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Fortunes have been made investing in property in Whistler, BC, which now has the most expensive real estate in Canada and some of the most expensive in all of North America (a not particularly large house is on the market for $20 million). But is this game over? Should the astute investor be long or short the Whistler property in his portfolio? And if he’s considering investing in Whistler properties, what types of properties offer the best bet for both current returns and capital appreciation?

In the past, the smart money has invested in off-plan condominiums and townhomes. These developments have offered investors the opportunity to purchase a property before the land has been broken up with a small deposit, with additional payments as construction progresses. Time and time again, these properties have been “invested” before additional payments for substantial gains were due. If you only had to contribute 10%, but the value of the property has increased by 20%, you could see a 200% return on your money in just a few months. This was done over and over again; it was a game in which fortune favored the bold. A famous investor turned $10,000 into $50 million in 10 years by repeatedly playing this game.

Of course, this is a game of leverage and when prices start to drop, leverage quickly works in the other direction. This is starting to happen in Whistler now, where investors in the Four Seasons have taken a severe haircut as prices didn’t rise as expected. As a result, the secondary market is now teeming with rooms for sale at prices that, in many cases, are significantly below the price originally paid to the developer, implying a substantial loss to the original investor.

So are there still attractive opportunities for investors in Whistler? If you’re willing to bet on a change in visitor demand for the resort (certainly the underlying driver of investment value), then there may be. But where should you look? A very noticeable factor in the recent recession was that the fringes suffered more than the center: visitors wanted to be in the Village or within walking distance of the Village, and properties outside of this area suffered disproportionately. So if you need the performance while you wait for recovery, focus on homes near downtown. There are home opportunities in Northern Lights, where you can pick up a 4 or 5 bedroom townhome within an 8-minute walk of the Village and gondolas for $1.6 million. In the middle of the Village itself, you can find a 2-bedroom apartment for around $600k. Yields on these properties hover around 3-4%, much better than properties in the outlying areas, which rarely exceed 1%. If you’re more of a speculator and not so concerned about short-term returns, you can look for a property in Taluswood on the lower slopes of Whistler Mountain at a deep discount.

In either case, you should seek the advice of an experienced and skeptical real estate agent while also speaking to a professional property manager about how much your property can really be expected to earn while you wait for the market to recover.