Buying An Investment Condo in Collingwood -Blue Mountain: Part 4

In Parts 1, 2 and 3 of this series, we’ve looked at the things you need to consider 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?
• Additional costs when buying including Blue Mountain Village Association fees and, GST/HST

The next things you should consider are the realistic income and expenses associated with different programs and units.  In most cases, the rental property manager will be able to give you an idea of the annual gross income for units in a particular development.  These will vary if they are not in a rental pool or, if you use your own unit frequently thereby taking it out of the pool or program.  When you find a unit that holds particular interest for you, we’ll ask for an actual financial statement for it.

The costs vary quite a bit from one type of program to another and, they are subject to change, which all have, since their inception. 

Out of any gross income you generate on a unit that is part of the Blue Mountain rental program, you will have deductions from that for things such as travel agency commissions, credit card fees, call centre fees, maintenance, cleaning and of course the management fees.  In addition, you will generally pay for an annual or semi-annual deep clean of your unit and may have some expenses for furnishing repairs or upgrades.  If you are an out-of-country property owner, withholding taxes are also captured at this point.  About once a month, you will receive a statement itemizing these and showing your net income. 

From that net income, you will then need to pay for your municipal realty taxes, monthly  condominium fees, annual insurance costs and if applicable, Village Association dues,  Also, depending on the development, utilities, cable and phone  may or may not be paid separately or included in your fees.

As you can imagine, it doesn’t take long to eat into the gross income of a unit especially if you are using it frequently yourself and during prime rental periods.

All of this may sound complicated and really, it is at first however, the rewards can be worthwhile if your expectations are realistic.  In most cases, the rental income will offset all of the annual operating costs (except for any financing costs you may have) allowing you to enjoy luxury accommodations at a reduced cost while having ownership in a highly desirable area.

Part 1
Part 2
Part 3

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About Marg

is an award-winning real estate Broker who has successfully been helping people move since 1989. When it’s time for a move in or out of a bigger, smaller, better, more expensive, less expensive, newer, older, house, condo, farm, investment property, vacant lot or business, talk to Marg.

This entry was posted by Marg on Monday, May 24th, 2010 at 5:21 am and is filed under Blue Mountains, Buying Real Estate, Investment Property, Money Matters, Vacation Property. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.


  1. dmitri says:

    Thank you for you great article.
    One question i have, if I got this right, the rental income from the condo does not cover all of the expenses such as mortgage .. Are there any properties that are self supporting and offer cash flow?
    Thank you.

  2. Marg says:

    Thanks for your comment DK. It is very rare to find anything that cash flows after debt service in this area and certainly not in the Blue Mountain condos. Most will generate income sufficient to cover all or most operating expenses and some may even have a bit extra but rarely enough to cover any debt servicing unless it is very small. Having said that, I myself own a condo in town – not a recreational one, that I rent out on a monthly basis and the income covers almost all expenses including debt servicing. I love the leveraging involved in income properties which is where the true benefit comes in.

  3. John Barrie says:

    If I purchased a property in the village and it was not on the rental program; would I be able to decorate it and add my own funiture?

  4. Marg says:

    A unit can only exit the rental program by giving notice on June 1st each year and,only if rental pool participation is 80% or higher. In regard to doing your own furnishings, this could compromise you down the line when you go to sell your unit as the vast majority of buyers would want to be in the rental program and the cost to bring it in accordance could be quite high. There is also an annual Non-Participating Homeowners Fee that would need to be paid.

    If you are looking for a condominium where you can enjoy village life without the restrictions of the rental program, there are several other options in the immediate vicinity including the older units such as Cachet Crossing, Mountainwalk and so on.

    Thanks for visiting my blog.

  5. sr says:

    Is it still the case that the property will most likely not cover a mortgage (20% down) and no cash flow? Considering the low interest rates that can be obtained now and the cost of the unit. Does the owner have to pay any fees per day to stay in their own unit? A very informative article. Thank you.

  6. Marg says:

    Generally speaking, that is still the case. Although mortgage rates are low, they have been generally low for the last decade and the more recent lowering hasn’t had enough of an impact to change that. Owners generally do pay fees to stay in their own unit depending on where it is located and which rental program you are or are not in. For anyone thinking of buying a condo at Blue, it has to be taken on a case by case basis as there are so many variations from one development or program to another and an experienced REALTOR is key. Thanks for your comment sr.

