Webinar #17: Colorado Mountain Deal Analysis – Summit County

In this webinar Amy Nakos discusses buying a second home / vacation home in Summit County, CO (Breckinridge, Keystone, Frisco, Copper Mountain.) She discussed renting it out on a short term basis to help pay for your vacation home. Two active MLS deals are discussed and analyzed on this webinar. Amy walks through considerations of buying a home in the mountains.

Webinar Recording


Listen to this on our podcast channel.

Webinar Outline and Notes

Here is an outline with notes that I typed up for my own reference. Hopefully it can help you as well.

Mountain Resort Considerations

Pricing / HOA:

  • You’re looking for a second / vacation home, NOT a primary residence. First issue: It starts with “How much can I afford?”
  • The better the location, the smaller the size.
  • More expensive the closer you are to the ski lifts, views, or proximity to a bus line.
  • HOA’s – love or hate them. A lot have them!
  • 1.1 to 1.2 million is the average SFR price! To avoid HOA, you need a big budget…
  • Example: $450/mo HOA for a 2/2 condo near the ski lifts.
  • Mountain HOA’s include a lot more than your typical HOA – Internet, wifi, cable, heat, trash, water, sewer, pool, some  walkways are heated
  • HOA rules affect your daily life. Do they allow pets? (most do, a in Keystone don’t.) Ask questions.
  • Before buying, look at HOA reserves. Do they have enough for unexpected expenses and putting reserves away?

Rental Income:

  • Generally speaking, a property with 20% down / 80% debt, will not have instant cash flow. More likely than now, you’ll be subsidizing the property. Keep in mind, it’s not strictly an investment property! You and family are using and enjoying it. Use short term rentals (STR) to offset housing cost.
  • The mountains a tourist destination. Short term rentals are the way to go.
  • Remember, your tenants are on vacation, so you (or PM company) will have to deal with Trash, parking, noise, wear and tear, marijuana, etc.
  • No tax difference between renting on Airbnb vs traditional short term vacation rental.
  • 8-10% tax for STR
  • Property management fees range from 20% to 50% of rental revenue.
  • The more hands on you are, the more you can save.
  • https://bookbyowner.com/ – Newer service to support Airbnb hosts. You book, they do all the on-site support (cleaning, keys management, etc)
  • Occupancy:
    • 100-140 nights occupancy on average.
    • 180 nights for highly desirable locations (Beaver Run, walk out to slopes.).
    • 100 nights or less for a drive to slope, bad listing photos, poor property shape.
  • Zones: Amy uses a 1 to 5 zone rating.
    • Zone 1: Step-out and you’re on the slopes.
    • Zone 2: Walk to slopes.
    • Zone 3/4: On bus route.
    • Zone 5: Drive to slopes.
  • Estimate 75% to 80% of rental income in the winter.
  • Christmas, New Year’s, President Day, March (spring break) are peak times.

Summit County Pricing Trends:

  • Great appreciation last 3 years.
  • Usually follows / lags Denver by 1 to 1.5 years.
  • 2015 is when appreciation started.
    • 2015 – ??
    • 2016 – 10.2%
    • 2017 – 18%
  • Only 29,000 properties in all of Summit County.
  • 315 active properties as of March 2018
  • 2,500 is yearly sold, average.
  • Some new construction online. 50 to 100 units
  • No new condos in Keystone since 2002!
  • Buyer pool %
    • ~40% from Denver / Front Range
    • ~35% from out of state (Florida, Texas)
    • ~28%  local buyers
  • Expect to pay a 1-2% transfer tax of purchase price (buyer typically pays.)
  • Is there still an opportunity to buy? If Denver is doing well, mountains are doing well. If Denver slips, mountains slip in 1 year.

Deal Analysis, Spreadsheets, and Trends

Deal #1: 1/1 condo in Keystone 

91 RIVER RUN ROAD #8143 KEYSTONE, CO 80435

Price: $405,555

Ski slope views! Top floor, completely updated condo in Keystone! Short walk to Gondola and ski slopes. Enjoy dining and shopping options in River Run Village. Access to Dakota Pool and Hot tubs. Don’t miss this amazing ski condo! Excellent Rental Opportunity!

Property sheet w/ Pictures download (click here)

APOD Spreadsheet  (click here)

Deal #2: 4/4.5 home in Frisco

216 CHIMING BELLS COURT FRISCO, CO 80443

Price: $1,499,000

This is a builder’s personal residence – be prepared for amazing. This home has four bedrooms, each with its own ensuite bathroom; hand scraped cherry hardwood floors and a big window plan in the great room; plus a huge island, walk in pantry and custom cabinetry in the kitchen. Doors & trim are solid alder. The home is fully insulated with an extra layer of spray foam for high energy efficiency and quiet. Lower level 2nd living and office. Located on a private cul-de-sac. $75K projected income.

Property sheet w/ Pictures download (click here)

APOD Spreadsheet  (click here)

Trends:

Summit County Trends (click here) – 2017 Q3

Vail, Grand, Summit, and Steamboat Trends (click here) – 2017 Q3

Q&A From Webinar

Below are questions, with my answers (from Amy)

  • So you are saying, the more expensive the property (i.e. closer to the lift), the lower the vacancy?
    • Generally, YES
  • What Zone is Ski Tip Ranch in?
    • Zone 1
  • And where do you see home values in Keystone going over the next 5-10 years?
    • No crystal ball. People move to Denver for the lifestyle… w/o mountains, it would be Kansas City. I7-0 is a bummer for day trips. Pent-up demand!
  • Have rental rates followed appreciation rates over the last few years? What about vacancy rates over the last 5 years?
    • Not sure. Talk with PM company for detailed rates
  • Is there a minimal amount of rental days you have to rent your property to be classified as an investment property?
    • 14, But check with CPA or tax professional.
  • In regards to the transfer tax, is it everywhere in Summit and the mountains in general or just certain municipalities or complexes? Is it for just attached properties or does it apply to single-family as well?
    • Keystone is 2%
    • Breckenridge is 1% (town limits)
    • Frisco is 1% (town limits)
    • Summit County has no transfer tax
    • Copper is 1.5% in Village only.
  • Who is the Winter Park go-to agent?
    • Monica Graves, 303-901-5224, monica@remonica.com (we’ll be doing a future webinar with her as well.)

About Amy Nakos

About Amy: Amy Nakos lives in Frisco, Colorado where she has been a real estate professional since 2003. She and her husband own and operate a mixed use commercial and residential property that they purchased out of foreclosure and have also developed a new construction four-plex. She is the managing broker of Your Castle Summit LLC, and is also a licensed Colorado attorney. She loves helping her clients build wealth through real estate and especially enjoys sharing her love for her community. She spends her free time with her husband Darren, her two sons Tyler and Max, and her dog, Chester and enjoys skiing, biking, hiking, fine wine, trying to golf and being outdoors.

Contact Amy: Amy Nakos | anakos@yourcastle.org | 970-389-8388 | www.amynakos.com

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Chris Lopez
Chris Lopez is a Denver area real estate entrepreneur and investor, as well as the host of Bigger Pockets’ House Hackerz and the Denver Real Estate Investing Podcast.
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