Ski Property: Buy or Rent?

Many people enjoy taking holidays and organising family getaways at their favorite ski resort or area. But instead of paying rent any time you visit, it would be wise to consider buying a ski property in that particular area. There are a lot of things to evaluate and double check when determining if renting is a better option than buying – and vice versa. These could include your status, your personality, cost of maintaining the property, snow reliability and other general factors.

Expenses

  • Renting – Evaluate the cost of renting a home in a ski resort – for the amount of time you would ideally like to go for. Generally, the price rate depends mainly on the location, size and other qualities of the accommodation. The time of the year you visit and the popularity of the resort also determine how much you spend on rental(s).

If you want to rent a luxurious condominium (also known as a condo) at the slope side of a popular ski resort during the winter holidays, for example, it will cost you a lot. But an older rental home located in the outskirts of town won’t cost you so much – especially in the off-season when there aren’t many people holidaying at the same time.

The duration you spend at the resort also adds to your cost. Therefore, you have to honestly access how long you are likely to be there anytime you visit annually. Also put inflation rates into consideration because costs keep rising. Not all homes in resorts have kitchens and other do-it-yourself equipment, so you may want to factor in eating out too.

  • Owning – This isn’t as easy as calculating rent because you need to determine the cost of tax and amount of mortgage interest to be paid- as well as other added expenses. The value of properties appreciate overtime, so that has to be considered as well.

If you have enough money saved up to purchase the property outright, the mortgage costs will be irrelevant. However, the cost of buying a home in a resort area is generally steep, and many people can’t afford to do so without a mortgage or additional financing. Mortgage lenders normally charge higher rates for ski properties because they consider a resort home as an “investment property” and not your primary residence; it’s therefore a more risky lending proposition for them, as people will always pay for the roof over their heads on a day to day basis before they pay their investments.

Furthermore, the mortgage interest for a second home is usually not allowed as a deduction on income tax. That means if you rent your ski property out for instance, or the down payment for the ski property was equity from your primary home – your mortgage interest tax deduction might be limited.

There is the potential for appreciation or loss to the property’s value. That’s why it’s always best to consult real estate experts like www.skiingproperty.com to understand the local market.

Consider the cost of hiring an on-site caretaker, paying utility bills, maintenance expenses, and even other dues like ground rent that come with buying a home in a planned or developed area (which is where most resorts are actually located).

If you are going to rent out your property when not there yourself this could offset the costs and swing the decision a long way in favour of buying rather than renting.

Other Non-financial Factors to Consider

Your favorite condo won’t always be available every time you want to visit a particular resort, and alternative homes may not give you the same thrill and excitement. But when you buy your own property, you can furnish it to your taste and style – knowing nothing will change anytime you visit. You have a home away from home.

Think about the kind of person you are. If you are a person who loves to explore new, will you want to visit the same place over and over again? Obviously, you can sell the property if you feel it is time for a change, but that may not be a speedy process. If you buy in a great location and love the slopes then it can be life-changing to have accommodation sorted for whenever you want to just up and hit the powder.

Double check snow reliability in choice areas. Austria for example, is reported to have a 300-metre snowline rise by 2050. The Switzerland Association of Winter sports resort reported that since 1995, their annual winter has been shortened by 12 days. Altitude plays a major role in ski resorts, and locations above 1,500 metres are the best options for consistent skiing.

Owning a ski property may be just what you need to add a whole new dimension to your life. Weigh up the pros and cons and go for it if it makes sense.

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