Do you own one or more condos?

[wa-loaf]

I got thinking today about owning property at a resort as a source of income.

I'm curious how many people have property that they rent out for the season. Do you do it weekly or for the whole season/year? Do you manage it yourself or use one of the local property management co's? And finally after your mortgage and taxes do you run a profit?

Thanks for any info. :grin:

 

[L2RAFO]

I do, but my situation doesn't apply to your question, so my answer is coming from some internet work I did for a friend's family holdings in Colorado.

They had/have five units at Copper, and two in Aspen. The units in Aspen could only be handled through the management company, and two of the five at Copper had similar restrictions.

Obviously, you can get around that deal if you are dead certain that the people you are renting to will only interact with you, have no problems during their stay, and won't get hammered, and belch out your private arrangement to the hot, site manager's daughter in the hot tub after a great day on the hill.

Otherwise, I suggest that you get a place that you have some local control over, and have the option to handle personally because the typical management take is 50% ( and most still take 30% if you do the booking yourself ).

Either way, these folks, and many others that I know, have not even come close to breaking even during some years, and cleaned up in others ( as you would guess based on seasonal snowfall, disposable income rates, etc. ).

 

[Vinny]

We own a quarter share at The Grand Summit at Snow which we rent only as an adjunct to our usage. We've owned other ski property and over the years have done a lot of research on your question. IMO, if you're looking at it from purely a positive cash flow investment, I think there are far better choices (i.e. urban rental units). It's especially speculative if you're thinking of buying something on the "pray for snow" east coast. Aside from dramatic fluctuations in yearly snowfall, the capital appreciation of ski properties on the east coast vs. other choices has been dismal at best in all but a few areas.

Also, as you're probably aware, it's not just mortgage and taxes. There's heat, maintenance and repairs, cable/TV, utilities, closing costs to recoup, idle funds not making any interest (i.e down payment), advertising if you're not going to use an agency, insurance, etc. You have to be brutally honest with every penny you're spending because some deals that look good on the surface, are losers when you go through every detail.

Having said all that. This is just one opinion. Run ALL the numbers and good luck with your decision.

 

[madskier6]

I own a condo in the MRV on the Sugarbush Access Road. I bought it for my own (and my family's) use but we have rented it out on occasion, mostly to help with expenses. We first rented it out on a short-term basis (a week here, a month there) but last year we rented it out for the whole season because we got hit with a large condo association special assessment.

That's another big expense IMHO, the condo association dues. If you're buying a condo, make sure you look into what those expenses are and whether there are any special assessments on the horizon.

I don't have a management company doing the rentals. I do have a local real estate broker who specializes in short & long-term rentals finding renters for me. Broker gets 35% of any short-term rental & a maximum of (i)15% or (ii) $1,500 on seasonal rentals. That part has worked out fine. My condo assoc has a local manager who can respond to maintenance issues that arise so I don't have to drive up there (3 hours for me) to fix something for a renter.

My advice is don't buy a condo in the East as an investment property. Only buy one if you plan on using it yourself or for friends & family members. The economics just don't work out real well unless you're going to hold onto it for 20 plus years and it will generally appreciate in value. I bought it because I wanted to ski my ass off & have a place to stay. My children were younger then & it was a great way to get the family together & ski all the time. Now my kids are getting older & while they still love skiing, they are also interested in doing other things on the weekends ("Dad do we have to go up there again this weekend? We were just there and there's a lot going on with my friends this weekend.").

My personal financial situation has changed somewhat (my children's non-skiing activities are more expensive than they used to be, among other things) and it now doesn't make financial sense for me to keep it. Unfortunately (for me & my skiing habit), I've had to put my condo on the market. Anyone interested in buying a spacious, affordable condo in the MRV?

Seriously, I have no regrets because I bought it for my use & we've had some great times there. It was not, however, a great financial investment. But that was not my purpose going into the deal.

 

[JPTracker]

We bought a slopeside condo up at Jay several years back. As a pure investment property with no owner usage it is a bad investment. We rent out unit through Jay and they take 40% off the top. I looked into renting it out myself and with all the package deals they offer with the rentals it was better to let them rent it out.

With that said buying the condo has been the best investment we made. We buy season passes every year. Ski 20 to 30 days a year and the income from the property covers all our expenses, except the mortgage. There would be no way we could afford that many ski days staying in slopeside accommodation's without the condo. Plus owning the condo we get to set it up the way we like and have an owners closet were we leave a lot of stuff we don't have to carry back and forth.

 

[TwinTips21]

My parents bought a condo in 1996 as a vacation destination for about 30k on Ascutney. They sold it last year for 110K. The only downfall was the capital gains tax but it was a good investment.

 

[Masskier]

I've been a full time real estate investor since 1983. I agree that ski Condos are not a cash flow investment. 80% of people who buy ski condos are making a life style decision, and will use some of the rental income to help offset some of the ownership costs. However there could be a tremendous upside if you buy at the right time and the right place. The baby boomers are now at their highest income level and net worth positions. And the numbers that are retiring every year is staggering. This is putting tremendous demand on the high end 2nd home market. They want to be waterfront, or on a golf course or a ski slope. There's been more ski areas bought and sold in the last 18 months than in many many years. Prime slope side develople land is very limited. Thus you have more density (condo hotels) in secondary locations and a lift that take you up to the other lifts and trails. High end slope side condos sell in the $700 to 1000 psf in the Northeast. Out west they rangen from $1,000 to 3,000 psf. Find an area that is unknown with good terrain and highway access. An area that is about to take off. An area like Burke. Thats where I'm putting my money.

 

[bobbutts]

If you have cash there should be some good values around the next few years. If you need a loan or are trying to sell it's not looking so hot right now.

