Beach Vacation Rental Vs. Ski Chalet and Other Vacation Rentals

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Beach Vacation Rental Vs. Ski Chalet and Other Vacation Rentals

Krista Goodrich
Property Manager · Daytona Beach, FL · Member since 2015 · 78 posts · 86 votes

Hey BP Community!

I have been investing in STR/Vacation Rentals on or near the beach but am interested in growing my portfolio to include other places I like to visit such as ski resorts, big cities, international spots. My issue is, we were in Park City, Utah last week and Breckinridge recently and no matter how I crunch the numbers, cash payment, leveraging, etc., I cannot seem to make the numbers work where there is a positive return. I don't mind breaking even if I have an investment being paid down by others and a place to visit (even if it's in the off season for example: Utah or Colorado in Summer), but I can't justify investing in a place just to say I have a ski condo...it has to make money.

Can anywhere share stories of good and bad fun-location investments they have made to shed light on how they are making money in some of these higher cost towns?  

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Megan Pantella
Real Estate Agent · Sun City, AZ · Member since 2020 · 8 posts · 6 votes
5y

@Krista Goodrich Hi there! You may want to consider northern New Mexico. This area (and state) is much more affordable. I have 3 Airbnb condos here near the Angel Fire ski resort and make a good return on the rentals. The benefit here is the ski hill is used as a mountain bike hill in the summer. Attendance was up this past summer, even with COVID concerns. And we have a steady stream of mountain bikers/hikers during the summer months.

There is also a country club open to the public for golf, tennis and other activities. So your only “down months” are April/May and November until mid-December. Even in 2020, I had a full November month-long booking and same in May - folks from larger cities escaping to the great outdoors.

The majority of guests here are driving in from Oklahoma and Texas, but I’ve see an uptick lately with folks from Colorado looking for a less expensive alternative, both for rental costs and property prices.

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  • Tom Wagner
    Real Estate Agent · Minneapolis · Member since 2019 · 338 posts · 219 votes
    5y

    HI Krista - I am considering the same thing and it is definitely hard to make the numbers work. You could check out second-tier ski towns (Frisco, Silverthorne, Alma, Edwards, etc) or you could check out the edge of SLC near Alta / Snowbird. The numbers in Vermont and New Hampshire also make sense, and there will always be demand there given the size of Boston / NYC!

    0Reply
  • William Beck
    Realtor · Branson, MO · Member since 2018 · 274 posts · 283 votes
    5y

    If you want ski, you could always be close to ski proximity in like Fairplay/Alma (For Breck) or Granby/Grand Lake (For Winter Park). For SLC Park City is a bit tough just because of prices there. 

    0Reply
  • Joey Johnson
    Developer · Frisco, TX · Member since 2021 · 5 posts · 1 vote
    5y

    I may be partial due to my interests in the area, but Crested Butte, CO is a great option. It's way cheaper than many of the bigger ski towns in Summit County. We are just finishing our first 4 plex out of an 11 Townhome project. At the moment we are unsure if we plan to hold a couple for STR purposes. We also have a SFH project that is near ski in/ ski out, but that HOA does not allow STR's... The two inside units are yet to be listed, but already have a ton of action from the end units that are under contract. End unit listing below.

    https://www.realtor.com/reales...

    1Reply
  • Valerie Rogers
    Property Manager · Aurora, CO · Member since 2014 · 221 posts · 210 votes
    5y

    In 2012 we purchased a 2 BR/2 BA condo in Dillon (Summit County). Dillon is central to 5 ski resorts within 15-20 minutes (Keystone, Breckenridge Resort, Copper Mountain, Arapahoe Ski Basin & Loveland). It has been a good investment for us, but of course since then the market values have been increasing and inventory is low. If we had to purchase the same condo today it might not be as good aninvestment for those reasons. However, this location is definitely less expensive than Breckenridge so if you can find the right property it could still work.

