Is Whistler Real Estate a Good Investment?
When considering the purchase of an investment property, what does the word investment mean to you? There are two reasons to invest in real estate: 1) appreciation and 2) cash flow. When you are buying real estate, you choose one reason. It is important to decide on the purpose of your investment. If you are considering a Whistler investment property, read on. This page is going to save investment buyers a significant amount of time.
Buying for lifestyle is the main reason people want to own property in Whistler. Analyzing the figures for a cash flow investment property in Whistler rarely pans out. An investment purchase does work for appreciation over time, but most investors want cash flow. In addition, there is always a better investment somewhere else that makes more cash.
In addition, investment in Whistler for cash flow questions the value of a Phase 2 property. To understand the types of properties in Whistler, please read my post, Phase 1, Phase 2 and TA Zoning.
Table of contents
Non-Resident: Investment Alert
Right off the top for non-resident investors, there are two topics that should also be considered. They are Withholding Tax and the Underused Housing Tax (UHT). These alone can affect the decision of whether to invest in Whistler for appreciation or cash-flow.
Non-Resident: Withholding Tax
Non-Resident investors should also be aware there is a Withholding Tax on nightly rentals. This Withholding tax does affect the cash flow. The Withholding Tax is 25% of revenue is and is calculated in the chart below. This starts out as 25% gross revenue but can be adjusted to 25% net revenue.
Non-Resident: Underused Housing Tax (UHT)
For non-residents who are not using their property for a minimum of 28 days, there is also the UHT to take into consideration. This is especially important because a buyer looking for an investment property is not typically looking to use the property for 28 days each year. Please click through to the page on Non-Resident: Underused Housing Tax (UHT) for more information. This is a complex topic with variables.
1) Asset Appreciation
Appreciation of real estate in Whistler can be seen on the Home Price Index (HPI) chart. This is not an exact science as there are many factors that go into the HPI. However, it does show you the increase in real estate segments over the years. The HPI demonstrates that if you buy real estate in Whistler and sell it in 5 years, past trends dictate there will be capital appreciation.
Courtesy of the Greater Vancouver Realtors board, of which the Whistler real estate agents are a member, here is their HPI for each segment:
Detached Houses HPI
Townhomes HPI
Condominiums HPI
2) Cash Flow
Is a Rental Property a Good Investment?
The following 3 charts can be used to calculate whether the rental property you are considering is a good investment. Typically, each investor has a specific Return on Investment (ROI) or Capitalization Rate (cap rate) that they are expecting. This ROI will be based on the investor’s experience with previous investments and the comparison to other options.
Note: these charts and this page offer basic information on the calculations.
1) Calculate ROI or Cap Rate
First of all, this calculation should be a simple, quick process. The calculation is also based on the property being in good condition and not needing any major repairs or upgrades. The most important part of completing these charts is obtaining the correct figures.
Calculate the potential gross annual revenue, or rely on the gross annual revenue from the existing revenue statements provided by the management company. Then, collect all the expenses associated with the property. For this demonstration, enter these figures as an annual expense. Typically, financing is not included at this stage. Note: the maintenance reserve is any additional costs you may be considering for repairs not covered by the strata corporation or rental management company. This is especially important if the property you are purchasing is a non-strata property to rent monthly to tenants.
| Item | Calculations |
| Gross Annual Revenue | Provided on revenue statements. |
| Annual Expenses | Most of these expenses are provided on the financial statements or listing data. |
| Property Management | Provided on financial statements. |
| Strata Fees | Provided in listing details. |
| Tourism Whistler Fees | Provided in listing details. |
| Property Taxes | Provided in listing details. |
| Insurance | This may be content and extra insurance for strata properties. If non-strata then this cost will need to be obtained. |
| Owner-Paid Utilities | You will estimate this amount based on the utilities that are not covered in the monthly strata fee. |
| Maintenance and Improvement Reserve | You will estimate this amount. |
| Total Annual Operating Expenses | Total of all the annual expenses and projected expenses. |
2) Operating Income
From the first chart, you have the gross annual revenue and the total annual operating expenses. Subtract as explained below.
| Item | Calculations |
| Annual Net Operating Income (ANOI) | = Gross Revenue – Total Operating Expenses |
3) ROI Calculation
The sale price of the property is what you are willing to pay for the property plus the cost of buying the property. My blog on Property Transfer Tax (PTT) will explain the calculation. PTT is a one-time charge. GST is a complex topic, but the listing details will tell you if the property is GST exempt of not. My blog on Goods and Services Tax (GST) may be of interest to you.
| Item | Calculations |
| Sale Price of Property | List Price + PTT+ GST |
| Cap Rate % or ROI % | = (ANOI / sale price of property)*100 |
Is a Phase 2 Property a Good Investment?
The one segment that attracts most attention is the Phase 2 property. This is because the price of a one-bedroom in 2024 was around $500,000. When a buyer does not know about the different phases of real estate in Whistler, the appeal of price seems attractive. This price appeals to an investor over a one-bedroom in the Aspens which in 2024 was priced for sale over a million dollars.