  7. Debbie says:

    We have agrees on a purchase price for a unit on rivergrass. Just waiting for the documents from the condo corps to be reviewed by our lawyer.

    We wish to take it out of the pool and use it for our own Not really wanton to rent through the pool bit maybe renting on our own. We do not want to pay the Hst on sale of property. Does this mean we have to go into rental program. Just not sure about all this and don’t want to make mistake buying this beautiful property. We saw a few units that have been redone so would these units be rented by owner. If so are you saying that this is not such a good idea?

  8. Marg says:

    Hi Debbie. These are important questions that you need to know the answers for. I would suggest that you ask your agent to clarify in detail, each one and then confirm that with your lawyer. Good luck!

  9. leanna says:

    Fantastic articles! When you say you rent out your condo that is in town monthly do you mean you rent it out for a month at a time to different people or do you rent it on a month to month to the same people.

    I am also a Realtor and was thinking of buying a condo in the Blue Mountain area as our son just moved to Collingwood and I thought it would be nice to rent it and then have some weeks in the area. Now that I know the rental pool usually only covers the operating costs I think your idea of buying a condo in town sounds much more financially sound.

    Thank you for all your grea advice and I hope to hear from you.

    Also, can you explain why you say a small condo might be a better investment if in a rental pool?


  10. Marg says:

    Hi Leanna,
    We rent ours out to an annual tenant and it makes better sense if your goal is investment as you are not paying for utilities, cleaning fees, rental management fees, etc. It does not allow though for personal use. In that case, a condo up at Blue, where short term rentals are permitted would be a better option for you. the rentals can cover most or all of your operating costs plus allow you opportunities to use it and, you dont need to do a thing. feel free to email me directly if you wish to discuss specific options. Thanks for visiting the blog.

  11. Shannon says:

    Excellent article. Any thoughts on the value of Mountain Springs appreciating? It seems as though they are very economically priced. Is this because people don’t necessarily want to become involved with all of the strings attached to this type of a rental pool?
    You mentioned paying a fee while we as owners would stay on site. What type of fee with this be? Also… Do you know how we are charged by the rental pool to only rented out for a few months of the year? Is it per week that we are charged? Thank you in advance for all of your awesome info!

  12. Marg says:

    Hi Shannon. Those are a whole bunch of questions that are hard to answer in a few words so feel free to call me if you want to chat further. You’ve asked specifically about Mountain Springs and not Blue Mountain. In a nutshell, I think they are undervalued considering their position on the hill but they are older units now and showing their age. Having said that, the board is embarking on a project to upgrade things like rusty decks and that will go a long way to improving the appearance. They are not in a rental pool but you can use a property manager to rent them out for you or, you can do it yourself with a licence in place from the town. Generally, a unit that is available for rent most of the time will generate enough income to offset some or all of the operating costs but will not also may mortgage costs. They can be hard to finance due to the commercial zoning and nature of the units but there are ways to do it. All in all, a pretty decent investment for people who want to enjoy vacations and getaways but deflect of the costs.

  13. Linda says:

    Hi Marg,
    Like many you talk to I’m considering a purchase of a condo. I’ve seen some of the numbers from 2012 and 2013 but looking for more recent financial summaries. Do you know where i could access that?

  14. Marg says:

    Hi Linda. If you are referring to the Blue Mountain summaries, they no longer do them so that data is not easily available. A rule of thumb is generally a maximum of about a 3% return on your purchase value, not including the costs to service a mortgage. When you make an offer, you can certainly make it contingent on getting financial statements. I hope that helps.

  15. Chad says:

    In order to have the rental revenue offset the operating costs, what would be the maximum number of days for an owner to use the condo for his own use. I was hoping to use it 3 weekends during the winter and twice over the summer

  16. Marg says:

    That should be looked at on a case by case basis and of course, depends on when you use it. Prime weeks are things like Christmas, March break and long week-ends so they are pretty well guaranteed great rental periods when you should leave them available. With the limited usage you are referring to, I imagine you’d likely be fine.

  17. Elaine Daws says:

    Hi I am very interested in buying a condo and renting it out. We would like to stay a few times in a year. We would rent it 80 per cent. We would like to buy it with no worries of maintenance ourselves.I believe we could buy it with out a mortgage. We are planning on moving there in 3 years. That is when my youngest is done High School and we can leave Keswick! We are planning sell our house soon to rent until we move into the beautiful Blue Mountain Collingwood area. And to be rid York region.
    I hope you can give suggestions the articles were great!!

