Once you’ve decided that it’s the right time to purchase a vacation rental in Breckenridge, Colorado, then it’s time to choose which investment property will perfectly suit your needs and wants. This decision-making process will likely take some time as the market will dictate your options. However, once you know what factors you need to take into consideration in order to get more of a return on your investment, you should be well-suited to make an informed decision. We’ve compiled some helpful tidbits from a variety of experts to help you get started with this exciting process.
Your investment property’s location will play a huge part in the number of guests it attracts. One general guideline for Breckenridge rental properties is that “[t]he closer a rental investment condo, townhome, or home is to a chair lift, the higher the rental income will be. The reason for this is that the ski season is the peak rental season and people put a premium on convenience. Ski-in/ski-out investment properties outperform those that are within walking distance to the chair lifts. Those within walking distance outperform those that require a shuttle ride. And those on the shuttle route outperform those that are not.” Amenta Real Estate
However, with regard to Breckenridge vacation properties, it’s also necessary to consider your summer rental potential. “…[D]uring the summer months our visitors come for a variety of reasons and experiences: hiking, biking, fly fishing, whitewater rafting or just a quiet getaway in the woods. No matter what brings them here in the summer, our guests always love to stroll Breckenridge’s historic Main Street. So convenient walking access to dining, shopping, and the Riverwalk area can increase your summer rental revenue.” Breck Life Group
If all that weren’t enough, you’ll also need to consider the future potential of the specific area in which you’d like to buy. “It’s always wise to choose an investment property in a neighborhood that is likely to appreciate. Look for historical sales data and drive around the area to observe the condition of the surrounding homes.” Mashvisor
Once you narrow the location down, consider what amenities are available to the different property types in the area. “…[H]ot tubs, pools, exercise facilities, saunas, steam rooms, tennis courts, conference facilities etc. … are more plentiful with many condo complexes than other property types.” Amenta Real Estate
However, while attractive amenities like those mentioned above will increase your potential for rental revenue, they may also mean that things like HOA fees are higher. You’ll need to factor in whether the rental revenue will make up for these additional costs.
While a home or condo that’s in need of some upgrades or repairs will likely feature a lower price tag, it will also mean more work on your end. “While you may be able to buy a fixer-upper at a rock-bottom price right now, it may require a significant amount of time and money to make the property rentable and could require significant ongoing maintenance, which is especially difficult if your primary residence is not nearby.” Community from HomeAway
In addition to any updates or repairs you’ll need to complete before renting your investment property out, don’t forget about the costs associated with furnishing your property. Obviously, larger properties will require more furniture, which can be quite expensive (especially when purchased all at once).
Rental Income Potential
Your potential rental income from your Breckenridge investment property will vary widely. It will depend on some of the things we previously mentioned, including its location, amenities, and its condition. Rental revenue will also be affected by all the other costs you’ll have to take care of, which including HOA fees, utilities, insurance, accommodation licenses, taxes, and housekeeping. You can estimate that annual maintenance will cost about 1% of the purchase price of the home. If you opt to take advantage of property management services, these may cost anywhere from 25% to 50% of your gross rental income.
Once you start working with a realtor, you’ll want to look “for those properties with past annual gross rental income between 5% and 10% of the purchase price.” Susie Cortright
This figure is typically what you can get from a good rental home or condo. But again, home prices fluctuate and as you probably already know, some ski seasons won’t bring in a huge number of visitors.
How Often Will You Use Your Vacation Property?
The investment property that you choose will also depend a lot on how you plan to use it. If you plan on making it your regular vacation getaway, your preferences should definitely factor into the property’s location and amenities, among other things. It is your property, after all.
“It’s important for you to consider the times of year that you’re most likely to want to enjoy Breckenridge. If you’re using your home all summer long, that means it will be more readily available for rental guests during the winter months and we may want to consider a residence near the slopes for ski convenience for your guests. And if you plan to be here in the winter but make your home available during the summer, then perhaps a downtown location or something at the Breckenridge Golf Course may perform better for summer guests.” Breck Life Group
However, if you’re planning use your investment property solely as a vacation rental, then you can focus exclusively on those factors that are likely to maximize your rental revenue.
If you find that you still have more questions about picking an investment property in Breckenridge, feel free to give us a call at (970) 528-9700. Understandably, the whole process can seem a bit daunting if not overwhelming. We’re more than happy to help you out. We can give you more information about our property management services and we can also point you in the right direction if you’re ready to start looking for a local realtor or other professional.