Tips On Running A Rental And Finding Financing.

A modest one-bedroom apartment in your ski house can easily be rented. Credit: Steve Bell

Once you have reservations coming in, you have to manage the flow of people coming and going. Here are a few ideas we have found useful in making it easy and efficient for everyone.

We could easily hire a cleaning service, but we do the cleaning ourselves to earn money in addition to the nightly price.  Both websites we use for booking rentals, and, provide the opportunity to charge guests a cleaning fee. The high fee we set does not seem to discourage demand.  We find that we do not want to ski every single day, so we don’t mind spending an occasional morning as cleaners (who wear very good safety equipment).

If, during the COVID era, the thought of cleaning an apartment makes you queasy, hire a professional cleaning company.   They have experience in keeping their workers safe, and towns around ski resorts have a number of cleaning vendors.  The cleaning fee that we charge would be more than sufficient to cover the expense. 

Our overall feeling about visitors is extremely positive.  They have proven themselves to be consistently neat, quiet, friendly, considerate, enthusiastic, and polite.  We know that a less-than-wonderful encounter is one day inevitable, but we are confident that the memory of many fine guests will help us to forbear with grace.  And guests help us to improve our apartment, because we ask for recommendations, which they constructively provide.

We have strict rules.  No pets, no children, no smoking, no wild parties, no candles.  We hope to keep everything clean, simple, and safe.  There are facilities for all these alternatives at other venues at the resort.  In the beginning, we were concerned that all these prohibitions would suppress demand, but we are filling our unit with happy guests.

Here’s a creative idea that is not for all, but might be perfect for some.  We have found that the months of high demand are end-of-December, January, February, March, June, July, August, and September.  During some or all of the months of high demand, you can move to the apartment and rent out the (larger) home.  The larger the space, the greater the rental revenue.  You can implement methods to streamline the switch-over.  For example, you can have a lock installed on your largest closet, and use it to conveniently store all the possessions in your house that you choose to keep private, when you are living in the apartment.  Remember, you crafted your apartment to be a nice place to live.  Why not enjoy it yourselves for a while?  My wife and I are considering this switch for some of the summer months because summer life does not require winter gear such as layers of clothes and ski equipment.  And we are outside hiking and biking a lot anyway.   So a smaller home base should not present a problem.

Financing Advice

 Financing the property could be the most difficult issue for some people.  An unfortunate aspect of buying a house with a rental unit is that most mortgage lenders will not allow prospective revenue from a rental unit to be used as income on a mortgage application. You can try to find a mortgage lender who would consider that revenue.  My guess is that a bank that knows the local market well, a bank in the municipality in which you intend to buy, would be most sympathetic to such a request.

At the time of purchase, my wife was retired, and I was close to retirement, so financing was fairly straight-forward. We had both saved for retirement, mostly in the form of  401Ks.  We applied for the maximum mortgage that we could afford, intending to finance the remainder of the purchase price with a down payment from our savings.  But in order to maximize our mortgage size, we took steps to increase our income. 

First, we both applied for social security.  Second, I had a small pension that I elected to take early.  In both cases, the trade off for the early payout start is a modest reduction in the monthly benefit. Third, instead of retiring, I worked part-time for one more year in Big Sky.  This also boosted my income and thereby our mortgage size.  

In the first few years of ownership, you might want to work full-time, part-time, or seasonally to firm up your financial position. We have learned that people who live in resorts are very resourceful.  They can find the perfect part-time employment that keeps them happy and that pays bills.  Or they can start a business that suits their immediate needs and that they can later sell. 

My wife and I feel that we have lucked into a happy place.  We have a small business that is fun to manage and that helps pay the bills.  And we live in a beautiful and enormous natural playground.

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