“My hubby owns a condo in Whistler with his sister, they bought when she suckered him into thinking this was a ‘great investment’. Currently, the thing is worth about what they paid for it, 10 years ago.”

“My hubby owns a condo in Whistler with his sister, they bought about ten years ago when she suckered him into thinking this was a “great investment!” (He didn’t know me then, if he did, believe I would have hit him over the head with a frying pan before letting him go through with this bad investment.) Here are the numbers:
– The condo cost about $225k. It’s in a rental pool, meaning the property management company takes 40% of every dollar earned. The condo owner is on the hook for everything-strata fees, hydro, property taxes, maintenance, updating the suite etc. Oh, and a mortgage.
– Every single year since they’ve owned it, they’ve lost about $10k per year. I did some quick calculations and came up with the strata fees, property taxes and property management fees take up 94% of their revenues. So, even when they don’t have a mortgage on this sucker, they are guaranteed to lose money, or make pennies.
– Currently, the thing is worth about what they paid for it, ten years ago. If they’re lucky. Property in Whistler doesn’t look so hot these days, despite his sister telling me for years she was going to be a millionaire after the Olympics. (Ya, right). I haven’t heard this lately from her. I wonder why.
– The other kicker? They don’t ski. When we go to Whistler, we’re not even allowed to stay in the condo (she’s the majority owner), because it takes away from the potential rental pool revenue. Ya, I’m a bit bitter about this damn investment, hubby’s trying to get out of it, as I’ve been throwing these numbers at him for ages. He just says “Uh huh” and looks pretty glum.
So my point in….never EVER should anyone ever invest in real estate with a family member. It’s bad news. I’ve come to the conclusion that the only person you should buy real estate with is your spouse. At least then if you get divorced you can sell and split the proceeds. With other family members, it can be a horror story if you want to sell, you’ll have to convince them to cough up the cash and buy you out. Good luck with that!!!”

— Dian as cited by Garth at greaterfool.ca 20 May 2012

8 responses to ““My hubby owns a condo in Whistler with his sister, they bought when she suckered him into thinking this was a ‘great investment’. Currently, the thing is worth about what they paid for it, 10 years ago.”

  1. Agreed, and my brother keeps trying to convince me to buy an investment property with him.

  2. Try to convince her to sell it as soon as possible before it is to late, when all the crowds will head for the exit from RE market at once.

  3. It pains the soul to realize how bad an investment property can be, all in, which is why so few investors do the math properly.

  4. “Ya, I’m a bit bitter about this damn investment, hubby’s trying to get out of it, as I’ve been throwing these numbers at him for ages. He just says “Uh huh” and looks pretty glum.” – anecdote

    Canoe goes farther if you paddle in the same direction. Work together, whether you overcome or hit the hills.

  5. You can force a sale via a court action.

  6. I still don’t get how the management company can get away with charging 40% management fee!!! That’s just f*ing nuts!

  7. This is a win-win for the management company. It gets a pretty lucrative management fee while all the capital risk is assumed by the purchaser. The only way the purchaser comes out ahead is if there is very good condo occupancy and prices keep appreciating.

    Invest in the management company, not the condo itself!

  8. Whistler Expert

    Just stumbled on this Whistler property management story… wondering if you are still upset about the investment. Normal level of real estate listings for sale about 1000… this week about 350. Prices soaring. Record snow. Record visits. Record profits. Please let us know what happened with the Whistler real estate investment.

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