  18. Marg says:

    Hi Elaine and thanks for your comment. I have sent you a private email message and look forward to connecting.

  19. Rick says:

    Hi. Thanks for the article. Great information. When you say maximum 3 % return on purchase value. Can you explain? Does this mean if I buy a condo valued at 200k I could expect 6k in annual revenue? The statements from 2013 stated 20 to 30k. Thanks.

  20. Marg says:

    Hi Rick
    That is generally correct. Out of the gross income, you have to pay for the management of the rental, cleaning fees, charge card fees, condo fees, utilities, insurance, realty taxes and other expenses which in the end, may leave enough income to cover some or all of the operating costs plus 3-4% surplus to use toward debt financing. Having said that, it is very hard to finance a condo in a rental pool, such as one in the village, due to the commercial nature of them. I hope that helps anwer your question.

  21. Harry says:

    Hi Margaret
    Your article is really helpful, looking forward to invest in Collingwood and after reading your article seems that small investment would be great in the village. My concern is the appreciation (is it as much as the city) and also is it easy to sell or not

  22. Marg says:

    Hi Harry and thanks for your comment. As I mention in the article and in the comments below, these are great units for someone looking for personal use and wishing to offset expenses the rest of the time. If youa re looking for something strictly as an investment, generally the numbers will work better on something where you can have a single annual tenant in place and that would not be in the village. feel free to contact me by email if you’d like to explore further.

  23. Sunny says:


    Awesome explanations. We are looking at purchasing a unit in the village. We noticed that there are numerous for sale. Our intention is to solely rent the unit. We require advice and a helping hand. Thanks Marg.

  24. Marg says:

    Hi Sunny. Feel free to send me a private email at and I’m happy to help. It’s good to now the articles were helpful to you.

  25. Peter Wessenger says:

    It sounds to me that Blue Mountain condos are a very poor investment. Even if you own a condo outright (pay cash) and put it in the rental program and only use it once in a while you still have to pay when you stay there yourself. Why would anyone put up their own cash taking on all the risk and then get zero benefit. After reading the articles it sounds cheaper to not own and just rent. There is zero benefit to owning how do they get people to buy? To say that the condo associations are non profit is a complete lie; there is a lot of money generated that should easily provide income. Someone is making a damn good profit off the so called condo owners. In essence Blue Mountain is using condi owners invetments to finance the resort; this is a complete scam.

  26. Marg says:

    Hi Peter and thanks for your comment. Sounds like you’ve perhaps had a bad experience? I have several clients who have been quite satisfied with their investments and some who sold in the last year or two that generated a 30% profit by having good timing buying and selling. Still others have purchased from the US and have used units for “currency trading” and have done well. Other people buy the units to enjoy personally and then offset their costs fully with the rental. As you said though, there are others who it just doesn’t fit depending on their own situations – how much they use it, what kind of return they want/need, what their investment goals are, how long they want to own for, etc. If someone is strictly looking for an income property, there are certainly other options with a better return but they don’t allow personal use and are not fully managed. As I say, it depends on the buyers goals. Again, thanks for your input.

  27. Scott says:

    HI there! Great article. Thanks for posting it! I heard that the owner, in some cases, can only use the unit or rent it out for a specified number of days per month too. Is that the case? Like, if we buy a condo in the Village, we can only rent it out 4 months of the year? If so, after fees and 50% revenue sharing (according to anything on Jo Weider Blvd), you’re basically netting $1000 a month which wouldn’t cover anywhere near to the mortgage needed to purchase, even at the low interest rates these days…So for rental property potential, it doesn’t really seem a lucrative investment when you consider you could buy for $400,000 in an upcoming market and see 5-6% yield in equity per annum even without renting it. $12,000 per month vs. $20,000 (conservatively) is a vast delta even when considering that you would have to maintain the property yourself. Is it worth $8,000 per year to pay cleaning fees? I dunnow…so many questions though.

  28. Marg says:

    Hi Scott. You are not alone in your comment that there are so many questions! It’s quite different from buying a residential property. There are restrictions on owner usage if it is in the rental pool and that ranges from 6-10 days per month depending where you are in the Village. You are also correct that it will not generally cover the cost of full financing. These units are ideal for someone wanting to use it for a getaway now and then and, then offset the overhead with the rental income. If you are an investor looking for rental property return, the better option would be an annual rental of a detached home or condo in a residential area. I did a little video on this topic last year which may explain about returns a little better:
    Thanks for your comment.

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