Vacation property

[asp integra]

Toying with the idea of buying a second place that the wife and I can use or rent out depending on the time of year. We love the mountains (ski every weekend, hike in the summer etc) and my wife lived in Canmore for a few years, so we are thinking a condo in Canmore would be great. Just wanted to get some peoples thoughts who have done this or if you did and then sold. How did rentals work, were you/are you happy owning a vacation place, did you use it as much as you like? We would rent as much as we could to offset the mortgage/utilities/condo fees etc. Any other thoughts as well please post.

[cam_wmh]

Ben
Be forewarned, few places give the actual rental returns "promised". The condo management companies on the resorts, take a much richer fee.

My family did this once before, and found it was too much hassle and pulled the rental all together. Albeit, bit more remote locations. If you don't have a storage locker, you'll need special locking cabinets for your personal items, and things get beat up. The rental crowd is reckless, in this market.

I think of those condos that would actually be a decent investment, I think Whistler, (Banff - if you can), and maybe Revelstoke-- Sotheby's has that resort locked up though.

IMO, everywhere else is either saturated, or too turbulent.

On the other-hand, I suggest exploring the owner managed web-rental. Some condo boards frown upon them - but whatever, the AirBnB, VRBO and alike. As it's not too far away, you will need to clean between rentals, etc;

[cam_wmh]

http://www.moneysense.ca/columns/condo-hotels-automatic-returns-or-so-you-think

[CanmoreOrLess]

Other than what cam_wmh went over, and I agree with all he wrote. You might be better off renting a condo for each ski weekend and getting a used trailer-camper for the summers. You can park it for the entire season in one place or move it around from May to September. You'd be better off at the end of the year and far fewer headaches.

[blownz]

I end up in Canmore a few times a year and last year and always stay at one of the many condo's there. Last year the one time there were a few units for sale at the place we were staying at and we looked into it out of curiosity. I don't recall the exact details, but it was about $200k for a 2 bedroom that you could only use for 10 weeks (rest of the time it had to stay in the rental pool) and the monthly condo fees were $790. This was for something that we were staying in for just over $200 a night.

Just for the condo fees I could go two weekends a month 12 months a year and have zero risk and change resorts anytime I want. I couldn't imagine a scenario where owning a condo in Canmore would be a good idea.

[BavarianBeast]

I have both a summer & winter vacation property.

Winter: Big White, Kelowna
Summer: On the lake, Kelowna

We don't rent the winter one out any more because it was too hard for us to plan when we had time to go out to Kelowna and use it.I found that when I was renting it and I had time to use it, it was always rented out and I could barely use it. Now it's out of the rental pool and isn't bringing in any income and I really wish I would of not bought and just rented, I don't think I'll ever see a profit here.

The summer one is a much better investment, seeing as I only want to go out for a week or two during July/August and that is easy to book. However after condo fees are paid and the rental pool is split, I make a very small profit on this home and it will take over 30 years for me to see my full investment back.

[TimLacroix]

Some great feedback on buying and renting a vacation / rental property.

Financing is a little more challenging when it comes to vacation properties... specifically vacation homes part of a rental pools.

If this is a property you are considering with a rental pool:

Expect down payments of 20 to 35% for these properties, no or very little rent can be used for qualifying for the mortgage, and some lenders may not lend in certain areas or certain condominiums.

These are not well liked by lenders and are considered higher risk
Quote from Lender:
Units in a Rental Pool generally have a premium price as they are managed by a Management Company with the idea this will obtain a higher return for the investor. This premium price is a concern/risk as we are relying on the performance of the Management Company to maintain this value.

If the Management Company does not perform or ceases to manage the pool, the value of the unit may decline and lender may be exposed to a loss in an arrears situation.