    1Reply
  • Amy Nakos
    Residential Real Estate Broker · Frisco, CO · Member since 2016 · 16 posts · 16 votes
    5y

    @Krista Goodrich I work in the Summit County/Breckenridge market and it is very difficult to get immediate cash flow when you have a loan and are paying a property management company. I have a matrix on my website that shows the different returns depending upon whether you pay cash or get a loan and depending upon whether you use a property management company or don’t. also prices have increased dramatically with low interest rates and incredibly high demand from Denver. So many people don’t care if they get a return or not because they want to use the property for fun and just offset some costs with short term rentals.

    1Reply
  • Mike Wadsley
    Real Estate Agent · Littleton, CO · Member since 2014 · 74 posts · 45 votes
    5y

    Breck is way overpriced. I have a condo there, but mostly for my own use and to be able to take a loss against my taxes. For a secondary market, try Steamboat, as well. It's not as accessible from the Denver area, but still great skiing and decent affordability. 

    0Reply
  • Matt M.
    Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
    5y

    Management will kill your CF in the mountain towns. I'd avoid going further South than Breck. It takes to long to get to Alma/ Fairplay. I'd look in and around Dillon, Frisco, etc. You might checkout Winter Park as well. 

    0Reply
  • Michael Glunk
    Real Estate Agent · Evergreen, CO · Member since 2015 · 126 posts · 73 votes
    5y

    @Krista Goodrich Great question! And one that I have both passion and experience in and have commented on in a few other posts. Lot's of great thoughts thus far. I'll build on what's been said with a few of my personal thoughts.

    There are a lot of factors that come into play. Personally, I believe that you can make something work in any market if you know not only WHERE, but also HOW to look at it. Takes a bit of creative thinking and sometimes you have to flip things are their head. Look at it differently than others with a bit of a disruption mindset.

    In my opinion, much like BRRRRing or Flipping, where you can't pay retail in order to make it work...the same is true with mountain/ski area properties. Every once in a while you find a diamond pop up, but these are rare. And when you can find something it either is a wash from a cashflow perspective or barely cashflows. Nothing wrong with this if you are an appreciation investor. But my personal strategy is for some form of cashflow. So when you analyze markets and properties, especially in the mountains of Colorado where I live and invest you will find, as you have described, that nothing seems to work. A bit different from the midwest markets that I also invest in where cash flow is a bit easier to come by. 

     What's next? Well you can definitely monitor a market or two waiting for something to inevitably pop up that probably barely brakes even. Or you can flip things on their head and look for ways to create equity/cashflow. Definitely takes more effort. So what does this leave you with? Like my BRRRRing/Flipping comment, it often leaves you with either looking at/for properties that no one else wants because they are trashed (and therefore you can often get them at a discount) or building. Both options leave you with needing to find and hire local contractors/trades unless you are planning on doing the work yourself. Personally, this is where I have found success. It's harder and more stressful, but most things that are worth it are. 

    A potential third option is to send out mailers, typically to out of state owners. I have found property this way as well.

    Other factors to think about are costs. How can you keep expenses down? This can be a big issue in mountain markets. Most of these markets have a deficiency in skilled labor. Or even labor in general. As a result, everything costs more. So one thing to think about is how you can strategize around this. e.g. If you want to build, maybe don't build something on site, build it off site (pre-fabrication) and bring it on site. It's a lot cheaper to build in Nebraska or Minnesota than a ski town. Contractors/Trades...is there a market close enough that you could find someone skilled and willing to make the drive to wherever you are rehabbing or building at a more affordable price?

    I've personally leveraged these approaches and techniques and have found success. I'm sure there are other thoughts and approaches from others here on BP. I recently finished building two ski houses near Winter Park. I long term rented one (because the size is common and STR income is on par to slightly less than long term renting) and then I short term rent the larger one. I was able to pull out all of my money I put into it to finish the build. I actually pulled out more than I put into it. I have a bunch of equity still in both properties. And they both cashflow. So worked out well. But definitely was a lot of work. More so than a traditional purchase.

    Given the crowds at resorts and the growth in desire for the backcountry, I've been working on an Off-Grid Backcountry Ski House property. Still working on access so it's a slow burn, but making progress.