Phase 2 History
Note: Phase 2 properties are not featured on this site. The Phase 2 property offers the investor the opportunity to put money into Whistler, and use the property up to 28 days in winter and 28 days in summer. A reputable and experienced rental management company manages your investment so that you are basically not involved with it. Most cash flow investors are not looking to use their property for 56 days, as they are more interested in cash flow.
This type of investment sold quickly in 2000 when the Westin, Pan Pacific, Delta, and later the Four Seasons came to Whistler. These companies were both the rental manager and the strata manager. These companies were and are a valued asset for Whistler. The resort was developing and needed those names to offer quality accommodation to visitors who valued staying in a luxury hotel…who doesn’t love that experience?
Non-Resident Phase 2 Advantage
The advantage of a Phase 2 property over a Phase 1 property is the length of personal time associated with each Phase.
- Phase 1 rented nightly allows the non-resident 28 days of personal use.
- Phase 2 allows the non-resident 56 days of personal use.
Resident of Canada Phase 2 Cash Flow
Let’s have a look at the investment opportunity for a one-bedroom ski-in ski-out hotel in Whistler Village. In 2024 a one-bedroom, Phase 2 was selling close to $500,000. The following figures were rounded and taken from an owner’s statement. The figures are rounded, but this should give you a sense of the return on investment (ROI).
The unit cost $500,000 and the annual cash flow is $18,000 with no use to the owner. Therefore the ROI is 3.8% (18,000/500,000 *100). When the owner uses the property the return will drop because the net revenue decreases.
Non-Resident Phase 2 Cash Flow
This example shows that a phase 2, one bedroom that costs $500,000 CAD and without any owner usage, it generates an annual cash flow of $5,000. The difference is the Withholding Tax deduction.
Withholding Tax
Withholding Tax is a big topic for accountants, and the author is a realtor not an accountant. Basically, Non-Resident investors acknowledge that there is Withholding Tax on nightly rentals. This Withholding tax affects the cash flow. The Withholding Tax is 25% of revenue is and is noted in the chart below.
The unit cost $500,000 and the annual cash flow is $10,000 with no use to the owner. Therefore the ROI is 2% (10,000/500,000 *100). When the owner uses the property the return will drop because the net revenue decreases.
Phase 2 Cash Flow Chart
| 0ne Bedroom | Resident of Canada | Non-Resident of Canada |
| Cost of Purchase | $500,000 | $500,000 |
| Annual Revenue & Expenses | 2023 No owner Use | 2023 No owner Use |
| Gross unit revenue | $96,000 | $96,000 |
| Adjusted gross revenue | $82,000 | $82,000 |
| Unit Expenses | -$48,000 | -$48,000 |
| Non-resident Withholding Tax | 0 | -$8000 |
| Net revenue to owner | $34,000 | $26,000 |
| Annual Expenses: | ||
| Strata Fees | -$11,000 | -$11,000 |
| Tourism Whistler Fees | -$1,000 | -$1,000 |
| Property Taxes | -$4,000 | -$4,000 |
| Annual Expenses | $16,000 | $16,000 |
| Revised Annual Cash Flow | $18,000 | $10,000 |
| Cash Flow ROI | 3.6% | 2% |
Other Investment Options
Each investor who contacts me is looking for a different cash flow ROI. For this example, the investor spends $500,000 with an expected 5% ROI, the investor should earn $25,000. Then the investor spends $10,000 on a holiday at this phase 2 property. He still receives a $15,000 return. In addition, he does not have to deal with strata, potential assessment, insurance, or accountant fees.
Is Phase 1 A Good Investment?
There are numerous examples of investment cash flow in Whistler, and unfortunately, the return is lacking for cash flow. Below is a Phase 1 residential property with nightly rental zoning. Each example demonstrates that lifestyle is why you purchase a Whistler property, with the view to capital appreciation. These numbers were taken from the owner’s statement.
Phase 1 Cash Flow Chart
| 0ne Bedroom | Resident of Canada | Non-Resident of Canada |
| Cost of Purchase | $1,100,000 | $1,100,000 |
| Annual Revenue & Expenses | 2023 Booked 70% | 2023 Booked 70% |
| Gross unit revenue | $50,000 | $50,000 |
| Rental Management Fee | $20,000 | $20,000 |
| Adjusted gross revenue | $30,000 | $30,000 |
| Expenses | -$3000 | -$3,000 |
| Non-resident Withholding Tax | 0 | -$13,000 |
| Net revenue to owner | $27,000 | $14,000 |
| Annual Expenses: | ||
| Strata Fees | -$8,500 | -$8,500 |
| Tourism Whistler Fees | -$1,000 | -$1,000 |
| Property Taxes | -$4,000 | -$4,000 |
| Annual Expenses | $13,500 | $13,500 |
| Revised Annual Cash Flow | $14,500 | $500 |
| Cash Flow | 1.3% | 0% |
Summary
If you are interested in buying a property in Whistler for investment or lifestyle please contact me. It may not be a ski-in ski-out property you are after, but I know I can help you secure the right property.
Marion Anderson Personal Real Estate Corporation
marion@WhistlerSkiinSkiout.com (604) 938-3885