You love skiing in Telluride Ski Resort and are now thinking of investing in a property here. Is it worth it?
Combining your passion and fantastic business opportunities is any investor’s dream come true. However, before looking at homes for sale in Mountain Village, CO to find an investment property, it’s best to do your research and due diligence first.
Here are four of the most important things to consider when investing in a ski resort.
- The location
- Right infrastructures
- Sufficient and consistent amount of snowfall
- A high but accessible altitude
- Lifestyle attractions
- The type of property
- Profitability
- Financing
For a successful venture, choosing the right location is key. Skiing aficionados have several options around the world for a winter destination. The most preferred locations are those with the following features:
Telluride not only passes these tests; it also offers so much more. Voted the best ski resort in the world several times over, the town is loved by the most discriminating vacationers. With a top elevation of 13,150 feet, average snowfall of 330 inches per year, and more than 2,000 acres of skiable area, Telluride is perfect for a skiing holiday.
It’s also a hot draw in the summer, thanks to the acclaimed film and music festivals staged here, as well as a plethora of warm weather activities like hiking, fishing, and golfing.
Telluride boasts sophisticated and luxurious infrastructures, including hotels, lounges, restaurants, and a one-of-a-kind transportation system – a free gondola service that takes passengers to and from Mountain Village where the ski resort is found.
With its rather isolated location, Telluride is not as crowded as other Colorado ski towns like Vail and Aspen, but to many, this only makes the town even more exceptional.
The best ski resorts offer a wide range of properties to choose from. You’ll find rustic chalets, mountain estates, luxurious condos, townhomes, ranches, and others.
In Telluride, you’ll find all these and more. You have the option of alpine ski homes, golf homes, horse properties, and riverfront homes. You can also choose between a property in the downtown area or one closer to the ski slopes.
Choosing the right property rests on your investment goals and personal preferences. Your budget naturally plays a large part in your decision. You should also assess a property’s profit potential, taking into consideration the expenses of maintaining and managing it.
If you plan to use the property yourself, consider your lifestyle preferences as well. Determine how often you plan to use the home and rent it out, as this can have an effect on your taxes and income. Additionally, if the home is covered by a homeowners’ association, find out first if renting out the property, whether on a long term or short term basis, is allowed.
Before investing in any property, you should do thorough research on its profit potential. Consult your real estate agent or an investment expert to help you with the numbers.
You’ll need to calculate a property’s potential Return on Investment, using such figures as Cap Rate, Cash on Cash Return, and Cash Flow. In addition to rental income, consider the profit you might make through the asset’s value appreciation in the short and long term. If you decide to sell it five years down the road, for example, find out how much the property would have likely grown in value by that time.
Your investment consultant might also recommend the type of business structure that will give you the highest profits and protection from liability, such as an S corporation or LLC. The expert may also suggest ways on how to improve the profit potential of a property, including doing improvements and renovations, repositioning, and other options.
Do you plan to pay for the property in cash or with a mortgage? Whichever option you select, you need to be prepared with the documents that will prove your ability to pay. These include bank statements, proof of assets, W-2, and others. Even if you’re paying in cash, the seller will most likely want to see proof that you have the funds to cover the price of the property.
If you’re getting a loan, keep in mind that the lender will do a thorough review of your finances. You’ll need a good credit score and should be prepared to shell out a down payment of around 20%.
The type of property you buy can also affect your mortgage terms and conditions. Multifamily and commercial properties may cost more than standard single-family homes or single condo units, but they’re looked upon more favorably by lenders because they often come with a better safety net.
Looking into investing in a Telluride Ski Resort property?
With over six decades of combined experience, we at the TD Smith team have the expertise to help you find the right property and to guide you in making important decisions. Check out more home buying tipshere, and give us a call today at +1 970.729.1577 or email us at td@tdsmith.com.