March 7th, 2007

Your vacation home can pay for itself

In a post last week I mentioned that it is possible to have your vacation home/rental property make money and pay for itself. When one of my clients wants to rent his or her new condo, here is what I tell them:

You have two options. You can turn it over to a property management company to book it and take care of it. The disadvantages are that you have little or no control over expenses, rentals, or repairs. You pay 35 to 55% of the gross income to the management company.

However, there are advantages as you can turn it over to them and they mail you checks after it has been rented. They book the tenants and arrange the cleaning. You can be “hands-off” if you prefer and let them handle everything. In some instances (Copper Mountain) you may get benefits such as discounted lift tickets for being in their program.

Your other option is to manage it yourself using the internet and other resources. Disadvantages to this method are that you must spend time researching the websites to find exposure for it. You must answer emails and make the reservations. You have to stock the unit with supplies and arrange cleaning or clean it yourself. You may need to arrange for hot tub maintenance, snowplowing, and you could get middle of the night calls for clogged toilets or lost keys.

I wouldn’t be advocating this method without definite advantages. The biggest one is that you have control AND you can make more money as you don’t have to share the income with anyone. And, someone else can do much of the other items for a reasonable fee.

The answer is to manage it yourself with the help of a flat fee management company. There are now companies in Summit County that offer a fixed fee type of management, rather than taking a large percentage of your income. The average cost seems to be about $125 a month and some have discounts if you prepay for the year. Here is one with which I am familiar: Colorado Ski and Recreation - 877-733-2656 (toll free).

The following companies have similar programs, sometimes together with traditional rental programs.

Quiet Pines - 970-513-4500
Sky Run condos
Rocky Mountain Resort Management

What each company does for you will vary, but most often they will take your booking and send out confirmations, arrange for key pickup, run credit cards (for a fee), set up cleaning and handle emergency phone calls. You will need to market the property,keep up the online calendar and handle the bookwork, including paying lodging and/or sales taxes.

I have discovered, after losing money every year for a few years, that there is a better way to have my short term vacation rental property work for me. My condo is in the same area I live in, so I don’t even have the pleasure of using it myself, and I must make it pay for itself or sell it. In the next couple of weeks I will expand on how, with the help of a flat fee management company, I am able to keep my property productive.

Posted by Summit County Real Estate Agent Joanne Hanson at 11:22 pm in Summit County Colorado Vacation homes. Subscribe to comments RSS feed.