Archive for the ‘Investment / Rentals’ Category

Breckenridge Colorado Investment Real Estate Under $600K

Friday, May 6th, 2011

Breckenridge Colorado is one of the most popular destination ski resorts in the world attracting over 1.5 million skier visits per year. And with a wide variety of film, music, theatre, and arts and crafts related events as well as all of the outdoor activities that the Rocky Mountains have to offer besides skiing, Breckenridge is a true four seasons destination resort. As a resort market, many considering the purchase of Breckenridge real estate do so with potential rental income as their primary criterion while shopping for property.

Individuals considering the purchase of a Breckenridge single family home as a rental investment property should determine if they prefer to rent the home to visiting tourists for short stays or to rent the home on an annual or seasonal lease basis. Potential Breckenridge house buyers should also consider whether they would like to use the services of a rental management company or to rent the home directly themselves. This is because Breckenridge homes which may not be of interest to local rental management companies for the purposes of short term tourist bookings may still have fairly good rental potential on a longer term lease basis or as a Breckenridge "by owner" vacation rental property.

Sleeping capacity is one of the main criteria that rental management companies will look at when considering a single family home in the Breckenridge Colorado area for short term rental purposes. All else being equal, larger homes with greater sleeping capacity are typically more appealing to Breckenridge rental management companies than smaller homes. Other criteria to be considered include proximity to the Breckenridge Ski Resort and the town of Breckenridge and whether or not the property is on one of the free public shuttle routes. Age and overall quality of an individual home and its amenities such as hot tubs, home entertainment centers, pool tables, etc. also attract the attention of rental management companies and help generate repeat visits by guests regardless of whether or not the property is being managed by a local booking company or being rented on a "by owner" vacation rental basis.

All of these same criteria apply when rental management companies consider a multi-family residence (i.e. condo, town house, triplex, etc.) except for sleeping capacity. In fact, studio condos are one of the most popular lodging options for Breckenridge rental management companies, visiting guests, and therefore Breckenridge investment property buyers alike.

Most rental management companies in Breckenridge Colorado focus on short term tourist rentals and will not accept into their rental management inventories most single family homes in Breckenridge that would sell for less than $600K. This is because such homes are typically smaller and older than the average Breckenridge home and are not located within walking distance of the Breckenridge Ski Resort chair-lifts or town of Breckenridge downtown area. Even Breckenridge homes on one of the the free public shuttle routes within this price range are few and far between.

But, there could be exceptions to this $600K rule, especially when it comes to homes located north of Breckenridge, between Breckenridge and Frisco. If a home with a value of less than $600K in this area has great mountain views, a private hot tub, easy winter access, and is of good overall quality, it could be of interest to Breckenridge rental management companies for the purposes of short term rentals (i.e. tourist bookings). One would have inquire with the property management companies in Breckenridge to see which might be interested in taking such a home into their inventory and what they would estimate its rental potential to be.

Also, many Breckenridge homes that are not of interest to local rental management companies can still generate rental income on "by owner" vacation rental web sites and/or they can be rented on a longer term annual or seasonal lease basis.

With all of this said, if rental income is the primary criterion for someone considering the purchase of Breckenridge real estate for less than $600K, a condo or townhome is at the very least worth considering as the revenue generated from such a property will often be greater than that of a comparably priced single family home.

As a general statement, sale prices of Breckenridge homes and condos have been effected by the market downturn of recent years in a similar manner.  However, to be more specific:

1) Larger, and therefore more expensive, single family homes have been somewhat more effected by the market downturn than smaller and less expensive homes. As of May 06, 2011 there were 218 single family homes on the market in the Breckenridge area. Of these, only 44 were priced under $600K. Within the previous year, there had been 171 single family home sales in the Breckenridge area and 53 of them sold for $600K or less. This means that within the under $600K price range, the supply of available homes and the demand for them is fairly well balanced with less than a one year supply currently on the market. In the over $600K price range, the market is over supplied which has more of a downward pressure on price.

2) Looking at the multi-family residence (i.e. condo, town house, triplex, etc.) market in a similar manner, as of May 06, 2011 there were 364 multi-family residences for sale in the Breckenridge area with 282 having sold in the previous 12 months. Within the under $600K price range, there were 227 active listings and 182 sales in the previous 12 months. Therefore, there is well over a 12 month supply of available listings in both the over and under $600K price ranges.

