Q.  Hi Susana- we are looking for a condo in Steamboat. Do you have information on the average nightly/weekly/monthly rental rate for a unit as described above? If not, can you direct me to a good source for this information? This will help us evaluate the opportunity. Thanks.

A. Great question. Unfortunately, there is no single place to go to, to get that information, except on a condo by condo basis.  Here’s why:

• Every development has its own rates, and this largely depends on the condo’s location (how close it is to the base of the ski area, for example, or downtown) and amenities (whether it has a pool, shuttle service to the ski mountain or downtown, hot tubs, tennis courts, etc.).
• Then even within a development there will be different rates depending on the season and even the night. The highest rates are typically the week between Christmas and New Years, during the ski season in general with peaks during President’s holiday and school spring breaks, etc. The shoulder seasons of spring, after the ski area closes, and the fall, before the ski area opens, command lower rates.
• It is fairly easy to get a general idea of what the annual rental figures will be, by asking for rental history figures from the past, for any of the condos on the market. I can help you get these figures. They often are in the form of an Income and Expense sheet given to the owners by the management company.
• Another thing that affects the bottom line is how much the owners have used the condo (and thus had it unavailable for rental), as well as when the owners used it (personally using it during the highest-income holiday week, for example, will have a greater impact on your annual income than using it during the off season). Which is not to say that you shouldn’t use it during that week – after all, one of the pleasures of having your own vacation condo is being able to use it when you want to – but just that sometimes the owner’s use is, and other times isn’t, included in the income and expense reports which we have access to.

Nevertheless, I can certainly help you analyze the figures and the properties. 

A couple of other things to keep in mind are:

• Regardless of the rate or the condominium development, one thing you can count on is that in Steamboat, to be conservative, it is typical to figure that 50% of the rate will stay with the management company and the other 50% will go to you.
• Your Home Owner’s Association (HOA) fees are independant of your management fees, and these can vary greatly between condominium projects.
• If you are interested in getting financing to help with your purchase, it’s important to know that financing for condominiums in developments that allow nightly rentals (even if you’re renting your individual unit or not), is quite limited. In addition to meeting the usual requirements demanded by lenders these days (good credit score and income), you should anticipate needing to bring 25-35% of the purchase price with you to the closing table, and borrowing the rest.

Hope this helps!

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