Can you break even on a ski condo?

[Hawk]

The difference is that insurance companies have seen an increase in losses so they are paying more attention and raising the price of insurance. The amount of questions we got on who is renting and how often was unpresidented.

 

[CarlG]

Let's say you could purchase an older, lower end, but almost ski in ski-out, condo without needing a mortgage at a fairly popular resort in the north east (for sake of argument something like a 2 bed at Winterplace at Okemo......). And your family would use it for the popular times (Thanksgiving, Christmas, Presidents, couple summer weeks). Would you be able to get any rental income to cover taxes, utilities, upkeep, HOA fees, rental fees, cleaning fees with rentals the other times? Or unless something is available the peak weeks its hardly worth even trying to rent it. And older units aren't popular any more? Interested to hear from anyone who does this? Do you even bother with the pain of trying to rent?

I’m an STR owner at Mount Snow. I won’t hazard a guess on break-even without knowing your carrying costs and nightly rental rates. But you should be able to look at both of those and determine break-even occupancy. I’d break occupancy into mid-week and weekends. I don’t know the Okemo market, but if demand is similar to MS, safe to say you’ll likely rent your open weekends. Awesome if weekends alone get you to break-even, or even something like weekends plus a quarter of your mid-week dates. But if you’re banking heavily on mid-week and/or off-season to get you to break even, and you need to run at break-even or better, it might not be the right investment.

 

[skiur]

The problem of heat being turned off is easily fixable with a smart thermostat that is connected to the wifi and can be operated remotely.

 

[jimmywilson69]

Or don't turn it down. How much does turning it down really save?

 

[abc]

The problem of heat being turned off is easily fixable with a smart thermostat that is connected to the wifi and can be operated remotely.

Not so “easily fixable” if you‘re not the owner of the rental unit!

It’s not the renter’s fault. It’s the owner’s fault, as you correctly pointed out. But when that owner is your neighbor, your insurance goes up as a result.

It’s only fair to apportion higher premium to unit that are being rented. (Unless, of course, they do extra to mitigate the risk of their renter’s behavior)

 

[Hawk]

We struggle with this all the time. Yes the owner needs to be proactive in monitoring the unit. Unit checks are an option but they are not in our current contract with the property management company. As a coutesy they do do checks just before really cold stretches. I mean to be really affective they would have to have a schedule of when people come and go. Eiither way that would be an extra cost also. Some people have the smart thermostats. The unit that caused the flood did not. The other kicker is that we have wood burning stoves/fireplaces in most of the units. We did all new 3 layer, insulated flues some years back and we have level 2 inspections of all units each year that incldue cleaning so that saves us from a huge hit on that. But would you trust renters to run a wood stove? We told the owners to not give the renters wood and that should mostly deter them from lighting fires but not all. We have had the building cleared a couple of times when renters started a fire and did not open the flue so the smoke alarm dumped the building. Not good also.

 

[drjeff]

The reality is that if one if buying a place with the aspirations of having it in a STR pool and being able to cover their expenses, #1 it potentially can be done, but certainly isn't a given #2 If you think you can use it for the prime weekends and cover your costs via STR the rest of the year, it can be done, but certainly isn't a given #3 There are numerous stresses as the owner of a STR over what your renters may or may not do while in your property #4 The fees that you as an owner will be paying (HOA fees, taxes, etc) almost always will be increasing year over year

 

[djd66]

Or don't turn it down. How much does turning it down really save?

In our VT place, we have a separate thermostat that is not hooked up to the heating system. It is connected to an alarm that will notify the alarm company if the temperature in the house falls below a certain level. In addition, I have sensors throughout the house that do a similar thing - they notify me via the app on my phone. Given wifi technology, this is pretty simple to install. I'm surprised condo's that pool the insurance would not require these.

 

[MadPadraic]

When we were buying our condo we researched the rental market a bit. We ultimately decided against renting, but like the security of having it as an option should we ever fall on hard times. The rental management companies will take your call and provide you with fee structures and expected income. They will also know the specifics of the market you are considering. For example, Sugarbush does a nice summer wedding business and hosts various graduation weekend events, does Okemo do similar (probably), and would your unit generate income from those? The management companies can also explain how much more/less they charge for services like managing listings, cleaning, maintenance, etc. Obviously the more DIY you are the higher your margin, but you absolutely would need someone local that has relationships with plumbers and electricians for emergencies.

I'd also think about your market/mountain match. To my mind, Okemo is the ultimate peek vacation mountain. It has that "family friendly" (in reality, aren't they all) reputation, and lacks challenging terrain. I'd think that that would attract young families that have to work around school holidays, but I'm just guessing here. How much would a dry (or wet and warm) January/Feb hurt rentals, and does your mountain see sustained demand in March or early April. Obviously weather will impact all mountains, but some will be more resilient than others.

Another question to ask is how high rents are during leaf peeping season? You may want to limit your rental to just 14 days a year for tax reasons; perhaps just foliage, Memorial Day, July 4th and Labor Day could generate enough to cover your carrying cost?

 

[skiur]

Not so “easily fixable” if you‘re not the owner of the rental unit!

It’s not the renter’s fault. It’s the owner’s fault, as you correctly pointed out. But when that owner is your neighbor, your insurance goes up as a result.

