Summer has gone by fast! In Summit County, our ski country playground, there is already a hit of yellow in the aspen trees. If you are thinking of purchasing a second home in ski country, now is the perfect time to get started, before the snow starts falling. Over the years, I have found that Summit County is the perfect place for my Boulder County clients to buy a second home. The drive takes much less time when you own your own place because you have the option to travel during off-hours rather than “rush hour.” Once you get there, you have a variety of choices for skiing within minutes of any Summit County location. It seems like most people buy in Summit County for the skiing, but soon discover there is am even a more diverse range of activities in the summer.
According to Paula Parker, a Realtor® at RE/MAX Properties of the Summit, “Interest rates are low, and inventory is slightly higher than a year ago, making it a perfect time to secure that ski country getaway.”
Having a second home in the mountains can be a wonderful experience.
Here are a few things to consider as you make that decision.
Goals for the home
Families need to ask themselves many questions as they dive into considering the purchase of a vacation home. Goals can be immediate, such as the number of days of personal use. Or whether or not the property is going to become a legacy family vacation property to be handed down to the next generation.
Is rental income needed to financially support it financially?
Even if someone pays cash for a vacation home there will still be several expenses. Those expenses include taxes, insurance, maintenance and landscaping, property management, and Homeowners Association fees. With a mortgage on top of that, most people will need to rent out the property for some income to cover these expenses, especially in the early years of ownership.
If rent is needed, do I manage it or hire a professional manager?
Some people choose to rent out their vacation properties by themselves by relying on a variety of websites. If you want to do this, you will need to investigate local municipalities and Homeowners Association rules on short-term rentals because there can be many types of restrictions, occupancy limits, fines for violations – and even prohibition. If you want to rent and manage the property yourself, you will need to assess your ability to market your property, clean it after every guest stay, repair and maintain it, especially if your property is located outside of driving distance.
In most resort areas, professional vacation property managers are available. They can market your property and put it into a rental pool. This enables you to keep your property rented on a short-term basis from a distance and with no personal involvement. These managers can guide you on pricing and tell you the average number of nights per year you might expect to rent out your property. You can pick the days that you would like to schedule for personal use. For example, you might have to decide if you want to use the home yourself over the holidays or rent if out during the holidays for premium rates and maximum returns.
With longer term rentals you will have higher expenses for management, linens and cleaning, whereas daily rentals might bring in higher income depending on the season and number of nights booked. The advantages of a longer-term rental are consistent income and less turnover and paperwork.
In addition to marketing, vacation property managers can also handle cleaning and garbage; security; damage repair; maintenance including landscaping, pool cleaning, snow removal; guest emergencies; and even restocking linens, soap and paper towels. However, when choosing a vacation property manager, you should keep an eye on fees and contract terms. Fees can be a significant percentage of rental income.
As you can see, there are many details to evaluate when buying a ski country property. In my next article on this topic, I will cover taxes, financing, succession plan, and more. As you mull over the idea of purchasing a vacation home, I recommend that you pull together a team that includes a mortgage loan officer, tax accountant, financial planner, property manager, insurance agent, Realtor – and possibly an estate planning lawyer – to consult with.
By Duane Duggan. Duane has been a Realtor for RE/MAX of Boulder in Colorado since 1982 and has facilitated over 2,500 transactions over his career, the vast majority from repeat and referred clients. He has been awarded two of the highest honors bestowed by RE/MAX International: The Lifetime Achievement Award and the Circle of Legends Award. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life. For questions, e-mail DuaneDuggan@boulderco.com,
call 303.441.5611 or visit www.BoulderPropertyNetwork.com.