To summarize, the under $600K single family home segment of the Breckenridge residential real estate market is the strongest segment of the market when analyzed in the above supply vs. demand manner. It is also the segment of the Breckenridge real estate market with the least potential for short term rental income generated through Breckenridge based rental management companies.

It is also worth noting that the Breckenridge multi-family residence market has experiencing something of a resurgence in demand with sales up threefold from the first quarter of 2009 to the first quarter of 2011. If this trend continues through the rest of 2011, Breckenridge condos, town homes, and other multi-family residences could lead the price recovery of the Breckenridge real estate market. And potential appreciation is always a consideration for any Breckenridge investment property buyer.

Copyright 2011 – All rights reserved by Ted Amenta

Notice: Publishers are free to republish this article on an ezine or website provided the article is reprinted in its entirety including copyright and author information, and all links remain intact and active.

Living in Breckenridge Colorado since 1992 and a Breckenridge Real Estate Broker since 1998, Ted Amenta is the Broker/Owner of Amenta Real Estate specializing in Breckenridge investment property as well as 2nd home and vacation real estate throughout Summit County Colorado. Summit County Colorado is home to the ski areas of Breckenridge, Keystone, Arapahoe Basin and Copper Mountain as well as the nearby towns of Frisco, Dillon, Silverthorne, Blue River, Wildernest, and Heeney.

More Breckenridge Investment Property

Thursday, November 4th, 2010

The following is a continuation of the correspondence from 10/18/10.

Question: What is the name of the place by Quicksilver that is a bit less expensive than Beaver Run?

I expect that you are thinking of The Village at Breckenridge. There are currently two listings here, a 940 Sq.Ft. 1 bedroom for $499K and a 960 Sq.Ft. 2 Bedroom for $799K which had first come on the market over a year ago for $649K.

The Village at Breckenridge studios are located in a building called Liftside which currently has three listings priced between $299K and $359K.

There is also another building here with larger condos called Chateaux Condominium Hotel which currently has two listings. One is a 1267 Sq.Ft 2 bedroom for $725K and the other is a 1709 Sq.Ft. 3 bedroom for $899K.

This is all fairly light inventory for the Village at Breckenridge which has had a complete exterior renovation taking place all summer. I expect that when this work is done, we will see several new listings come on the market.

Another property near the Quicksilver lift is Main Street Station which also has good rental pontential. Prices here are typically higher than at Beaver Run. Prices at Main Street Station currently range from about $335K for a studio to about $1.7 million for a 4 bedroom.

Question: I have a hard time with the search because most searches yield several dozen real estate listings. What is the best way to limit the real estate search results?

The easiest way limit the search results will is to be as specific as possible, especially when it comes to price. Once you have a list of results, you can also use the "Map it" feature. For the best rental potential in Breckenridge, you will want to focus on properties close to the chairlifts and not give much consideration to anything East of Rt.9, south of River Park Dr, or north of Sawmill Dr.

And of course, I will be able to provide you with a list of the best properties once we narrow down the size and price range that you desire.

Question: How do inventories look compared to historical norms?

Part of the reason I started posting the Summit County real estate Active / Under Contract / Sold YTD tables was to keep better track of this info for myself. I have always paid attention to these numbers but not recorded them. When I saw 743 active residential listings in Breckenridge on 05/01/10, I thought we were on our way to reach 1000 active by the summer peak. This is something I have not seen before and we did not quite make it this year either. 945 active residential listings on 07/15/10 was the most I have seen in Breckenridge. But oddly enough, the 2105 for the county as a whole was not all that unusual for that time of year.

In general, I have found that 450 or fewer active residential listings in Breckenridge has meant a lack of inventory and 750 or more has meant an abundance of it. These numbers also vary with the season with the summer being the time of peak inventory.

Owners who do not sell during a given summer often decide to keep their properties for another ski season and try again the following year. This is especially true for rental properties.

With all this said, 808 active residential listings in Breckenridge on 10/15/10 means that there is certainly an wide selection of properties for you to consider.

