No idea if anyone will even see this :) but we are looking at purchasing a 2 bed/2 ba condo in Mammoth within a 10-minute walk to Canyon, Eagle, or village gondola.
I'm struggling to calculate a decent cash on cash return and wondering if anyone has a baseline for what is a "normal" cash on cash return in the first couple years of an investment property in Mammoth?
I realize there are a ton of variables that go into it (quality of condo, purchase price, property management), but I'm just struggling to find any deals that make sense and I've been looking for the past 1-2 years.
@Scott Tousley so seems a bit like the cart before the horse. Start with what you want of a cash on cash return and then see if a particular property will meet it. Do this for 10 or 20 that are on the market now and see what the average is. That's what's "normal" for that market currently. If that works for you, great. If not, then perhaps you adjust your desired cash on cash return rate or find another investment.
We are just coming up on our first year at the end of this month in Mammoth, we are actually right down the street from where your talking, within walking distance to the Village. We purchased a 3B + Loft that sleeps 10. Based on what we've seen you can expect roughly 25K per bedroom for an upgraded unit (loft would count as a bedroom, assuming it can sleep people).Even with COVID and losing out for 3 months we are on track for those figures. CoC is obviously going to depend on how much you get the place for and your down payment but from what I've seen your not going to find much I the way of deals out there as things are flying off the shelf and inventory is crazy low is my understanding. Happy to chat more or answer any questions.
Without the details getting to a cash on cash return wont be possible. Share the details and I'm sure lots of folks will pick it apart with feed back. Some STR investors use a 2% of purchase price rule of thumb to guess-timate if an STR will be profitable. EXAMPLE: $500,000 purchase price x 0.02 = $10,000 average monthly revenue. If you can get close to this rule of thumb it is worth doing the nitty-gritty of running your numbers and developing a proforma. Understand its only a rule of thumb. In some cases 2% is not enough and for others a smashing success. Understanding your expenses and potential income and the myriad of contingencies including capital expenses over time and projected exit must all be factored other wise you will be blowing in the wind.
I love Monmouth, one of my favorite places in the world! we are near Breckenridge in Colorado so our guests are looking for the same thing.
Understanding your local ordinances is your first order of business. Check with the town and HOA to see if an STR is even feasible. Personally, I stay away from condos and HOAs to expensive and to risky.
@Scott Tousley so seems a bit like the cart before the horse. Start with what you want of a cash on cash return and then see if a particular property will meet it. Do this for 10 or 20 that are on the market now and see what the average is. That's what's "normal" for that market currently. If that works for you, great. If not, then perhaps you adjust your desired cash on cash return rate or find another investment.
@Scott Tousley you're cash on cash return is so dependent on the loan you're getting and how much you're putting down.
Income for STRs in Mammoth is mostly how your unit is managed; pricing, reviews, active, quick responses, etc; are what keeps units occupied and therefore profitable. You can have a crappy little studio not close to any lifts and still make great returns if it is well maintained, cleaned, and managed.
The one thing I'd highly recommend is finding an HOA that allows guests to have pets. Our pet friendly units normally gross at least 25% more than our non-pet friendly ones.
@Shelby Pracht and @David VanWert or anyone else chiming in on this thread: How difficult is it to get a good reliable cleaner in Mammoth? I know that would be key. Part of me thinks it could be difficult, but part of me also figures there must be a thriving economy in town to support all the rentals.
@Account Closed It wasn't terribly difficult, we interviewed 3-4 cleaners when we first closed and found one that worked well with our process and was in-line with pricing. Overall they have been a good team and communication had been solid which is one of the most important things in my book. I would ask your agent they likely have numerous resources for cleaners.
@David VanWert, thanks for the feedback. Do you self manage then? From my initial learning, everything I read seems to say that if you can get a cleaner and some handy people on call, you should self manage and that is where the profit is made.
Another thing about Mammoth that I've thought about is the HOA. It seems like $300-700 is possible or even typical which has given me pause. Any thoughts on HOAs @David VanWert or @Shelby Pracht? Besides the cost, are you even nervous that an HOA will change STR regulations?
How about the town of Mammoth as a whole? Is short term rental enough a part of the economy that it is unlikely regulations will tighten too much?
@Account Closed yes we self manage, we have three STR's across the country and once you get your teams in place it's not terribly difficult. Regarding HOAs yes, they are pretty pricey (ours is roughly 600 a month) but they tend to cover virtually everything (trash, snow removal, upkeeep, sometime cable/internet etc...)
In terms of regulation, Mammoth is a town that lives on STRs, I believe somewhere around 70% of their income comes from the TOT tax that is collected. I have been going their since the 80’s and staying in condos well before Airbnb was a thing I don’t foresee it going anywhere.
Thanks @David VanWert, you've confirmed two key items as I continue exploring the STR option: They can be self-managed with systems and in Mammoth, specifically, the economy thrives on a symbiotic relationship.
@Chad Lanting yes, David is right. Mammoth's economy is based on tourism and short term rentals. Most condo complexes in town are about 80% short term rentals or second homes, which means HOA boards are mostly out of town owners that would never vote against short term rentals in their complex. Rioting in the streets and such.
