There are two main types of rental covenants on condominiums in Whistler, phase 1 and phase 2 zoning. They pertain to the amount of personal and rental use that the owner is allowed.
Phase 1 zoning “A Phase I Rental Pool Covenant is the least restrictive of the rental pool covenants because an owner is allowed unrestricted use of the unit. When the unit is not being used, it must be placed into a bona fide rental pool company for rental to visitors.”
- It can be occupied full time by the property Owner
- The Owner is able to rent it out on a long term basis (month-month)
- The Owner is able to rent it out on a short term basis and manage their own bookings or use a rental management company based in Whistler (Airbnb, Harmony Whistler, etc…)
Phase 2 zoning means that the unit must be made available to commercial rent to the public at all times when it is not in use by the owners.
- It allows the owners to have 28 days in the winter (Oct 15 to April 15) and 28 days in the summer (April 15 to Oct 15) to provide properties to resort guests at any given time.
- These are commercial ventures, best to be thought of, as buying into a business, as there primary use is for revenues from room rentals.
- The Owner may use their days how ever they would like. Could be 14 weekends in a row, or 28 days straight.
- You would typically book these days about 4-6 months in advance.
- You are allowed to make short term bookings at the hotel if you wish to add an extra day if hotel occupancy is below 80%.
- 30-35% equity is usually what lenders are looking for if a mortgage is required. Very hard to get financing for anything under 500 sq ft (Studios)
- Typically we see these properties bring in 3-5% ROI. Greatly depends how much it is in the rental pool, and which dates.
- Only costs outside of your monthly strata fees are, your annual Tourism Whistler tax and property tax. You also must pay for your room to be cleaned after each personal stay for your next guests.
- For major renovations to the hotel, there are at times special assessments to help with the contingency fund. These are very rare though, as most have large contingency funds.
- Speak with an accountant, as GST is applicable on these properties and is deferred on purchase, once you have registered for a GST number.
- These properties are taxed as commercial ventures, and have pool revenue sharing and hotel management that you must agree to when purchasing. Typically this does not allow you to manage your own bookings (VRBO, Airbnb, etc…).
- The hotel management takes a fee from your revenue, but covers everything from check in to check out for you! Making it a very stress free process.
Both can be a valuable investment, you just need to be aware of the surrounding regulations on each rental covenant and what works best for you and your budget.
Confused which property you are looking at? Reach out and I will give you a hand 🙂