    Happy to chat more if you'd like, just reach out.

    Best,

    Michael

    0Reply
  • Krista Goodrich
    OP
    Property Manager · Daytona Beach, FL · Member since 2015 · 78 posts · 86 votes
    5y

    Thank you everyone! Great insight and @Amy Nakos I'd love to check out your site! @Michael Glunk...okay, you have my brain turning, this is an interesting way to approach. I can definitely see building a STR being more economical and I could make it the way I want which would be unique for higher returns...and the idea of building off site is also intriguing. I may reach out to you with some more questions on this.

    0Reply
  • Nancy Bachety
    Rental Property Investor · North Fork, NY · Member since 2016 · 1k+ posts · 631 votes
    5y

    Your forcing it. Keep up your beach towns, invest in The Smokies, and pay cash to visit the beautiful mountains of CO. 

    1Reply
  • Candice De
    Real Estate Agent · Denver CO and Summit County, CO · Member since 2015 · 74 posts · 43 votes
    5y

    @Krista Goodrich I think you have some thought provoking ideas on this thread, so thanks for asking the question!  I also live (and work as an agent) in Frisco, CO and invest in Denver.  I think if you are in it for the short term gains, like others have said, it is really hard to make the numbers work in this market.  

    However, if you are willing to play the long term game or get creative, I think there are good investments in resort towns.  Places like Blue River outside of Breck, Fraser outside of Winter Park, and Silverthorne/Dillon offer access to resorts with a little more reasonable prices.  I liked this article about appreciation potential in vacation markets (spoiler, many of them are winter resorts): https://www.vacasa.com/top-mar...

    0Reply
  • Jake CohenPro Member
    Rental Property Investor · Denver, CO · Member since 2017 · 201 posts · 126 votes
    5y

    @Krista Goodrich it is not impossible. I own a duplex and a triplex in Steamboat Springs,CO. I bought these in 2017 & 2018. When I was crunching numbers, the condos were not penciling due to HOA dues. I found both multi family units that needed work and was able to capitalize on this market that people were overlooking. Both properties make money and we are able to use them a few times a year. Happy to answer any specific questions you may have.

    1Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    5y
    Originally posted by @Krista Goodrich:

    Hey BP Community!

    I have been investing in STR/Vacation Rentals on or near the beach but am interested in growing my portfolio to include other places I like to visit such as ski resorts, big cities, international spots. My issue is, we were in Park City, Utah last week and Breckinridge recently and no matter how I crunch the numbers, cash payment, leveraging, etc., I cannot seem to make the numbers work where there is a positive return. I don't mind breaking even if I have an investment being paid down by others and a place to visit (even if it's in the off season for example: Utah or Colorado in Summer), but I can't justify investing in a place just to say I have a ski condo...it has to make money.

    Can anywhere share stories of good and bad fun-location investments they have made to shed light on how they are making money in some of these higher cost towns?  

    My friend has one in Park City and he lives in Philly. I think he likes it because it is easy to get to with airport access and freeway like to get to it after that. IDK the numbers but I think the rental covers expenses and it probably has tripled in value. My brother has one in June Mountain and he pretty much lives off it as far as his expenses. Here is the view from pad.

    june

    Good luck! 

    0Reply
  • Megan Pantella
    Real Estate Agent · Sun City, AZ · Member since 2020 · 8 posts · 6 votes
    5y

    @Krista Goodrich Hi there! You may want to consider northern New Mexico. This area (and state) is much more affordable. I have 3 Airbnb condos here near the Angel Fire ski resort and make a good return on the rentals. The benefit here is the ski hill is used as a mountain bike hill in the summer. Attendance was up this past summer, even with COVID concerns. And we have a steady stream of mountain bikers/hikers during the summer months.

    There is also a country club open to the public for golf, tennis and other activities. So your only “down months” are April/May and November until mid-December. Even in 2020, I had a full November month-long booking and same in May - folks from larger cities escaping to the great outdoors.

