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Advice on being part of a resort rental pool

post #1 of 12
Thread Starter 
We're looking at picking up a small condo at a ski hill as a recreational property and may want to put it in the resort rental pool for most of the first two years (until I retire and can spend most of the winter on the hill instead of the measly 50 days I manage now). What are the advantages/disadvantages and pitfalls we should look out for?

Our options include either studio or one bedroom suites, and we can go with either a building that is one of the featured hotels at the resort (part of the central reservation pool) or a building where we would probably have to list with one of the non-resort affiliated rental outfits.

Any suggestions or advice?
post #2 of 12
How far from the unit do you live and how much will you be using it?

Obviously look at the percentages. But talk to other owners at both and try to get a feel if they will nickel and dime you to death. I can't tell you how many times I've had to pay $50 for some stooge to buy a TV remote.
post #3 of 12
I’m sure things vary with mountain but here are a couple of the things I found.

Going through the resort you will probably get better occupancy, but going through a “private” agency will probably give you a higher percentage per night.

Be sure the agent does a real walk through between renters. Things get broken or damaged. You need to be able to identify who did it, or you’ll end up paying for it when you discover the problem and the agent says they can’t identify cause. You may be able to have them pay it but it could be an argument.

As shreadhead stated, you can get charged for a lot of stuff if the agency nickel and dimes you. One year I must have had 5 different coffee makers. Actually tv remotes weren’t our problem. Don’t leave out the “factory” remote, get cheap aftermarket ones.

All in all, the rental paid a lot of bills, but it came with a cost. You need to live by check in and check out rules. You can’t leave things in the refrigerator. In many ways you are like any other renter. I had to plan my winter visits in July; you can’t run up on an unscheduled weekend because they just had a 24 inch dump.

Biggest thing is that you have to take the mindset that it’s a business not your home. Renters just don’t take care of your things the way you would.

Good luck with your purchase.
post #4 of 12
Quote:
Originally Posted by gnjantzie View Post
We're looking at picking up a small condo at a ski hill as a recreational property and may want to put it in the resort rental pool for most of the first two years (until I retire and can spend most of the winter on the hill instead of the measly 50 days I manage now). What are the advantages/disadvantages and pitfalls we should look out for?

Our options include either studio or one bedroom suites, and we can go with either a building that is one of the featured hotels at the resort (part of the central reservation pool) or a building where we would probably have to list with one of the non-resort affiliated rental outfits.

Any suggestions or advice?
First off, decide why you are buying. Are buying for an investment or to find a place that you like and will use wide-scale in the next 2 years. If this is for an investment, consider the location and appeal to other buyers; location and size, 2brdm 2 bath is most popular. If you are buying to use in two years, then buy what you like best. As far as renting goes, speak with the management company and understand ALL of the rules. see if you can take the unit out of pool during certain time frames (1-3 months or only summers) or will they move renters from your unit (provided they aren't already in your unit) to another open unit if you want to go there last minute. Also, as stated, you have to understand others will steal, damage and in general not be so nice to your property. don't over decorate or buy expensive appliances or cookware or artwork. Look over your statements carefully, I was just charged for two different things they should be paying. You can list your own on VRBO http://www.vrbo.com/ and manage it yourself if you have the time and patience or if you can hook up with a local mangement company who can handle everything for you but the renting aspect.
post #5 of 12
Not sure how much help it will be, but here's one perspective…

A lot depends on the traffic the mountain generates. If it isn't a destination "resort", you'll probably see heavy weekend traffic and limited midweek rentals. Studios and 1 bedrooms tend to be in less demand that 2 bedrooms - especially at mountains that cater to families. High-traffic weekend mountains should cover your cost of ownership - taxes, association fees, maintenance, insurance, etc. A destination resort will usually provide a net profit - especially if it is a 4 season location. (I'm speaking of operating costs, not high six-figure mortgage expense which is a whole other bag of fish heads.) You will most likely be required to carry a higher level of liability insurance if you rent.