As I look through the list of available condos in Breckenridge right now, I notice that all of the following buildings have multiple listings which could have some potential for you:

Beaver Run Condo, Cimarron Condo, Corral At Breckenridge, Der Steiermark, Condo Los Pinos, Main Street Junction, Main Street Station Condo, Mother Lode Condo, Mountain Thunder Lodge, Park Avenue Lofts Condo, Park Place Condo, Pine Ridge Condo, Powderhorn Condo, Retreat Condo, River Mountain Lodge Condo, Sawmill Creek Condo, Ski Hill Condo, Sundowner Condo, Tannhauser Condo, Trails End Condo, Twin Elk Lodge, Tyra Iv Riverbend Lodge Condo, Tyra Summit Condo.

Once I have an idea of your current price range, I will be able to narrow this list down quite a bit.

Question: The condo fees at Beaver Run say they include insurance. Do you know what type? Does it include loss of use? vandalism and theft?

The will be a question for the Beaver Run home owner’s liaison there but I very much doubt that any of the above would be covered. HOA insurance typically covers the restoration of the property after some kind of damage. The above sounds more like what would be covered by your own contents and/or renters insurance.

HOA insurance typically stops with the paint for a given condo. Anything on the inside the paint is up to the individual owner.

Questions: I see there is a three and four bedroom at Beaver Run, which I understand are pretty rare. What is the price history on units like these (may be spotty). The 4BR looks like the better deal. Do you know the 2009 rental income on the 3BR? Do you know owner usage of each unit? How do you think 2010 income will compare to 2009? What do you think of the location of each? I think the 3BR is in building II. I only know where building 4 is. Where is the 4BR?

There is currently a 4 bedroom at Beaver run for $799K and a 3 bedroom (really a 2 bed + loft) for $699K. Both are in building #2 which is the one to the right of the walk-way as one walks from the check-in/conference building to the ones where the condos are located.

The most recent sale of the 3 bedroom floorplan was in building #3 in May of ’08 for $795K. The most recent sale of this floorplan in building #2 was in Nov of ’04 for $530K. The most recent sale of the 4 bedroom floorplan was in building #2 in Dec of ’04 for $663K.

I have links to rental histories for Beaver run posted here:

http://www.amenta.com/breckenridgerealestate/beaverrun.htm

The listing details state that the 2009 gross rental income for the 4 bedroom was $68,290. However, this is also the number given for the average of condo of this type.

The listing details for the 3 bedroom show gross rentals of $41,842 in 2009 and also mention that the property was not being rented for part of the year.

Specific owner use is rarely available at Beaver Run as the rental management company does not provide this and few owners track this for themselves.

The rental figures that I have pulled for various condos so far this year have been fairly consistent with those of last year for properties within a similar price range. I would not try to guess what future rental income might be for any given property. Snowfall plays a major factor here as does the overall economy. However, www.summitdaily.com sometimes has articles which mention the projections of Vail Resorts (which owns the Breckenridge Ski Area) and advance booking figures from a variety of sources.

Question: I thought I read that Beaver Run will likely build more units. How will this affect value of existing units? Where would the new buildings go?

I would be interested to see what your read and where. I made some phone calls on this and was told that for density reasons, there is nowhere for new buildings to go and there are no plans to build new units.

Breckenridge Vacation Rental by Owner

Monday, October 18th, 2010

More correspondence, this to an individual considering the purchase of a 2 or 3 bedroom Breckenridge condo in the $275K to $325K price range which he can rent out himself:

Many Breckenridge investment properties have listings on VRBO.com here:

Breckenridge Vacation Rental by Owner

The only 3 bedroom under $300K within walking distance to the lifts is a Ski & Racquet listing. And this is a long walk and I expect that most guests staying here would take the free shuttle which has a stop on site.

All of these properties can be sorted as follows:

Easy walk to and from slopes and lifts:

GRANDVIEW AT BRECKENRIDGE CONDO
MINERS CANDLE CONDO
TANNHAUSER CONDO
WILDWOOD LODGE CONDO – From trail

Long walk or shuttle:

FOREST HAUS CONDO
GOLD CAMP CONDO
SKI AND RACQUET CLUB CONDO
WILDWOOD LODGE CONDO – To lift

At least a few of miles away:

LODGE AT 39 DEGREES NORTH CONDO – South of town
VILLAS AT SWANS NEST CONDO – Between Breck and Frisco

Breckenridge investment real estate Q&A 10/18/10

Monday, October 18th, 2010

The Breckenridge Ski Area is scheduled to open in 25 days and this means that those considering the purchase of Breckenridge investment property are beginning to do their homework once again in order to get their purchases made by the beginning of the peak rental season.

