It used to be that if you set out to buy a ski house, you would have had to choose between either a place you could use almost every weekend or a place you could rent out most of the season.
Today, you can have your ski house and rent it too.
Because of the energy crisis and inflation, skiers are staying closer to home--even those on vacation for a week or longer. Ski areas close to Washington, such as Wintergreen in Virginia, Snowshoe in West Virginia and Camelback in Pennsylvania, are no longer just places to ski when you can't get to Aspen, Stowe or Sun Valley. They are today's destination resorts, and chalets rent well throughout the skiing season.
In addition, some ski resorts in the Washington region are designed asyear-around recreation communities. Among them are Wintergreen, Massanutten and Bryce's Mountain in Virginia, the newly revamped Hidden Valley in Pennsylvania, and Snowshoe.
Part of the change is a response to the marketing efforts of the ski area, part is the development of more sophisticated snowmaking that guarantees more good skiing more days and part is new mid-week programs designed to attract vacationing skiers.
Innovative marketing includes efforts such as those at Hidden Valley's conference center. At this ski area in Somerset, Pa., Washington-area developer Clarence Kettler pursuaded his son and his nephew--owners of the Kettler Forlines development company--to build efficiency and one-bedroom condominiums to rent as hotel rooms. Buyers agree to let Hidden Valley rent out their units, using them personally only during off-season. Kettler, who has a vacation house there, said that $12,000 down on a $50,000 unit can put money into the investor's pocket even after expenses, in addition to appreciation.
This trend toward skiing close to home is good news for middle-income ski house investors. For the price of a down payment, a skier can buy a house to be used many weekends and rented the rest of the time to cover the mortgage payments. Owners willing to forego staying at their houses during the busy (and profitable) Christmas season can even turn a profit.
This scenario is repeated regularly, according to Curt Schurm, president of C-A-S Enterprises, Inc, in Hunter, N.Y. Hunter, site of the Hunter Mountain Ski Bowl, is a ski-house owner's dream this year, Schurm contends. Despite the downturn in the national economy, Schurm says his business and his customers' profits are increasing.
"A fellow who bought a $30,000 house from me 15 years ago just sold it for $100,000," Schurm said. "He only put the $5,000 down payment in it; he made enough in rentals to pay all his costs. He made a $70,000 profit on that $5,000 investment."
Although today's buyer would have to ante up $30,000 cash, Schurm believes that the profits are coming faster as Hunter benefits from the ski-close-to-home trend. "Winter occupancy approaches 100 percent on anything good," Schurm said.
Good houses are coming on the market all the time, but not because of the economy. Changes in life style, such as divorce or children growing up and moving away, have prompted most ski house sales that Schurm handles.
At Wintergreen resort, about 40 miles west of Charlottesville, broker Peter Farley reports that life-style changes often mean sales, but many of those who are selling one property are buying another--either larger or smaller, depending on the family. He said that he has seen instances in which a family has purchased a lot, then a condominium, then sold the condominium and built on their lot as their attachment to the area and the size of their family grew.
Resale houses are sold almost as fast as they are put on the market, he said. "People are making money on the resale, not the rentals. They come out of pocket to meet expenses on the rentals, but there is tremendous appreciation in sales at Wintergreen," he said.
Even new units are selling well at Wintergreen, the broker said, because Washington has a high turnover of people who want to purchase recreation property. Wintergreen has just put on the market its most expensive condominiums, ranging from $125,000 to $220,000 a unit. Although these condominiums will not be completed until next year, half of them are already sold, Farley said.
The profile of the ski-house buyer in general is also changing rapidly. A decade ago typical buyers were couples with several children. Today, single people and childless couples buy ski houses often before they buy a home.
Sometimes a shareholder in a group house will buy a ski house and rent it back to the group to be shared out--with a shareholder and not an absentee landlord taking the profits.
The best ski-house buy is an older house, Schurm said. A new house costs at least $50 a square foot; a good used house sells for $30 to $40 a square foot, and usually comes fully furnished (down to the abandoned skis in the closet under the stairs). Financing is often better for older houses; owners often are able to take back creative mortgages.
But like other real estate investments, ski-house purchases can be risky. A buyer must consider not only the usual issues of house purchase, but also the special rental considerations. Schurm advises prospective buyers to look at whether the house is:
* Attractive as a vacation rental. Good furniture, a fireplace, a sauna or a hot tub, a dishwasher and a washer and dryer may not increase the rental costs a great deal, but they increase the occupancy rate tremendously.
* Within walking distance of the ski area. This, too, makes it attractive to renters.
* Located between the nearest big city and the ski area.Renters are less likely to choose a place beyond the ski area, even if the price is lower.
* Served by roads that are well maintained in bad weather.
* Near services such as grocery and liquor stores and restaurants and bars that are open during the week--not just on weekends--to accommodate vacationing skiers.
* In a ski area that is doing all it can to promote ski weeks through marketing and special programming. There should also be well-established agents who can provide the services and who have a large enough client base to keep your house rented for you.