Many non-destination resorts don't see a high enough demand outside of ski season to fill even a small percentage of the units available on the mountain. Whether this happens in ski season or out of ski season, if your unit is part of a central reservations pool (especially when managed by the resort) your unit will most likely be put on a rotation schedule. That way everyone's unit theoretically gets an equal chance for number of rental days. This is usually consistent, but units known to be on the lower end of "acceptable" can be bypassed in favor of a more guest-friendly unit. There are always units where the walls are a little grungy, the mattresses a little lumpy, the furniture just at the point of needing replacement. While these units may technically pass acceptance into the rental pool, they can be know as "fill last".

Now, the other side.
If there is an owner's association, get a copy of the bylaws and rules/regulations BEFORE you buy. You WILL have to live by these documents. If the association has selected an exclusive rental agency for the complex, you will have to rent through that agency. Often if your unit is tied directly to the mountain, the mountain has been named exclusive rental manger. The board of directors usually makes this call. If enough owners object to the rental or management contracts selected by the BOD, they can bring pressure upon the BOD to change course, or remove the BOD from their positions and elect a new BOD which is more representative of the majority's desires. (Hope you're comfortable with politics and group living.) Rentals through the mountain often bring with it opportunities for free or reduced price lift tickets and other "perks" for participating.

If your unit is on the lower end of the $$ scale, be prepared for harder wear. It isn't uncommon to find 5-10 people crammed in a space meant for 2-4. There may likely be a rockin' party in your unit if this happens. The opposite can be true also - people willing to pay top dollar aren't always the most conscientious of other's property. From my experience, I'd bet on less damage at the high end. AVOID renting during "college weeks" …it is almost a given that you will see damage to your unit. More than likely the building will also see some damage - holes punched in walls, light fixtures broken or torn off the wall, etc. If the culprits are caught, they will pay. Usually they don't get caught and you or the association pays. Which brings me back to the "marginal units". Some people get tired of constantly replacing furniture and appliances, only to have the next renters trash it. A sofa might look OK after renters leave, but a couple of rowdy teenagers wrestling and jumping on it might have trashed the support system, so when you sit on it you sink in up to your neck. By the time that stuff is caught, you pay because who knows who did it. There may be a small (2-4%) "hold back" out of the total rental agency revenues for claims against general damage.

Sometimes people trash things because they think the mountain is ripping them off and is getting enough of their money, so they "get a little revenge". Again, if they are caught they pay. If not, you pay. This is especially true at something like an ASC Grand Hotel, where many guests don't realize individuals own the units (and the building), not ASC.

A mountain affiliated rental agent will usually take 30-40% of the rental rate. If accommodations and lift tickets are part of a package, the $$ allocated to the lift tickets can leave little left for you after the 40% of rental is subtracted. (Package allocations are usually spelled out in the rental contract - make sure you see a copy before buying if rental income is important to you.) That's why if the mountain is primarily a weekend destination resort, the money trickles in rather than pours in. If the warm-season traffic is slow, you're still paying maintenance, utilities, etc. all year. Speaking of utilities, your renters may crank up the heat and leave windows and doors open for "ventilation control", or just easier entry and exit onto the deck. It isn't uncommon. It is amazing how astronomical utility bills can get when you have no control over the switches.

If you're going to live in the unit after two year's rental - plan on replacing EVERYTHING before moving in.

To do it, or not to do it, is a personal choice, but best to leave the "romance" out of it. There is nothing like deciding on a whim to hunker down in your own place and wait for that predicted monster storm. Then when it comes, dropping your skis outside the door and skiing off to the lift for first tracks. There's a lot of baggage that goes with it, but on those days you'll be floating on a cloud.

Best wishes.
post #6 of 12
Thread Starter 

Thanks for the input thus far!

Thanks everyone for your perspective thus far. We wanted all the info we could get from those of you who have experience with property on the mountain. We have a choice to go early (over the next few weeks) because there is property available in our price range at a resort that I know I would be happy to spend most of my skiing time at. But I am also perfectly willing to spend this winter skiing at a few other possibilities just to see whether they might fit better.

