownership to offset the costs.
The program co-operates with all agents, says Halloran.