In Part 1, I talked about buying a condominium in Collingwood – Blue Mountain for personal use with offsetting rental income potential. If you decide that what you need is a unit that is part of a managed rental program, read on.
Buying a condo in this situation is essentially buying into a commercial venture in a condominium hotel and therefore, it is quite different from buying a standard residential condominium. In Blue Mountain, there are generally two types of managed rental program options available: one is to have a unit that is part of a rental pool and, the second is to have one that generates unit specific rental income.
Condo’s in the Village at Blue Mountain are part of a rental pool where revenues are pooled each day and shared among all suites not in use at the time by owners. Programs such as this have restrictions on an owners personal use limiting the number of days it can be in or out of the pool. Alternatively, the Intrawest townhome properties such as Rivergrass and Snowbridge and, the condos at Mountain Springs Lodge, run as a rental program based on the use of the particular home rather than a pooled program. I should mention as well that over the years, there have been changes in each development as to how the rental revenues are managed and it is very important for potential buyers to always obtain current and accurate information.
Units that are part of a managed rental program are required to meet a certain standard of interior finishing and fixturing. Owners are not free to decorate as they please! There will be specs on everything from the type of carpet and window coverings permitted to the linens used on the beds. In all cases, there are lockable storage areas for owners to leave personal belongings between stays but the rest of the unit must have the approved standards sets. Buyers are able to request an inspection of a unit prior to making a firm purchase in order to get a list of required changes and/or repairs that must be made, if any, in order to join or stay in a rental program or pool.
That raises the next question. If a unit is part of rental program and you wish to opt out or, if it is not part of a program and you wish to join, there are rules and procedures that govern these actions. Condominium by-laws specify a minimum number of units that must be enrolled in the rental pool and if it drops below this number, you may not be allowed to opt out. Ask for a copy of the rental management agreement before making an offer. In some cases, there are cut-off dates for opting in or out of a program and these can be critical in your buying decision.
So far, we have discussed your first considerations when buying a condominium for both personal use with income potential:
• Will you be renting it out seasonally or for short time periods under 30 days?
• Do you wish to be part of a managed rental pool or, are you going to self-manage your unit?
• If you are opting for a managed program, are you more comfortable with a rental pool or a rental program and, what are the rules and policies governing each?
• Will you have to invest extra to upgrade a unit in order to enter or stay in a rental program?
In Part 3 next week, we’ll look at some of the costs that are involved in buying a rental stream condo such as these.