Estimated reading time: 3 minutes
Key Takeaways
- The Rental Pool allows condo owners to earn revenue even when their unit is not rented.
- Owners receive a share of room revenue based on Generally Accepted Hotel Accounting Principles.
- Detailed financial statements are available for major Phase 2 properties, but smaller properties offer more basic reports.
- Monthly owner statements are crucial to understanding individual use and its impact on revenue.
- Consider additional resources on Phase 2 properties for potential investment opportunities.
The Rental Pool is a means of earning and distributing revenue to the strata lot owners whose condo was available for rent. The rental pool consists of all hotel condos in the building that must be in the rental pool when the owner is not using the condo. Even if the hotel condo was not rented, the owner will get a share of the revenue earned by the overall property. The rental manager takes care of the property, the rentals, the repairs and maintenance, and in addition, provides the owner with a detailed monthly financial statement.
Calculation of Rental Pool Distributions
For each day that a Hotel Room Strata Lot is in the Rental Pool, the Owner of such Hotel Room Strata Lot will be entitled to share in the Room Revenue. This share is defined in accordance with Generally Accepted Hotel Accounting Principles.
The room revenue from the Hotel Premises and the operation of the Hotel earned on a such day, as calculated by multiplying the Room Revenue earned on such day by the fraction which has as its numerator the Interest Upon Destruction (IUD) of such Hotel Room Strata Lot and as its denominator the aggregate of the IUD of all of the Hotel Room Strata Lots In the Rental Pool on such day. Note: the IUD was determined as part of the initial Disclosure Statement written long before the shovel hit the dirt!
Phase 2 Hotel Condos Financial Statements
The Big 3 Phase 2 properties in Whistler are the Westin, the Four Seasons, and the Pan Pacific(s). These properties issue a detailed Owner financial statement that will make anyone with a financial bone in their body jump for absolute joy. However, outside of these big brands, the financial statements are as basic as allowed. This is why most buyers who look at purchasing a Phase 2 as an investment will seriously consider one of the Big 3.
The drawback with the financial statements is that they do not give a Year-End summary of owner use. So it is essential to ask for the monthly owner statements to determine owner use throughout the year. An owner who uses their condo at Christmas and New Year will have a different effect on the revenue as opposed to an owner who comes in September.
Next Steps
If you are considering a Phase 2 property best to read the following pages on this site:
If you think I would be a good fit to work with you and your family, and you are not working with a Whistler realtor, please contact me to set an appointment to discuss Phase 2 property.
Marion Anderson Real Estate Agent
Sutton Group – West Coast Realty, Whistler, B.C.
marion@marionanderson.com (604) 938-3885