Ski Condo: Buying for Personal Use and Income

[BeanoNYC]

Does anyone own a condo up in ski country and rent it out on the weekends that they are not up there? I was wondering what expenses to expect and if it's possible to come close to breaking even.

 

[wa-loaf]

http://forums.alpinezone.com/17357-do-you-own-one-more-condos.html

 

[BeanoNYC]

Thanks, Jens.

 

[ALLSKIING]

From what I understand Rich is that you really have to have it rented for the whole ski season to break even. Summer is not much help since its so slow. Going in with a partner could work.

 

[madskier6]

It also really depends on where the condo is (i.e. at what ski area), how close to the mountain it is, how much skier traffic the area has, etc.

I personally found out the hard way that if you want a condo for personal use, the best route is not to buy but to look for a good seasonal rental at your mountain of choice. This is mostly true if money is an issue (i.e. you're not wealthy enough to be able to suck up the expenses). It's much easier to just rent a condo for the season & let someone else have the headaches of ownership, condo assessments, maintenance, etc.

When it became financially tight for me to own my condo, I ended up renting it out for the season just to be able to hold onto it. I then asked myself, why do I own this condo if I have to rent it out during ski season in order to be able to pay for it? The whole reason I bought it was so I could use it to go skiing whenever I wanted.

If you're a real estate investor & have the working capital to sustain the thing, then my advice does not apply.

 

[Geoff]

In Vermont where the state has a state-wide school property tax, it's difficult to break even. If property prices keep correcting downwards, it might start being more possible.

 

[GrilledSteezeSandwich]

I saw a one bedroom condo available at Sugarbush for $40,000..probably really rundown but still..uber cheap..but for that I could afford hotel rooms for decades

 

[BeanoNYC]

I saw a one bedroom condo available at Sugarbush for $40,000..probably really rundown but still..uber cheap..but for that I could afford hotel rooms for decades

That's the listing that got me thinking...

 

[ski_resort_observer]

The only listing I know of at that price is for for a 3-season share of the unit and it's at the Powderhound which is 100 yards down Rt 100 from the Golden Lion. The owner wants to retain the summer season. it's been on the market for several months.

It does depend on where it is. A 1 BR at Smuggs or Stowe would get rented quite abit in the summer. Several other resort areas are busy during many summer weekends. Last summer was the busiest ever at the Bush.

You have several options on how the short term rental is set up either thru the resort or a private prop management company. You just have to do your due diligence and crunch the numbers. A small one bedroom unit $40,000 - 80,000 your prop taxes won't be very high. If you see a unit your interested in it's easy to find out the rental history and determine if the rentals would pay the mort/taxes. As with all condos, knowing the monthly condo fee is important as it can vary quite a bit.

Prices are low, interest is down and there is a alot of units for sale......not a bad time to pull the trigger.

 

[GrilledSteezeSandwich]

That's the listing that got me thinking...

I wonder if the Obama first time homebuyer 8k credit would apply??? I'd put 50% down..and hopefully get 50k for it in a few years..but realisticly..I only spend 10-15 days a season in VT due to the drive...so staying in hotels is the way to go for me..

 

[BeanoNYC]

I wonder if the Obama first time homebuyer 8k credit would apply??? I'd put 50% down..and hopefully get 50k for it in a few years..but realisticly..I only spend 10-15 days a season in VT due to the drive...so staying in hotels is the way to go for me..

That credit is for primary residence only. It's also 10% of the home value, up to 8K

 

[GrilledSteezeSandwich]

That credit is for primary residence only.

I figured..unfortunately I'm not going to take advantage of it as apartment living is treating me well..oh well what's 8k in tax savings..:blink:

 

[Glenn]

I've "heard" (take with a grain of salt) that some banks are leary about giving loans to purchase a condo. Apparently, a lot of banks were underwriting the loans with the thought that people would rent them and be able to pay the bills. This primarily happend in FLA. . I talked to one loan officer in VT who said their bank wasn't giving out loans if you could find a condo/unit for rent in that complext on the interweb. Example, if you googled "Seasons Condo, Mt. Snow, rentals" and found a rental...even if it wasn't your unit, they probably wouldn't finance it.

Again, just what I heard. And this was from one bank. I'm sure others have different policies.

 

[drjeff]

I've "heard" (take with a grain of salt) that some banks are leary about giving loans to purchase a condo. Apparently, a lot of banks were underwriting the loans with the thought that people would rent them and be able to pay the bills. This primarily happend in FLA. . I talked to one loan officer in VT who said their bank wasn't giving out loans if you could find a condo/unit for rent in that complext on the interweb. Example, if you googled "Seasons Condo, Mt. Snow, rentals" and found a rental...even if it wasn't your unit, they probably wouldn't finance it.

Again, just what I heard. And this was from one bank. I'm sure others have different policies.

I'd venture a guess that many a lender would also be considering upping the percentage required for the down payment for a 2nd home nowadays too. Afterall we seem to be entering this "radical" new era in mortgage lending where companies are actually interested if you can actually afford the property you're considering! :lol: Gotta look into that (and what my place will appraise for nowadays compared to 2 years ago when I bought it ) to see if I can re-fi at todays great rates and knock almost 2 percentage points off my mortgage, thus freeing up some extra $$ for when the People's Republic of VT likely comes looking for a little extra $$ in the near future

 

[BeanoNYC]

I'd venture a guess that many a lender would also be considering upping the percentage required for the down payment for a 2nd home nowadays too. Afterall we seem to be entering this "radical" new era in mortgage lending where companies are actually interested if you can actually afford the property you're considering! :lol: Gotta look into that (and what my place will appraise for nowadays compared to 2 years ago when I bought it ) to see if I can re-fi at todays great rates and knock almost 2 percentage points off my mortgage, thus freeing up some extra $$ for when the People's Republic of VT likely comes looking for a little extra $$ in the near future

Now do you have a condo or a home up there, Jeff?

 

[drjeff]

Now do you have a condo or a home up there, Jeff?

The hybrid version, the townhouse

 

[BeanoNYC]

The hybrid version, the townhouse

Hmmmm....You don't happen to know Dr. San Roman?

 

[Glenn]

I'd venture a guess that many a lender would also be considering upping the percentage required for the down payment for a 2nd home nowadays too. Afterall we seem to be entering this "radical" new era in mortgage lending where companies are actually interested if you can actually afford the property you're considering! :lol: Gotta look into that (and what my place will appraise for nowadays compared to 2 years ago when I bought it ) to see if I can re-fi at todays great rates and knock almost 2 percentage points off my mortgage, thus freeing up some extra $$ for when the People's Republic of VT likely comes looking for a little extra $$ in the near future

Bingo. According to my research, they're looking for at least 20% down on a second home. I believe the technical banking term here folks is "Owner Occupied Vacation Home". Apparently, lots of banks aren't doing PMI on a second/vaca home. So, no PMI means you need at least 20% down.

I agree Jeff. Darn those lenders for requiring people to be financially stable before they take on more financial responsibility. :wink:

 

[drjeff]

Hmmmm....You don't happen to know Dr. San Roman?

Not yet atleast

 

[o3jeff]

I think banks now are looking for 20% down pretty much on any home loan, primary or vacation.