From mountain contemporary residences to log homes with gorgeous mountain views to luxury apartments at ski-in/ski-out resorts, the small town of Mountain Village offers a breadth of opportunities for investors in the area. If you’re looking for a laidback and friendly mountain atmosphere, this small southwestern Colorado town is it.
Today, Mountain Village is a popular destination for skiers searching for a quiet mountain atmosphere. Sitting at an elevation of 9,545 feet, the town boasts access to over 2,000 acres of ski terrain. But it wasn’t always this way.
Once a remote sheep ranch up in the San Juan Mountains, Mountain Village came into its resort town status at the turn of the 1970s. At that time, an entrepreneur from Beverly Hills, Joe Zoline, bought ranch in the area and enlisted the help of Emile Allais, a champion French skier. Together, they developed plans for a ski resort. It was the perfect plan for an area that gets about 300 inches of snow every year.
Mountain Village’s evolution toward its current status as a ski resort town developed even further when Zoline’s resort changed hands. In 1978, the entrepreneur sold the resort to Colorado businessmen Ron Allred and Jim Wells. With their sights set on gaining world-class status, business partners Allred and Wells built a town center for Mountain Village. The center’s European-style architecture recalled the small communities along the Alps. And its Old World charm drew more visitors to the town.
As time passed, this small town above Telluride settled into what it is known today: a mountainside community of just under 2,000 residents treated to numerous skiing trails, bike park, hiking trails, a golf course, and beautiful vistas of the San Juan Mountains. Investing in a ski property here translates to plenty of mountain fun in winter or summer.
Things to consider when investing in ski properties
Buying a ski property is slightly more complex than buying a normal single-family home. But many of the factors you would focus on when buying a regular home also apply to ski properties.
Here are several aspects you should spend time thinking about to make the most of your investment.
What do you intend to do with the property? Answering this in clear terms will give you a strong sense of what you want out of your investment.
If you want a second home, the next steps are to consider:
- Which amenities do you want to see on the property?
- What kind of neighborhood do you want to live in?
If your plan includes renting out the property in the future, give these additional questions more thought:
- Will you rent on a short- or long-term basis?
- What specific rules and regulations do you have to comply with?
- Can the property be listed on the rental market?
- How often do you want access to the property?
As luxury properties, ski homes deliver enviable amenities, views, and comfort. In exchange for this upscale lifestyle, these homes involve more financial and structural investment than usual. As you look at properties to invest in, build a clear picture of your finances. Calculate how much property you can afford to define the scale of your investment.
Remember: the sale price is only one expense of many. Property taxes, due diligence, maintenance, and legal fees are several costs you will cover once you close on a property.
A ski property’s value is tied to its location and available amenities, both of which affect the property’s potential for appreciation. Each time you look at a property, evaluate the features it comes with.
First-class ski properties provide the perfect environment for the winter season with amenities like:
- Ski-in/ski-out access
- Ski rooms
- Aprѐs ski bars
- Wine cellars
- Cozy spas
- Heated driveways
Luxury properties also possess appeal that is linked to their surroundings. Breathtaking views are an advantageous asset to look for when viewing ski properties. Take the time to check what’s in the property’s immediate vicinity.
If you’re choosing properties with land, find out how far away your neighbors are and how far away the rest of Mountain Village is. For condo properties, it pays to look into the community’s feel as well as how the buildings are managed. And since condos are typically located in the center of town, a property that’s just a few minutes away from the Village Core or the gondola to Telluride makes for a strategic and profitable investment.
Resort towns like Mountain Village have slow months where visitors are few and activity in the area lulls. These off-season months are some of the best times to invest in a ski property. Property prices tend to be more competitive, because their owners aren’t as preoccupied with catering to visitors. Sellers are also more willing to negotiate when demand for their property dips.
Summer is a particularly active season for purchasing ski properties. The popularity of summering in the mountains has exploded and exploring ski properties as a year-round lifestyle investment is very attractive.
Returns on investment
Some of the great advantages of investing in a ski property is the potential to generate passive income and watch your property climb in value. Ski properties lend themselves well to the rental market, because of the beauty and activities visitors can find in nature, come sun or snow.
Winter season in Mountain Village sees the highest number of visitors – to as many as 20,000 in some instances – eagerly securing accommodations to ensure a cozy holiday. Short-term rentals generate the most passive income during peak season. Developing your property for short-term rentals also allows you to enjoy the property yourself in between occupants.
Apart from the potential for passive income, a ski home also provides its owner with tax benefits. Many investment properties qualify for deductions on taxes, insurance, mortgage interest, repairs, and depreciation. These benefits can help you offset the cost of maintenance and other expenses.
The intangible returns of owning a ski home also can’t be discounted. They improve the quality of your life in ways that are tough to replicate with other properties. It’s not too hard to imagine a more active lifestyle, easy access to the outdoors, and aprѐs ski socializing when the mountains are in your backyard.
Future resale value
A ski property can also serve as an additional tool for building equity. As time passes, the value of a property as premium and finite as a ski home increases. Diligent maintenance secures this future appreciation significantly, and improvements made to the property only bolster this potential.
Therefore, deciding to purchase a ski property involves thinking about its future. Even if you don’t plan on going into the rental market, explore the property’s potential or readiness for such a transition. The property’s future buyers might desire to go this route and will be willing to pay a premium on any improvements you have made to ease the transition.
Tips for buying a ski property
Whether you’re looking for a vacation home or your next investment platform, buying a ski property in Mountain Village is a big step that needs serious planning and informed execution.
Read our tips below to find out where to put your focus before, during, and after you look at different properties.