It’s only fair to apportion higher premium to unit that are being rented. (Unless, of course, they do extra to mitigate the risk of their renter’s behavior)

Well sure but that is something you have no control over and would be an issue wether you rent or not so it's not really applicable to the conversation.

 

[MadPadraic]

Or don't turn it down. How much does turning it down really save?

Easily over $150/mo if you are only up there for weekends.

 

[Shredmonkey254]

If you are an owner of a unit that is primarily used for STR, don't expect to be well liked by members of the community that either live full time or never rent. This may make your visits to your condo less pleasant than expected. Your voice in matters that affect the community may also not carry as much weight as those that have a greater interest in the complex.

Our unit was flooded out by a renter several years back and what Hawk says is all true. Our complex was dropped by the insurance company and put into a high risk pool for many years. Our high dislike of rentals is one of the reasons we just sold our condo. Short Term Renters are generally nothing but trouble.

 

[kbroderick]

@Hawk and @Shredmonkey254 have your complexes always been primarily owner-occupied/utilized? I don't know what the current situation is, but years ago, the complex my parents had a unit in at Sunday River was definitely more rental units than frequent owner use, and full-time occupancy was actually prohibited by the bylaws (albeit not enforced). I'd be curious if that's a general trend or more specific to certain locales.

I also thought that woodstoves and/or fireplaces in a condo complex was a bats*** crazy idea when that complex at Sugarbush had the fire a while back. I don't trust most people I know with fire, let alone a bunch of people I don't know.

 

[2Planker]

STR's completely ruined 2 of our friends condos, One simple 2 bdrm, and one massive trilevel 5 bdrm w/ pool, gameroom, 3 car garage...

The family said they could never live in it again after it was trashed by 100+ people on New Years Eve, Over $20K to clean it up, and mega fines from Town, & HOA

 

[BenedictGomez]

STR's completely ruined 2 of our friends condos, One simple 2 bdrm, and one massive trilevel 5 bdrm w/ pool, gameroom, 3 car garage...

The family said they could never live in it again after it was trashed by 100+ people on New Years Eve, Over $20K to clean it up, and mega fines from Town, & HOA

Where was this!?

 

[Hawk]

In our VT place, we have a separate thermostat that is not hooked up to the heating system. It is connected to an alarm that will notify the alarm company if the temperature in the house falls below a certain level. In addition, I have sensors throughout the house that do a similar thing - they notify me via the app on my phone. Given wifi technology, this is pretty simple to install. I'm surprised condo's that pool the insurance would not require these.

We bought those sensors also. They are a good thing exept when the power goes out and then you are blind. That's susually when we call the management company to stop by and check things out.

 

[Hawk]

@Hawk and @Shredmonkey254 have your complexes always been primarily owner-occupied/utilized? I don't know what the current situation is, but years ago, the complex my parents had a unit in at Sunday River was definitely more rental units than frequent owner use, and full-time occupancy was actually prohibited by the bylaws (albeit not enforced). I'd be curious if that's a general trend or more specific to certain locales.

I also thought that woodstoves and/or fireplaces in a condo complex was a bats*** crazy idea when that complex at Sugarbush had the fire a while back. I don't trust most people I know with fire, let alone a bunch of people I don't know.

At my complex, yes mostly owner occupied as long as I have been there. It has not been part of the Sugarbush pool for over 40 years. Sunday River is different. Most of the units there were built during the Les Otten era and part of the mountain pool. I know it is different now but there is a much higher rental percentage.

 

[abc]

@Hawk and @Shredmonkey254 have your complexes always been primarily owner-occupied/utilized? I don't know what the current situation is, but years ago, the complex my parents had a unit in at Sunday River was definitely more rental units than frequent owner use, and full-time occupancy was actually prohibited by the bylaws (albeit not enforced). I'd be curious if that's a general trend or more specific to certain locales.

I think it‘s specific to the complex.

I’ve seen both type in the same town.

 

[zyk]

@Hawk and @Shredmonkey254 have your complexes always been primarily owner-occupied/utilized? I don't know what the current situation is, but years ago, the complex my parents had a unit in at Sunday River was definitely more rental units than frequent owner use, and full-time occupancy was actually prohibited by the bylaws (albeit not enforced). I'd be curious if that's a general trend or more specific to certain locales.

I also thought that woodstoves and/or fireplaces in a condo complex was a bats*** crazy idea when that complex at Sugarbush had the fire a while back. I don't trust most people I know with fire, let alone a bunch of people I don't know.

I don't trust my adult children with the woodstoves and we've heated strictly with wood for 15 years...

 

[BodeMiller1]

Breaking even would be hard (close to mathematically impossible) . In my only experience at a ski area I lost my shirt. Took a hit of $15,000 - to $20,000. Buying a beat up old hunting camp in Maine was worth every penny. It was especially nice after we got all the dead animals out.

Bought the place to ski, never did at least at the resort.

The problem with Condos is they get rented out. In and of it self not a problem butt, at ski resorts people go to have fun. Not all fun is equal.

(hard to believe I get meowed at for misspelling butt, but no one calls me out for where the comma is placed)

At any rate, location, location etc. Interest rate (lock it in). Join the board so you have control, meow...