 

[mlctvt]

My wife and I own a 3 bedroom condo at Mount Snow that we purchased 2 1/2 years ago. It has totally transformed our lives. We bought it for our own use and we use it year round. As Masskier says it was a lifestyle decision. Before we bought we'd ski about 8 days year due to cost of skiing, lodging, dining out etc. Last year we skied 31 days and we rented the unit out a week per month to the same family. This year our cash flow is better and we’d like to ski even more so we keep it to ourselves and we won’t rent it.
It’s very difficult to make a “profit” from a ski country condo. In our case just the taxes, condo fees and upkeep amount to over ½ of what an entire winter seasonal rental would bring in. This doesn’t include a mortgage or loss of other income you would have received on the money you used to purchase the place. I don’t think anyone makes a true profit but renting can help. If you bought 8+ years ago when values were 40% of what the places sell for today you might make a profit. One option that worked well for us our first year of ownership was a ½ share rental. We rented to the same couple every other week. They also paid ½ of the seasons utilities, heat, electricity, phone and cable. This worked out well and really helped keep the costs down but we only got about 20 ski days in that year and wanted more. It also seemed that the good snowfalls always happened on our tenant’s weekend J . Having the same tenants keeps wear and tear down but the downside is you get slight less money than if you rented on the open market week to week. The security of knowing our tenants and knowing the place wouldn’t get trashed was very important to us so the seasonal rental was our best option.
Our first year we used an agent and paid 15%. The second year we rented to the same tenants as the prior year and managed it ourselves.

 

[wa-loaf]

Thanks! That's all great info. Not planning on anything in the immediate future. But I'll probaby want a place in a couple years for the family, so I just wanted to hear what sort of arrangements other folks have.

 

[Vortex]

I have one that I may rent out or sell. I own one that is for personal use. Seems like alot of work to rent it out, but anything new seems diffucult.

 

[SkiDork]

This topic was discussed recently on KZone - there's some decent info here:

http://www.killingtonzone.com/forums/viewtopic.php?t=17974

 

[Lostone]

I bought one at Sugarbush in 98. It was never planned as a rental unit, tho that was one of the possibilities.

When they told me all I would have to do, to rent it out, I decided it was too much of a hassle. Decided to keep it for my own use.

It was just a one bedroom, but I figured it would be great for weekends. The first time I walked across the mountain to get to the early lift on a powder day, I knew I was in a new world! :beer:

In '04, I decided I'd had enough of the working life and moved into that little one bedroom. I'm writing this from there. It is a new world.

Be careful buying one of those ski condos. :-o Strange things can happen to you! :lol:

 

[snowman]

Thanks! That's all great info. Not planning on anything in the immediate future. But I'll probaby want a place in a couple years for the family, so I just wanted to hear what sort of arrangements other folks have.

I was just thinking the other day that the real estate melt down is going to continue for a while yet. Stuff like the sub-prime loan disaster are going to power it to a Chernobel like level. At that point, even semi well-to-do people that are living a little beyond their means will start liquidating their second homes.... :idea:

 

[wa-loaf]

In '04, I decided I'd had enough of the working life and moved into that little one bedroom.

I don't know how my wife and kids would feel about moving into 1br condo. Although I'd probably be living there by myself in no time. . .:lol: :idea:

 

[wa-loaf]

I was just thinking the other day that the real estate melt down is going to continue for a while yet. Stuff like the sub-prime loan disaster are going to power it to a Chernobel like level. At that point, even semi well-to-do people that are living a little beyond their means will start liquidating their second homes.... :idea:

Yea, It'd be nice to have the capital to snach up some cheap real estate while the market is in the pits and sit on it for a few years.

 

[SKIQUATTRO]

instead of looking at 'ski area' condos/investment properties, look at buying a small single or 2 family home in some "not so nice areas" and get Section 8 tenants..they goverment pays their rent, so you get a check directly from the govt every month....as well as having a positive cash flow, your property is gaining value (appeciating)...so pull some of that and go ski/stay/dine out everyweekend and it'll still be cheaper than owning up there....

 

[mlctvt]

Yea, It'd be nice to have the capital to snach up some cheap real estate while the market is in the pits and sit on it for a few years.

We'll see what happens to the market. Right now there has been very little to no reductions in prices, just a slower market with more time to sell. Condos in southern Vermont are still selling with prices that are the highest they've ever been. We bought our unit in the spring of 2005 and prices have increased 10-15% since then. I'm sure there will be some correction, but most professionals predict we won't see the reductions we saw in the late 80s but who really knows. We bought for long term so we’re not too concerned about a downturn. I just haven’t seen any real bargains out there yet, at least in Southern Vermont. Maybe in other areas?

 

[drjeff]

When I bought my place this past May at Mount Snow, the price I paid was just under 15% below the original list price.

Still for the sellers it was well just over double what they originally bought it for just over a decade ago.

The Real Estate agent that I went through told me that the spring sales this year were just about what would occur in a normal year, the only difference is that the $500,000 market was running slightly ahead (most likely do to a fair number of new construction properties in that range compared to years past), while the under $500,000 market was slightly below past years averages.

So far, the seasonal rental program where I own is right on past years levels for this time of the year. We'll see how the next 12 or so months play out with respect to the economy, interest rates and the mortgage lenders.

 

[highpeaksdrifter]

We'll see what happens to the market. Right now there has been very little to no reductions in prices, just a slower market with more time to sell.

Same in the ADKs. Prices have come down a little and houses are for sale longer, but nothing earth shaking. I'd been waiting to jump in the last 2 years and finally bought a house 4.5 miles from Whiteface last month. Maybe I could have done better if I waited until next year (time will tell), but right now I couldn't be happier.