The dos of buying ski property
- DO choose your location wisely
Even though Mountain Village is a small community, the golden rule of real estate (location) still applies.
Are you looking for a ski home that’s a convenient distance from everything in town? Then a property right in the town center is your best option. Alternatively, if you want to purchase a property that lets you hit the slopes around Mountain Village as quickly as you can, look for properties that boast ski-in/ski-out amenities.
- DO start your financing early
Ski properties are luxury properties, and their premium prices reflect this well. Because of the large capital involved, many ski property investors finance their purchase with cash or jumbo loans at today’s low, prevailing interest rates.
By planning your financing early, you give yourself time to get a good look at the state of your funds and to decide which route to take. The advantage of cash is evident. You don’t have to worry about getting approved for a mortgage. You can also close on a property faster, so you can enjoy your new home sooner or get it ready for your business venture in good time. There is one big drawback: a cash purchase requires you to use up a substantial amount of savings. This might not always work with your plans and living requirements.
For cases where a cash purchase is too prohibitive, jumbo loan financing offers a suitable alternative. In exchange for a significant down payment and added scrutiny into your finances, a mortgage lender can approve a mortgage for your purchase. A jumbo loan’s main advantage is that it gives you more time to pay off the property and is less likely to deplete your reserves. Getting an early start is even more crucial for jumbo loans. The approval process is longer than a regular loan’s and requires more paperwork to prove to the lender that you’re worth the risk.
Starting early also allows you to scout for local lenders who are already familiar with financing Mountain Village ski properties.
- DO work with local real estate professionals
Ski properties are special, and buying one is not the same as buying a regular single-family home. A local real estate agent with a background in ski properties will know which properties are promising (and which aren’t). They can also give more context and history about a specific neighborhood or property.
Having a local agent on the ground is also valuable for remote buyers and investors. They can serve as your proxy if you can’t come up to the mountain to look at properties yourself. And thanks to their expertise, local agents can guide you to properties that meet your criteria – whether that’s a vacation home, a rental, or a property that flexes between those two options.
- DO gather information about the area’s year-round activities
Mountain Village is well known as a ski resort town, but skiing isn’t the only activity the small town offers. During the winter season, residents and visitors also have the option to venture on snowshoeing trails, stroll around the charming town center, or take a pair of ice skates down to the Village Pond and the Village Ice Rink.
Even when the snow clears and temperatures increase, there’s plenty to do in town.
- At Adventure Rock in the town center, both beginner and expert climbers can try their hand at bouldering at no cost but time and effort.
- Farther out in once snow-covered trails, mountain bikers and hikers can enjoy nature and challenge themselves on the many trails.
- Other summer activities in and around Mountain Village include a round of golf at Telluride Golf Club, a fishing trip to Elk Lake, and a game of paddle tennis at The Peaks Resort and Spa.
- DO tour the property
Before the pandemic, this meant driving or flying in from where you are to see the property in person. Because of travel restrictions and COVID-19 safety guidelines, touring a property online from the safety of your home has become more common. Real estate investors and sellers have adapted to the demand and now offer 360-degree and video tours that do a good job at approximating the experience of being there yourself.
In short, if you have the option to see the property for yourself, take the right precautions and go through with it. But if you can’t, work closely with your local real estate agent. They can stand in as your trusted eyes, nose, and ears.
The don’ts of buying ski property
- DON’T make light of maintenance
A ski property demands more maintenance than a regular single-family home. Being located in a snowy region amplifies this demand and makes winterizing as important as constant maintenance. Snowstorms are, after all, a common winter occurrence in Mountain Village.
Maintenance becomes more crucial if you’re only visiting the property for a few months at a time. You won’t get to monitor the property’s condition as closely, which can lead to missed maintenance schedules and expensive repairs down the line. If this sounds like a probable scenario in your case, consider hiring a property manager to keep an eye on your property while you’re away.
- DON’T expect that you can rent out from the get-go
If you have plans to rent your ski property (even for the short term), you will have to file paperwork and pay taxes. In Mountain Village, property owners have to obtain a business license and pay an 8.65% sales tax and a 4% lodging tax to enter the rental market. The same rules apply whether you own a condo, a lodging unit, or a single-family home.
- DON’T underestimate the time and effort that goes into running a vacation rental.
Decided on putting your ski property up for rent? Prepare to hire a property manager or dedicate time to learning how to be a landlord. It takes a lot of work, but it can be rewarding if you enjoy actively managing your properties.
Landlords have to deal with multiple things, so you will likely need to consult with an attorney and an accountant to get the best results. Here’s a quick overview of what you have to address as a landlord:
- Marketing and maintaining your property
- Finding and keeping tenants
- Carrying out background checks
- Making improvements to the property
- Managing the books
- Processing legal documents
- Setting the right rent price
- Dealing with tenant concerns
If the list above looks like it’s too much to handle, working with a property manager may be best for you. For a set commission, a property manager can bring in their own team, assume the bulk of your responsibilities as a landlord, and keep you updated with a periodic property report card.
Discover your Mountain Village ski property
Nestled in the San Juan Mountains, Mountain Village offers a variety of investment opportunities that benefit the town’s skiable slopes, European charm, and intimate atmosphere. Investing in a ski property here can be a seamless experience when undertaken with the assistance from local real estate professionals.
Our team at T.D. Smith has a combined experience that spans more than four decades of local knowledge. Use our expertise to find the ideal mountain property for you. We advise our clients on the best way forward, guiding them through due diligence and the negotiation of the most favorable prices. Call the team at T.D. Smith today at 970.729.1577 or send an email at td(at)tdsmith(dotted)com. You can also contact us here.