Investing in Short Term Rentals in Kelowna, BC

 Investing in Short Term Rentals in Kelowna, BC

What to Expect When Investing in Short Term Rentals in Kelowna, BC

So you’re thinking of investing in the Kelowna Real Estate Market? Well you’ve come to the website! 

In today’s blog and video (scroll down) we are going to be talking about investing in Short Term Rentals or STR’s here in the Kelowna and Okanagan market.

Here's what we will be covering in this video and blog post:

  1. The cost of purchasing for those of you investing from outside of BC

  2. Home Prices and what to expect

  3. The cost of carrying the property

  4. The buildings that allow for STRs in the Kelowna Market

  5. How to set up your STR for massive positive cash flow

The Cost's of Investing in Kelowna, BC

Ok let’s jump into the cost of purchasing a property here in Kelowna and BC, now if you are an investor from Saskatchewan or Alberta you likely aren’t familiar with a land transfer tax.

If you are purchasing an investment property or simply making a move to BC you will have to pay a tax out of pocket at closing time of 1% on the first $200,000 and 2% on the balance up to $2 million dollars.

Now, on top of that tax, because you are an investor, the BC government has seen fit to penalize you even further. If you are investing in Kelowna or in West Kelowna you will also be subject to a ‘sunshine’ or speculation tax of .5% of the assessed value of the home.

This is applied if you plan to have renters in the property or if you spend less than 6 months in the home in total.

This can be a shock to the system so make sure you are prepared and that you have enough cash to close on top of your regular disbursements as well as legal fees which can run between $1500 and $2500 dollars.

Because this is an investment property you will need at least 20% of the purchase price as a downpayment. Your deposit (which here in BC is held by the buyer’s agent’s brokerage) should be around 1.5 to 3% of the purchase price depending on the price point of the home.

Ok last point about cost’s…GST. Yes, there is a VERY good chance that GST will be applicable in the purchase of an investment property for the use as an STR.

The best thing you can do is to consult with your accountant PRIOR to making an investment like this so that you can get your financial situation set up properly prior to making an offer.

Kelowna's Home Prices

Ok now that’s out of the way let’s look at point number 2 which is home prices here in the Kelowna area. If you are not wanting to put down a large downpayment then it is important to keep your purchase price lower. 

That means you are likely looking at apartment style condos as an option or half duplexes as opposed to a single family home. 

With the benchmark sale price of single family homes here in the central okanagan in October of 2022 running around $980,000, your downpayment amount would have to be $196,000.

Some of the condo options that are seeing right now in buildings that allow for STRs are in the mid $500k range so your downpayment would be about half which would allow you to look at multiple properties as opposed to just one.

The Cost to Carry Your Short Term Rental in Kelowna

Your cost’s to carry are going to be similar to what you would have in your current province, you’ll have property taxes and likely condo fees and of course you will likely need a property manager to ensure your investment is being looked after.

Expect your condo fees to be somewhere between $400 and $800 per month, again, depending on the building, the size and location. 

Your property taxes can range but likely won’t be less than $2000 per year, always factor in the high side and if you need some help with determining taxes a lot of times it is right on Realtor dot ca.

If you are purchasing a single family property you will have all utilities that you’ll be responsible for and in condos typically you’ll be on the hook for just electricity. 

That being said, some buildings include all of the utilities into the condo fees so make sure to inquire about that up front.

You will need to buck up for Netflix, cable and possibly an alarm of some kind if you are in the single family market. 

Lastly, your property management fees for STRs will run you anywhere from 20% to 40% of the gross revenue.

I know, I know, it sounds high but think about it for a second, the PM is turning over your property every 3.5 to 5 nights. They are refreshing towels and toiletries, replacing dishes and cutlery, making sure the coffee is stocked and that the property is spotless and ready for the next guest.

What Buildings Allow Short Term Rentals in Kelowna?

If we are investing in condos in the Kelowna market then you will need to know which buildings allow for STRs.

Recently Kelowna city council decided that any new building that is built will not be allowed to offer short term rentals, so there are a set number of buildings in Kelowna that allow for them.

Here’s the list:

  1. Brooklyn

  2. Barnoa Beach

  3. Copper Sky

  4. Discovery Bay

  5. Playa del Sol

  6. St Paul

  7. Sole Downtown

  8. Sunset Waterfront

  9. The Cove

If you are looking for listings in any of these buildings then make sure to reach out and send me an email at and I’ll send them over to you right away.

If you are looking at a single family, make sure it isn’t a bareland strata, most of these will not allow for STRs. Also, if there is an HOA or Home Owner Association, make sure to check in the bylaws to ensure that they allow for STRs. 

How to Set up Your Kelowna Short Term Rental for Maximum Positive Cash Flow

The last point, point #5 is how to set your STR up for maximum positive cashflow.

So let’s use an example of a property in Playa del Sol listed by Century21. A 2 bedroom 2 bath top floor unit that is currently asking $580,000.

So let’s say you put down your 20%, you’ve paid your sunshine tax, your land transfer tax and you’ve employed a property manager to help you get this investment of yours rented out.

What you’ll be looking to do is make this unit available between May 1st and September 30th for nightly occupancy.

These are your PRIME months to maximize.

You could be looking at anywhere from $200-$500 per night in this building during those months. So let’s take the median at $350 per night.

What we know is that most Air BnB property management companies can get you rented for 21 days out of the month, so let’s just go based off of that. You may be full up for those months, but again, let’s make sure we err on the side of caution.

Your gross monthly revenue would be $7350. Now, you’d take off of the PM fees of 20% and you’re left with $5880. Condo fees on this property are $730 so now you’re down to $5150.

Your mortgage payment based on a 5 year fixed of 5.7% would be around $2600 which would leave you with $2550 and property taxes at $180 per month would bring you to a grand net total of $2370. 

Now, that doesn’t sound like a lot but remember that we were conservative on the occupancy, if you added another 9 days to that number you could be a lot close to $5k per month.

Once October 1st rolls around you are going to want to find a short term tenant for this property, October 1st to April 30th would be ideal. Expect your monthly rent on a property similar to this to be around the $2400 to $3000 per month mark.

If you want to get deeper into the economics of how the monthly and the STR can work together then let’s schedule a call. 

When you’re looking to invest in the Kelowna real estate market, it’s important you have a full time guide with multiple years of experience to help you along the way.

If you are interested in booking a call with me you can call or text 403-827-7527 or send me an email to


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