    The majority of guests here are driving in from Oklahoma and Texas, but I’ve see an uptick lately with folks from Colorado looking for a less expensive alternative, both for rental costs and property prices.

    3Reply
  • Damaso Bautista
    Rental Property Investor · Hawthorne, CA · Member since 2018 · 655 posts · 900 votes
    5y

    @Krista Goodrich

    Hey Krista,

    I would be interested in information about Angelfire. 

    1Reply
  • Krista Goodrich
    OP
    Property Manager · Daytona Beach, FL · Member since 2015 · 78 posts · 86 votes
    5y

    @megan 

    @Megan Pantella interesting...what are average home prices do you happen to know?

    0Reply
  • Damaso Bautista
    Rental Property Investor · Hawthorne, CA · Member since 2018 · 655 posts · 900 votes
    5y

    @Megan Pantella

    I am interested information about Angel Fire

    0Reply
  • Megan Pantella
    Real Estate Agent · Sun City, AZ · Member since 2020 · 8 posts · 6 votes
    5y

    @Krista Goodrich It is definitely a seller’s market right now. Interest in this area has spiked during the past year and going up. Two years ago, you could pick up a condo (needing full update) for around $75/80 sq ft. Now, it’s about $130/sw foot if you are lucky. Remodeled condos are about $200-$250/sq ft. Days on market for condos are low - 7-10 days max.

    Homes are anywhere from $170/sq ft for fixer (or over 3000sq ft) So if you find a SFR right now for close to $300,000 it's a deal, but they don't last long.

    Interestingly residential lots near the ski hill vary from anywhere from $20,000 to $150,000. There are some great builders here but business is good so there is a wait. I’m not positive but last I checked new home construction was around $350/sq ft to start.

    Many of the SFR here were built in the 80s and there is generational turnover now with the "adult kids" either rehabbing, or selling due to the higher values.

    I purchased an 1163 sq ft condo in 2019, we remodeled and I put it on the market “just to see.” We’re under contract and will net $75k. I should have bought more!

    There is a wide range of smaller cabins, up to $1.5M+ luxury homes. Definitely worth keeping an eye on and see what comes on the market in April and May. I’m happy to help if you have more questions or decide to visit. We’re only 30 minutes from Taos, Red River (both have ski hills) and 2.5 hours to Santa Fe.

    1Reply
  • Megan Pantella
    Real Estate Agent · Sun City, AZ · Member since 2020 · 8 posts · 6 votes
    5y

    @Megan P. Oh and I’ll add that there is a huge shortage of long term rentals for locals and seasonal workers here. If someone were to buy a few acres near the hill ($150-200,000 estimate for 5-7 acres mixed use) and invest in smaller homes and/or tiny homes, you would have long term renters lined up.

    Also for business ideas, desperate need for a commercial laundry facility that would cater to short term rentals (pickup /delivery for laundering linens...)

    1Reply
  • Megan Pantella
    Real Estate Agent · Sun City, AZ · Member since 2020 · 8 posts · 6 votes
    5y

    @Damaso Bautista hi there - I added to the replies. :-)

    0Reply
  • Matthew LoPiccolo
    Flipper/Rehabber · Canton, GA · Member since 2021 · 32 posts · 27 votes
    5y

    @Krista Goodrich

    Ski = Limited access to slopes thanks to covid

    Beach is easy breathing and down here in the beautiful sunny Florida. Short term rentals are still killing it.

    In the right location of course. We buy, remodel and pm if you are interested in SWFL.

    0Reply
  • Krista Goodrich
    OP
    Property Manager · Daytona Beach, FL · Member since 2015 · 78 posts · 86 votes
    5y

    @matthew lopiccolo completely agree and I currently have 17 properties located in Daytona & Fort Myers, both areas killing it....that was my point.  I don’t see how people are making $ in the ski areas especially when I compare to my Florida numbers.  I keep wanting to add new locations but my Daytona and Fort Myers numbers seem to be unbeatable.  Which is a good problem:). Glad to hear you’re killing it too!

    0Reply
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