Any of my clients know that I am a non-fan of mountain property as an investment. I always encourage season-rentals over the constant financial drag of owning a second home. Especially in a location that is increasingly difficult and expensive to get home owners insurance.
Yes, it’s totally disingenuous for me to make these pronouncements. I own a place in Winter Park. But, I can tell you from experience, it is the WORST financial investment I’ve ever made. Even with quality long-term renters, and a very small mortgage, I rarely break even.
Now, if you are going to be honest and consider your mountain property a lifestyle choice, that’s great. Just don’t fool yourself into thinking you will make money on short-term rentals and still use it for family getaways.
This bias (I admit that’s what it is) was confirmed in this article from Rethinking 65 that highlighted an interesting study. The survey compared profitability of mountain town rentals across the country.
Taking into account purchase price and average nightly rentals, the top 10 mountain towns were…nowhere near Colorado!
In fact, 4 of the 10 least profitable rental towns were in Colorful Colorado: Vail, Telluride, Durango and (shocker) Aspen. That’s because the median home prices are so high in those locations.
I can’t imagine Breck, Steamboat, or even my beloved, basic Winter Park are far behind in the worst-profitable rankings.
Hey, is it lovely to drive up to your own place with your own toothbrush, hot sauce, and ski gear just where you left it? Yes, it is! Just don’t pretend to yourself (or your cynical financial advisor) that your condo in Frisco is an investment.
Sources: S&P Global, Steel Peak Wealth, Ardent Financial Planning
