Other than ego gratification, why would I buy a ski condo?

[Frank Adams]

So I was up in Vail last week, fresh powder every day, who hoo!. The condos we were staying in had 4 for sale and a buddy of mine was reading the sell sheet on a couple and asked my advice as an experienced investor.

I told him to forget it, unless he had a bunch of money to p**s away. He said he thought that owning might be a good hedge and that he would always have a place to stay in Vail.

Here's some relavent numbers on this building.

Nightly rents upwards of $300/night, but looking at the condo website, many of the winter weeks have 2 B/R units available for $100-$200 night during ski season.

2/2, about 1100 square feet cost between $570-$650K. Furnished, including sheets, kitchen stuff, ready to move in.

PPty tax about $1800/year.

HOA of $575 night.

Potential* gross rents of $28K/year, 56% to owner, 44% to management.

Daily maid service, shuttle buses to ski slope, it's across I70 from the slope. Indoor pool, indoor parking, two hot tubs, one in, one out, exercise room, high speed wireless.

Most of the lower priced ones needed kitchen remodels (place was built in '83) and being Colorado you're probably not doing much, if any work yourself.

Here's what I told my buddy.

20% downstroke-$114K

$456K mortgage I figured about $3000/month, plus opportunity cost of the downstroke of another $700/month.

$150/month for taxes

$575/month HOA

$100/month utilities(according to the sell sheet)

At full rental you're only going to get $14,500 rent, or $1200/month.

Your expenses are $4525/month, your income is $1200, so you're losing about $3300 month, or $39,600/year.

Based on that lose and the top rental of $300/night I said you would be better off just renting one whenever you wanted it because it's probably not even possible to ski 132 days year ($39600/$300).

He asked about gonig into it with a couple of ski buddies. I told him it just changes the proportion, not the totals.

Granted there are people (with lots of money) who own these and DON'T have them in rental service. IMO this is smarter because the income is so small that's it's negligible if you've got that kind of money. They feel it's worth it to know they've got a nice place to go, summer or winter. I know some that use their Colorado ski condos upwards of 6 months per year. For them it's worth it.

For most of us it's a DEAD LOSS.

all cash