First things first – We are not a short-term vacation rental specialist so PLEASE contact one of the many we have servicing the Park City market to get the full run-down. But… since approximately 80% of the properties in Park City are second homes, and we’ve owned and operated multiple short-term rentals, we do have some good insights on how to get started.
So you want to buy real estate in Park City, rent it out, and then use it when it’s not rented? First comes a great idea, then comes the implementation. We always like to suggest those buyers not purchasing with cash get prequalified for a loan with a local lender here in Park City. These local lenders know the market, they know how long appraisers take, they know which products are warrantable, etc. Out-of-town lenders who don’t know our complex market sometimes need more time to close, which can hurt your ability to negotiate a good price on the purchase of your vacation home. Second homes and Park City vacation homes often require more down payment than you’d need when buying your primary home and rates can be different, so get started with a great local Park City lender.
Choosing the Property – The next major step in owning a Park City vacation rental is making sure the property you choose is in the right location. Certain areas have zoning laws that may prohibit your ability to operate your nightly rental. Park City is actively trying to prohibit people from attempting to rent in neighborhoods that are not zoned for fewer than 30 nights rented and this issue is more important than ever in determining where you buy.
Once you are clear for takeoff and nightly rentals are allowed, you have to find a location that renters will actually want to show up to and continue to rent year after year. Ski-in Ski-out properties are limited and costly for some, fortunately, Park City has an incredible bus system that takes you directly to Main Street, Deer Valley, the base of Park City Mountain, and the base of the Canyons Village. Being on or near these bus stops is valuable unless you can walk directly to any of the locations listed above. Location reigns supreme when choosing your vacation home as your ability to generate revenue is closely tied to being somewhere people want to visit. Having an up-to-date home or townhome is also really important. Renters often pay top dollar for newer vacation rentals but the location will almost always outweigh the finishes and countertops inside a home. The closer you are to the lifts, Main St, Silver Lake Village the more people will want to rent your home.
How to Make the Numbers Work - Our Park City market has dozens of good property management companies that will provide either Actual Rental Numbers from previous years or Rental Pro Formas that give you an estimate of what you can generate if you use their services. They provide these free of cost, and you can enter the estimates into your business plan to see if it makes sense for you. Don’t forget to include costs like Repair and Maintenance, Business License Fees, Marketing Fees, Snow Removal, Local and State Taxes, and anything else unlisted here that a professional management company will help you with.
Next - Buy your Park City Vacation Home. Congrats, you did it!
Rent It – Hiring a good property manager to offer full management services will keep you from getting the late-night calls on the holidays that nobody wants. Management rates vary from as low as 20% of your gross rent all the way up to 50% or more. You collect a check without any of the hassles. If you want to give it a go on your own - Sites like Airbnb and HomeAway/VRBO have made the Park City vacation rental process very easy. There can be some startup fees such as photography, listing costs, and bringing your home to code to secure your rental permit with the city. But again, a local property manager can help you with all of the above and is advised! Ask them if they cover any of these costs as their service to you, and see what else is included in their management. They should be taking inventory of all your personal property which may or may not have come with the home. Know which dates are the prime rental dates and try to resist the temptation of using your home during those dates if you care about rental returns.
Protect Yourself - Having a good rental agreement for your guests is important when you are renting to people who will be recreating in snowy, icy areas. Often homes in Park City have hot tubs and making sure your home is safe, up to local building code and you are properly insured is really important. Contact an insurance specialist to make sure you have the right coverage. Airbnb and VRBO sometimes offer personal property insurance, paid by the renters, to protect your belongings. But make sure your property is properly maintained and insured to give you and your guests the best piece of mind.
Enjoy Your Park City Vacation Rental When It’s Not Rented - This is the most important of them all!!!
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Whether you are looking to buy or sell Park City Real Estate, our team of Realtors is here to help. Over the past 5 years, we’ve sold over $500 million in property in Deer Valley, Empire Pass, Old Town Park City, the Canyons, Hideout, Tuhaye, and all surrounding areas. We strive to be the best realtor in Park City and no job is too big or too small. Deer Valley homes, Park City condos, Empire Pass ski-in ski-out properties, Hideout lots and New Construction is all in our wheelhouse so please don’t hesitate with the simplest of questions. We look forward to hearing from you so please reach out with your questions! Matthew Magnotta ([email protected]) Lindsey Holmes ([email protected]) Brad Erickson ([email protected])