Beaver Run & Liftside rental condos

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.

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