The resort I'm looking at is a fairly well-known Canadian family destination resort with extensive marketing overseas in Britain and Australia. At this point it's winter only, but the latest news is that there is a name designer golf-course in the works. It looks to me like the golf course will add some significant value to the investment (if and) when it goes through, but the key factor is whether I would be happy skiing 100 days plus here (and that the night life would be entertaining enough for 100 nights).
post #7 of 12
You need to consider other factors that will impact you since you plan to spend so much time there. access to doctors and other healthcare, shopping (food and other), recreation, summer too! for instance, does the mountain offer bike access, is there kayaking or other sports or non-skiing activities that you would enjoy. How's the traffic? do you have a place to park a car? do you have enough storage for all the stuff you may start to accumulate for use? (owners closets)
post #8 of 12

Timeshares

My wife and I were loosely considering getting a timeshare. Any advice on doing this? Is it worth it? Should I look into buying someone out for a couple weeks, or start from scratch.:
post #9 of 12
Thread Starter 
Quote:
Originally Posted by Johnnys Zoo View Post
My wife and I were loosely considering getting a timeshare. Any advice on doing this? Is it worth it? Should I look into buying someone out for a couple weeks, or start from scratch.:
We've had a timeshare for the past ten years and have generally enjoyed it. We use it exclusively for trades so we've actually based our vacations in part on what has been available. You should take a look at the "Timeshare Users' Group" discussion group online to get more detailed information, and if you are moving forward go with the resale market (it will save you a substantial amount on costs and enable you to avoid the worst of the "informative 90 minute presentations").
post #10 of 12
The big rental times are the Xmas week and weekends, right? So if you're skiing 50 days, how many weekends are left to rent? If many of your days are midweek, it would seem reasonable, but if you'll use the place many weekends, it seems like you shouldn't expect much income.
post #11 of 12
Thread Starter 
Quote:
Originally Posted by alpinedad View Post
The big rental times are the Xmas week and weekends, right? So if you're skiing 50 days, how many weekends are left to rent? If many of your days are midweek, it would seem reasonable, but if you'll use the place many weekends, it seems like you shouldn't expect much income.
The most likely resort we're looking at is about 8 hours drive away from our current residence and would be about five hours away from a likely retirement residence. Remember we're looking at two years of light personal usage before being able to head out on a three weeks per month basis. I have no desire to be there during the peak Christmas/New Years period (snow is not that good at that point in the year and it's too crowded, plus we have family in Florida to visit) so that would be an open period for rental. I'm not looking to make money on the rental, just cover the taxes ($700 per year) and the strata/condo fees (under $200 per month). The biggest factor is actually the size and quality of the resort when it comes to skiing. That eliminates a number of closer resorts (particularly when I factor in the 200% to 300% premium we'd pay for similar sized and outfitted accommodation). In the long run, if I get 5-10 years of good skiing and break even on the resale (with inflation) I'd be happy.

We were just in at the bank today and we would have no trouble financing the purchase for a year or two on our line of credit. I primarily want to look at all the factors before making any commitment (and this gives me an excuse to take trips to three or four other resorts this year to do some comparison shopping ).
post #12 of 12
Quote:
Originally Posted by gnjantzie View Post
... Remember we're looking at two years of light personal usage before being able to head out on a three weeks per month basis. I have no desire to be there during the peak Christmas/New Years period (snow is not that good at that point in the year and it's too crowded, plus we have family in Florida to visit) so that would be an open period for rental. I'm not looking to make money on the rental, just cover the taxes ($700 per year) and the strata/condo fees (under $200 per month). ....
You're probably in the ball park then. Your rental agent will likely ask for a minimu of 30 dys or so between X-mas and end of March, including 2-3 weekends.

Depending on the resort you might clear $6k on the high end for a 1bdrm and $2k on the low end for a studio over the course of the season. For the high end, you would have to give more than 30 days - probably double with more weekends. Again it all depends on the mountain's traffic and customer demographic.

p.s. I was a little harsh on the "replace everything". If your family is willing to live with some bumps and bruises on appliances and a tear or two on furniture fabric, you'll do fine with what's there if it is in good condition now. For me, the longer I spend somewhere, the less tolerance I have for the bruises. My wife and I are kind of "nits" so we avoid the rental programs.
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