Out of State - Ski Property - Short Term Rental

[Jon Steffen]

Good Day,

I've been looking into purchasing a ski house or condo that I would rent out for the popular seasons, in a popular ski area in Colorado (Avon, Aspen area, Breckenridge etc). I live abroad in Bermuda and I'm currently unable to buy property there due to restrictions and transaction taxes. Given that we like skiing as a family activity and wouldn't mind moving to Colorado at some point this seemed like a potential option.

Where I'm struggling on this is that it seems that the economics don't really make sense given property prices, mortgage rates, and occupancy. Cap rates seem pretty low relative to mortgage interest rates.

Has anyone seen this model work in this economic environment?

Thanks for your thoughts on this.

Jon

[James Carlson]

Quote from @Jon Steffen:

Good Day,

I've been looking into purchasing a ski house or condo that I would rent out for the popular seasons, in a popular ski area in Colorado (Avon, Aspen area, Breckenridge etc). I live abroad in Bermuda and I'm currently unable to buy property there due to restrictions and transaction taxes. Given that we like skiing as a family activity and wouldn't mind moving to Colorado at some point this seemed like a potential option.

Where I'm struggling on this is that it seems that the economics don't really make sense given property prices, mortgage rates, and occupancy. Cap rates seem pretty low relative to mortgage interest rates.

Has anyone seen this model work in this economic environment?

Thanks for your thoughts on this.

Jon

Unfortunately, there are two potential barriers to ski vacation rentals in Colorado. 

Here's what I see from our STR clients.

1. Places like Breckenridge (and Summit County, where Breck is located) have caps on STR permits and are well beyond those caps.

2. Ski areas thar don't have caps like Vail, Steamboat Springs, etc don't make sense numbers wise.

Solutions? Either A) you need to want a ski Airbnb/VRBO for the personal use of it but not the investment aspect of it or B) you need to be okay with some of the areas within 45 minutes of the ski areas that are totally open to short-term rentals and where the numbers are better. (Leadville, Fairplay, etc)

Good luck.