So, covering costs… how much do you need to put down?

Well, there are a huge number of variables which will impact this question, but if we take a very average approach to this, you might come up with the following:

• Assume an average 2 bedroom that can be rented nightly, this is approximately $1.7M right now.
• Average gross rental rates are approximately $80-90,000 per year.
• Most management companies charge 28-30% of gross revenue.
• That means that your adjusted gross revenue after management expense is more like $60-70,000/year.
• subtract your strata fees, property taxes and tourism Whistler fees, which on average total approximately $15,000/year based on the sales stats for 2 bedroom sales in the last 6 months, which gives you a net result of between $45-55,000/year, or $3750-4600/mo.

So, how much mortgage can you cover with $3750-4600/mo? Right now at the time of writing this, mortgage costs are approximately $615 for every $100,000 borrowed based on Dominion Lending figures for a 5 year fixed mortgage.

That means that you can cover approximately $600,000-750,000 worth of mortgage payments with your net revenue.

So, your $1.7M purchase, with up to $750,000 worth of mortgage covered with revenues means you’re looking at needed a downpayment close to $1million. Or approximately 60%.

Now imagine you don’t need management fees because you do it yourself… now you’re in the money! But for the majority of people that’s just not feasible.

What about entry level stuff? Things like a Gondola Village unit?

These places are small, 400sq ft 1 bedroom units in Creekside and represent our most common entry level nightly rental product.

They currently sell between $750,000 (original, poor to average condition, poor location in complex) to $1million for renovated, good location, great condition units.

These places on average can generate upwards of $65,000/year. And if we do the analysis as above we get the following:

• $45k adjusted gross after 30% management.
• About $9k in strata fees, property taxes and tourism Whistler fees per year.
• So about $35+k in net revenue, or about $3000/mo average’d out.
• That enables approximately $480,000 worth of mortgage payment capacity based on the same $615/mo per $100,000 borrowed noted above.
• So for a good condition unit (which is what you would need to obtain those revenues) you’re going to need around 50% down.

So there you have it for entry level 1 bedrooms, and average 2 bedroom units. 50-60% downpayment needed to cover costs of mortgage, strata fee and tourism Whistler fees.