The following is an example of some recent correspondence with more to follow:

Question: How is real estate in Breckenridge these days? Prices? Rental income?

Answer (and a long one):

Breckenridge real estate sales volume, prices and rental income are all off of their highs, reflecting the economic downturn, and the ratio between prices and income has remained fairly consistent.

I have general market data posted here:

Summit County Real Estate Market Data

The Land Title Summit County Gross Real Estate Volume chart shows 2010 sales volume similar to that of 2009. I also track active listings, under contracts, and sales at the bottom of the page here:

Summit County Active Listing / Under Contract / Sold YTD tables

Highlights of the 10/15/10 data are as follows:

1) There are about 300 fewer residential properties on the market in Summit County now as compared to the inventory peak of 07/15/10. In Breckenridge, this number is 137.

2) For the county as a whole, there have been 200 fewer sales residential sales YTD than there were in all of 2009 with 219 currently under contract. In Breckenridge, there have been 69 fewer sales YTD as compared to all of 2009 with 100 currently under contract.

3) Summit County land sales YTD is only 1 shy of the 2009 total. In Breckenridge there have already been 3 more land sales than in all of 2009.

Inventory is down across the board when compared to the summer months and you can see the current inventory and pricing here:

Summit County Real Estate Search

I posted the following info in mid-August and it will give you an idea of how prices have moved off of their highs:

Beaver Run Building #4 Sales

A few more examples are as follows:

1) I recently closed on a Lodge at Riverbend condo for $370K which could have sold for as much as $495K at the peak of the market.

2) This summer, I saw Treehouse condos selling in the $160K range which had been selling in the $200K to $220K range at the market highs.

3) I currently have a lot listed for $325K which could have sold for $500K to $525K at the market peak.

Beaver Run & Liftside rental condos

Wednesday, February 18th, 2009

The following is a copy of some of my recent correspondence that might be of interest to others considering the purchase of investment property in Summit County Colorado.

This correspondence refers to Beaver Run Condo and Liftside Condo.  Both are good ski-in / ski-out rental investment properties in Breckenridge.

Buyer> Thanks! I’m surprised that the studio did hardly better than the townhouse. My knee jerk reaction would be that the smaller the place is the better it would do.

It is often the case that studios will out perform larger condos at the same property on a rental basis.  The two bedroom I selected on this page is particularly attractive in terms of price / quality / rental numbers.  This is the reason I choose it.  Had I picked any other two
bedroom condo on the market at Beaver Run at the time, the net income as a percentage of list price would have lower.

Buyer> How are prices doing? I know ski country inflated later than other areas in the US but is finally being hit in some places (like Park City, UT). Is Breckenridge seeing any downward pressure?

We are seeing downward pressure on prices in that Buyers are making low offers and then walking away when the Sellers refuse to accept a price that is not at least close to a recent sale of comparable property.  This is causing overall sales volume to be down but prices are remaining mostly flat.  For us, flat is a shift in the market having seen fairly modest but steady appreciation for the last decade or more.  I saw similar market conditions for a few months after 9/11.  We are now about year into this market.

Sellers have been willing to keep their properties based on their past experiences with renting them.  Bookings are down this ski season due to the economy and I expect that we might see real estate prices reflect this soon.  The only hesitation I have with this notion is the current state of the financial markets.  Sellers consider their properties worth at least what they were when the DOW was approaching 14,000.  Today the DOW closed at 7,552 and I do not see many bullish financial analysts out there.  Many investment property owners are reluctant to come off their price without an attractive alternative investment to put their money into.

Liftside Condo offers a good case study into the above points.  There were two sales at Liftside in ’08.  One for $329,000 and the other for $330,000.  The last sale was on 02/27/08 yet there are currently only 7 such properties on the market.  At first, this may seem like a lot with nothing selling there in almost a year.  But there are 120 Liftside Condos in the building.  I remember other times when there were 20+ listings at Liftside and they were selling.