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I'm one of those who is firmly opposed to the "vacation home" concept. Maintaining two residences in a major pain--I've done it--a usually a much larger expense than people anticipate. Silverton is still--and likely will remain--a one season town--summer. When the train stops running to Silverton in the fall, most of the town folds up until the train starts running again in May. Many rental properties sit vacant except in summer.
For most people, retiring in Silverton is a poor idea. The town is very isolated in winter, probably the most isolated year-round occupied place in Colorado. Medical emergencies can easily become life-threatening there if one occurs when driving conditions are dangerous or impossible over the passes. It can even be a difficult place to get evac'ed by medical helicopter in winter. Routine medical care and even general shopping for necessities can be an adventure in winter. Most people who have not grown up in that environment or lived in it for many years are simply unprepared for those kinds of privations.
I have had friends in Silverton for decades and I nearly went to work for the mines there long ago. I know it better than most people. It is a beautiful place, but living there is not something that I would want to do at any age over about 40--not unless I had lived there most of my life. Even some of my friends that lived there most or all their lives have moved away from there in retirement. It's just that tough of a place. People who have no experience with EXTREME winter both in length and conditions have no business moving there.
I must say, for once I completely agree with Jazz on this one. As a senior, Silverton is too isolated & lacking in good medical care to consider as a retirement destination. In addition, you may find yourself unable to live at an altitude of 9,300' due to altitude related health issues. Not uncommon to have US550 closed in winter storms. That's why they have gates in Silverton & at the bottom of Coal Bank Pass.
I'd think long & hard about that retirement scenario.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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1) Silverton is very far from jobs / commerce, and tough climate (and expensive) Tough to get to, tough to rent, tough to maintain.
2) Unless you REALLY want a single / same place to retreat to... it is MUCH wiser to spend the same dough on a cash flowing rental in a vibrant and cheap TAX FREE market (like TX...) and THAT cash flow pays for your vacations; whether Tampa, Telluride, or Tahiti. Commercial tenant NNN properties are ideal. (No maint, no taxes, no hassle... you are renting a shell and commercial tenant must maintain and provide for improvements / bills) COmmercial rentals are far more likely to NOT trash their business location.
3) Option (not recommended in Silverton)... build / buy a place with a cabin / mobile home / and a shop with an apartment. Rent out the main house and live in the apartment (for free) when you want to visit. I do this in my Hill Country TX place. It brings in a 12% Net cap rate. That is not possible in an area with high property costs (Colorado).
Personally... I would never want a cabin 10 hrs away to sit 80% of the time while I literally sweat in TX wondering if it is vandalized / squatters / frozen / burnt down...
Thank you all for all of your interesting perceptions. I see that its cheaper to purchase a existing log cabin for investment purpose would be ideal in the Grand, Summit, and Eagle county. The idea is that we would hire one of our trustworthy friends who lives in Colorado would just basically manage our property while we're in Dallas TX. We can go to Colorado once a year or something like that.
Based on your experience which season is the most peaked or booked getting our property rented out?
Ski season. Also a lot of tourist traffic in the summer.
High season would be from around mid-December to January 1.
Go to a website like VRBO and look at the prices and calendars for places similar to what you are considering. That will give you an idea of what to expect in rental income. Obviously you also need to factor in HOA fees, utilities, management fees, cleaning fees, etc.
As others have mentioned, you'll want to look carefully at the fiscal soundness of any vacation property "investment" in Colorado. Not to mention other factors like maintenance, which could prove a headache at times whether anyone else is managing the place or not. Then, too, that in a sense it can never be your home away from home—but more like any other rental property one might use—due others having used it (and quite likely having to lock away, or simply not have that treasured and/or easily breakable).
From what I've seen, perfectly fine rental vacation properties in Colorado—with professional management—do not always stay rented. While this surely depends on the exact property in question, still being rented perhaps more the exception than the rule.
In Summit County I've seen large condo complexes which had near full occupancy over the 4th of July weekend, less than that on other summer weekends, and decidedly less in a long shoulder season such as spring. A unit that might be rented on some summer weekends being usually vacant during the weeks. If in the right spot (as in the closer to a ski slope the better) I expect one could probably keep a property rented more or less solidly from mid-December (Christmas holidays being a prime time) through March. But if aiming for this one would want to do their work with a realtor to insure the right spot and likelihood of such rentals.
Factor in the high cost of real estate near ski resorts and the best one could possibly expect would be to have rentals cover some of the overall cost. My feeling that all this would pencil out best with a cabin off the beaten track, with a far lower cost to acquire, yet in a still desirable mountain area that some vacationers might like to rent for a week or several at times. In just the right spot, perhaps such an enticement winter or summer, or even between.
Despite the exorbitant costs, one advantage in ski resorts is that one can often be assured of two decent rental seasons: winter and summer. Winter for skiing and winter sports, of course. A place like Copper Mountain is fairly dead in the summer, but other nearby resort areas such as Breckenridge and Vail see a fair number of summer tourists, and any number of activities offered to entice them. If still, about half the year still falls into the shoulder, and far quieter seasons of autumn and spring.