As far as pricing, there are definitely HOAs whose dues are higher than they need to be for the amenities that are provided, but often you get what you are paying for. I also own single and multifamily in Mammoth and there are times I've paid more for JUST snow removal at those properties than the HOA dues at our condos.
@Shelby Pracht, thanks for the input. It makes sense what you're saying about the economy being so tied to STRs. I've been going up to Mammoth pretty regularly for years. I belong to a ski club with access to a chalet, but now as I pursue REI more seriously, the prospect of owning up there is pretty appealing.
@Account Closedit's great and was kind of a "dream come true" for me as my parents owned a condo up there when I was a kid as well. We explored buying a second place up there but pricing is currently crazy up there right now prices are quite a bit higher than they were even just a year ago and places are flying off the shelves with multiple offers, going over asking etc... Doing the math I haven't found a place that would work and still cash flow the way we want it to with the current market conditions and very light inventory.
@David VanWert, that is good to know. I don't yet have the experience of running one to have actual #'s, so I appreciate your input that much more. I really want to get into the STR arena successfully to be able to replicate it in a few areas.
It always a dream of mine to have a cabin in the mountain. I recently revisit this "bucket list", but the $ has to work (because well we are not independently wealthy and just let it "sit" lol). Any suggestions would recommend it would be so greatly appreciated. I wanted a 2bdrm because we have two sons 16/14 sons and I am hoping this will be somewhere we all could come together when kids get older and family of their own. I really like Mountainback condo? I reach out to a local realtor and he suggested Chamonix, but I am not so thrilled. I am currently working with realtor but he said the climate is really is for people who has $ and renting out is a bonus not a necessary. :(. I wanted somewhere that maybe at the minimum yield a little of positive cash flow for my efforts (I am planning to rent it myself), but most importantly will appreciate.
Any thoughts, insight by all would be so greatly appreciate. : )
It always a dream of mine to have a cabin in the mountain. I recently revisit this "bucket list", but the $ has to work (because well we are not independently wealthy and just let it "sit" lol). Any suggestions would recommend it would be so greatly appreciated. I wanted a 2bdrm because we have two sons 16/14 sons and I am hoping this will be somewhere we all could come together when kids get older and family of their own. I really like Mountainback condo? I reach out to a local realtor and he suggested Chamonix, but I am not so thrilled. I am currently working with realtor but he said the climate is really is for people who has $ and renting out is a bonus not a necessary. :(. I wanted somewhere that maybe at the minimum yield a little of positive cash flow for my efforts (I am planning to rent it myself), but most importantly will appreciate.
Any thoughts, insight by all would be so greatly appreciate. : )
I wouldn't count on much cash flow (if any) in Mammoth right now. Prices are quite high right now for investors. Case in point, you mentioned Chamonix, there is a 1b + loft for sale for $700k right now, that should gross somewhere in the neighborhood of 60-65k based on those numbers you would have a negative cash flow once you factor all expenses of PITI, TOT, hoa, and all other expenses. Have a good friend that owns in Mountainback and their pricing tends to be a fair amount higher than Chamonix
Thank you @David VanWert. Mammoth is not a possibility right now as you mentioned it is impossible for investor. The place can not be cashflow negative so this dream will need to be table for now. I am actively looking for investment and trying to see during this real estate market what is possible!? : ) I am getting my interior designer degree so anxiously looking for opportunities an fixer upper STR or LTR just the $ must make sense. We have STR in Maui but again that was purchased 5 years ago and going in now would be same as Mammoth - does not make sense sadly
It will be really interesting to see what happens to condo prices in the next couple of years as interest rates rise and as a newer owners in the area get tired of trying to self-manage vacation rentals from afar for little to no cash flow. I wouldn't buy in Mammoth right now, but keep your eye out over the next couple years. I don't think the current market is sustainable long-term.
It will be really interesting to see what happens to condo prices in the next couple of years as interest rates rise and as a newer owners in the area get tired of trying to self-manage vacation rentals from afar for little to no cash flow. I wouldn't buy in Mammoth right now, but keep your eye out over the next couple years. I don't think the current market is sustainable long-term.
Agreed, just saw a property pop up yesterday that is identical to our unit, just he opposite end of the building, needs a big refresh and was listed @ $969,000 that is $300K more than our place that needed no work. Will be very interesting to see how things pan out in the next few years and people getting in over their heads when they want to self manage are make little to no profit.
No idea if anyone will even see this :) but we are looking at purchasing a 2 bed/2 ba condo in Mammoth within a 10-minute walk to Canyon, Eagle, or village gondola.
I'm struggling to calculate a decent cash on cash return and wondering if anyone has a baseline for what is a "normal" cash on cash return in the first couple years of an investment property in Mammoth?
I realize there are a ton of variables that go into it (quality of condo, purchase price, property management), but I'm just struggling to find any deals that make sense and I've been looking for the past 1-2 years.
Thanks!
Scott
Hi Scott & all - 3 years later and I am in the same boat as you- evaluating and analyzing property after property in Mammoth. I’m curious if you purchased or if any of the others on this thread have been happy with the returns in mammoth?