Investing in property is always an exciting endeavor, especially when it’s one that’s part of a huge seasonal market. After all, nothing says winter joy like renting a cabin and going skiing.
Before you go invest in a ski rental property, however, you should know the pros and cons of owning one.
Pros of Investing in Ski Rental Properties
Ski resorts are a unique investment opportunity in that interest primarily rises during a specific season and have huge spikes as a result, whereas normal rental property may run steadier. There are some distinct advantages to owning this type of property, such as follows.
It’s a High-Interest Market
Ski properties are a well-known market with a lot of established interest. Not only are they luxury investments, but they attract luxury guests.
The number of mountain resort sales transactions rises with the number of skier visits at the resort. As such, if you invest in property at a popular resort, your return on investment will be much higher.
This is especially true since luxury ski properties start in the six-figure range. Although the initial investment will be heavy, the high interest and high rates you can charge should offset the cost fairly quickly.
As for this year, despite COVID concerns, resorts that benefit from domestic trips are set to recover strongly over this next winter season.
Ski rental properties bring in returns seasonally, as opposed to fluctuating throughout the year. What the means is that you can plan your finances around the expected highs and lows.
For example, in the summer most smaller ski resorts shut down. Larger resorts will usually still have activities, but the primary source of revenue will have ended.
Cons of Investing in Ski Rental Properties
Though there are many benefits to a ski property investment, there are also challenges. Your return on investment is dependant on the resort’s success as well as seasonal changes, among other things.
Yes, you have to maintain the ski rental property even if you’re not there. For the most part, that means hiring someone to check-in, clean up, and do some maintenance.
You could also take the opportunity to improve the property’s amenities and get it ready for future snowstorms.
A ski lodge investment can potentially be risky based on a number of factors.
Not only do you want to buy the right location at the right time, but if something goes wrong with the building, you could lose out on a renter and your reputation can suffer.
You’re also dependent on the resort, which means paying association fees and adhering to their rules and expectations.
Choose a Ski Rental Property Today
As you can see, despite the risks and investment that goes into owning a ski rental property, you’ll be sure to get an immediate and hefty return on your investment. While the initial price may be steep, it’s a big and popular market.
For more tips and advice, check out some of our other articles.