Estes Park serves as a good example, if there is no downhill skiing nearby. Thus despite the machinations of the town fathers, winter tends to be fairly quiet there (if oft a winter wonderland). Their big season is summer when most of the 3,000,000 tourists to adjacent Rocky Mountain National Park visit. With in lesser measure this carrying over into early autumn, with attractions such as the elk rut. A suitably sized, located, and priced, rental there should be able to stay fairly well booked throughout summer. But that about it, if aiming for the expensive vacation market. However, a decent property sized so that you might visit when wanting, but also separate accommodation for year-round tenant(s) would easily rent on that basis.
Thus hopefully you may appreciate that rental prospects will vary depending on a number of factors. To choose just one and the most important: location, location, location.
Your number of rental days per unit each year is way high. Even with a prime location of a mid-price range condo in a two-season resort town such as Aspen or Vail ... many units don't see 100 days paid rentals per year. Few are booked solid from mid-December (actually, the season starts with Thanksgiving and most of December is early season with a lot of vacancies) through March. Once past the major holidays of Christmas/New Year's/Spring Break ... many units will sit vacant except for an occasional weekend rental. Summer rentals are also a slack time, and the shoulder months ... especially after Labor Day weekend ... are essentially dead time.
If that unit is a short-term rental, that means numerous turn-overs of housekeeping costs to the owner. The OP's friends in Colorado will quickly tire of having to show up to clean/change linens/refresh towels/make sure the kitchen is all there and maintain the unit in a rental ready condition (especially if they're doing it for free or a nominal charge for just the one unit). That's in addition to marketing costs/agency fees if using them to get clients. The managers are also collecting rental money, receiving and refunding deposits, and paying out repair costs as needed along the way (plumbers, electricians, carpenters, HVAC folk, etc). There's the ongoing water, sewer, gas, and electrical bills to pay ... even when the unit isn't rented, these are ongoing costs.
IMO, a rental house/cabin removed from the prime attraction areas will not cash flow in Colorado's resort marketplace. I tried this approach, too, when I was involved in the horse arena biz in the region. "let's get a place where folk with horses can keep them in a barn for a weekend, a neat little place cozy and comfortable 2 bdr with a loft for kids/guests, good access to Nat'l or State public lands to ride with gorgeous vistas and trails ... the whole 9 yards that you'd want for yourself. Not too far from Denver so folk could justify the trip up the hill and back and get plenty of riding time during a weekend." I got eaten up in marketing cost and heading up there to put into rental ready condition for each rental, plus checking on the place after each rental to be sure that I could refund the security deposit.
I'd again urge the OP to approach a rental property ownership situation only as a business. Either it will cash flow or it won't ... most properties bought at FMV in the Colorado resort areas will not cash flow for absentee owners after all the other costs are paid out.
PS: looking at VRBO posted rates gives no indication of the rental occupancy nights, which is the big part of the income picture. Just because a place gets X's per night, perhaps with a several night minimum rental ... doesn't mean that it's getting rented out very frequently.
True, and there are some very good reasons, most of which I enumerated above.
I Know and thank you for reminding us, I just wish you had not been so hasty in your big move to Los Angeles. You will be comfoted to note that I am buying 500k acres in Central Colorado and turning it into a water park and the high countries first high end gated second home communties to offer 40k +square foot homes with heated ten car garages. Whatta ya think Jazz in naming the first street..Equity Locust Lane maybe?
Thank you all for all of your interesting perceptions. I see that its cheaper to purchase a existing log cabin for investment purpose would be ideal in the Grand, Summit, and Eagle county. The idea is that we would hire one of our trustworthy friends who lives in Colorado would just basically manage our property while we're in Dallas TX. We can go to Colorado once a year or something like that.
Based on your experience which season is the most peaked or booked getting our property rented out?
Sounds like you are driving yourself over a cliff with both eyes open and will not realize what you are getting into until you implode into the ground. Time to put the fantasy away and deal with reality.
I would say if someone is living in Colorado at least 6 months of the year, a 2nd home is a viable option. But visiting once a year and owning a place is total insanity. There is a huge excess supply of vacation home rentals out there. Rent what you need when you need it.
Property management is a full time job. There is a reason why property management agencies charge 50% of rent in the mountains to manage vacation properties. Someone has to market the property, answer the phone and emails, hand out the keys, do the laundry, clean the poopy toilets, fix all the broken stuff renters break. I severely doubt your "trustworthy" friend will be doing this for cheap as a hobby. It's a full time job so deduct that cost from any rental income you receive. Then deduct repairs, renovations, security, homeowners association fees, monthly utilities, general upkeep, property taxes and when it's all said and done there isn't much left in income if anything. Also any vacation property in order to generate rental income must be kept clean, updated and in good nick. People don't want to vacation in a dump. That costs money to do so.
"Investment" vacation property in the Colorado mountains isn't much of an appreciating investment after expenses and time involved, rather it's a flaming tire around your neck. There are people that make money at it, but those are people that know the market, they are well connected locally and work very hard full time at it. They make their money off of suckers that fly in from places like Texas and go "oh mah gawd, so puurdy" and who get suckered into buying "investment" property. My family has been in the Colorado mountain real estate business for generations and decades. They will be high 5'ing when they see someone like yourself coming.
You mentioned Silverton in the beginning. Keep in mind Silverton is a dump of a town with the shortest growing season in the USA(2 weeks) and the coldest overall average temps in the continental USA. It's isolated, extremely cold and there isn't much you can do there due to the brutal conditions. I know an outdooresy guy that moved there and even he after a few months was ready to poke his eyes out.
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