New Member: Investing in VT Ski Areas

[Stephen Fydenkevez]

Hello everyone. My name is Steve fydenkevez, and my wife and I are looking to enter the world of real estate investment.  We were married recently, and when we add in our wedding gifts with what we have been saving on our own for years, we feel that we are finally ready to pull the trigger on our first property purchase.

We actually live about 90 minutes south of the ski area that we are looking to invest in, but it is an area that I am very familiar with as I have been going there my whole life. Our target purchase is a single unit in a townhome complex. These units run roughly 100k and rent for about 250$ per night, just to give a scope for our type of starter investment.

Between my wife and I, we have a grand total of 0 years in real estate investment experience, but we really believe in the area and real estate we will be investing in. I personally have dumped thousands of dollars in renting these units over the years and have seen townhomes filled on a weekly basis.

We are looking forward to communicating with many of you and learning from any and all of the experience you are willing to share with us.

Thank you for taking the time to read our intro, we look forward to speaking with you.  

[Blair Knowles]

Hi Stephen! Congratulations on your decision to invest. I like your plan of investing in vacation homes. It sounds fun! Never under estimate the power of good old fashioned fun in real estate.

I have a couple questions/ideas for you. If you live 90 minutes south how will you mange the turnover? Unlike tenants on a year long lease you will be managing quite a bit of turnover on a vacation rental. Will you rent through Air BnB? Or Craigslist? Are you buying in an association that will provide cleaning services? Many of the associations in ski resorts/towns have this option especially if the unit is on the mountain/resort.  I doubt that you will want to drive 90 minutes to clean the unit every time it turns over. Especially when you get to the point when you DO have your 10 rentals across the country (I've read your profile- I like your goals). I would start by calling/emailing the different condo/townhouse associations. As them a couple of key questions. See what different associations offer. Get a feel for the differences.  If you can't get anyone at the association to be responsive you can always ask the listing agent of for sale condos/townhomes. 

ASK:

1) How many of your units can be rentals? Is there a rental cap? The LAST thing you want is to buy a unit that the association will not allow you to rent out. You probably wouldn't get to a closing without figuring that out, but it's something to keep in mind from the start. Some associations allow 30% of their units to be rented. Some allow more. Associations have rental caps to protect the owners and the resale values in the association. If an association becomes largely rented out with few owner occupants banks will not lend on properties that are for sale in that association. It becomes risky in the banks eyes. Owners suddenly own properties that no one can get financing on and that they can't sell. It's a mess. Rental caps are a good thing. If you get serious about a particular unit ask to see the associations bylaws/rules/and regulations. Along these same lines some association in ski areas restrict the number of months you can rent your unit in a year. 

2) Do you provide management/cleaning services? What percentage of my rent would you charge or is there a flat fee for each cleaning? Do I have to go through the associations property management services or could I hire someone independently?

3) Are there currently any special assessments on the complex? How are special assessments decided? --- An example of a special assessment is when the association has three buildings that all need new roofs. There is not enough money in the associations reserves (built up over time from members monthly association dues)  to pay for the repair of three roofs. The association decides all members need to pay an additional $150 a month for 6 months to pay for the repairs. You have to pay- even if they are repairing roofs that are not on your unit. 

4) Is there a/ how much is the monthly association fee? What is included in the fee? (Trash, water sewer, landscaping, outside maintenance?) 

I hope some of these thoughts help. There is a lot to look out for when you are buying into an association. I would recommend working with a local agent as well as having a real estate attorney review the financials and association docs. The upside to associations is that you will be able to leave the property and know that there is someone managing the grounds outdoor maintenance etc. 

Good Luck!