If you’ve decided to purchase a second home in Breckenridge, Colorado or anywhere in Summit County, Colorado, chances are you previously visited and fell in love with not only the beauty the area offers, but the lifestyle, the people, and the magical vibe. Likely you rented a vacation property in Breckenridge that belongs to someone else and decided that you too would like to have one a property like it for yourself and your own family. Some new homeowners know before they even begin the search process that they want to place their new second home on the rental market, while others may be unsure. It can be scary opening up your home to strangers! We hope to help you make an informed decision with a bit more information about renting out your second home in Breckenridge.
There are several options for renting your property: Short term or long term rental. Self management or management by a local professional vacation rental agency or property management company.
Short Term Versus Long Term Rentals
Short-term rentals bring the opportunity for additional revenue to offset the expenses of owning your second home, especially during the peak periods of Christmas/New Year, Spring Break, 4th of July, etc. The revenue generated will depend on the location of the home, how many people the home can accommodate (while staying within town and county guidelines), and the home’s amenities and interior décor. In addition to this revenue, there is the added benefit of having a body in your home to avoid vacant-home pitfalls such as water leaks that go unnoticed, vandalism, and pest infestation just to name a few. Despite the extra wear and tear that renting might create, a worn sofa is better than flooding from a busted pipe that was not tended to right away. Regular guests in your home means that appliances are used more often. Dishwashers, for example, should be run on a regular basis to prevent the seals from drying and cracking. While the revenue can be great with short term rentals, it is also unpredictable due to season, the weather, the economy, and market competition.
Long term rental occupancy produces a steady revenue that is almost always at 100% because we have many seasonal employees who need housing and because there is a huge demand for summer rentals by residents of the southern United States who want to escape the heat in their area. While you will not be able to use your property during the occupancy of long term renters, you can decide how long their lease will be to accommodate your own usage. Maybe you only want to visit your second home during ski season and make your property available for a 6-month lease April to November, or even a 3-month lease June to August- it’s your decision. Some benefits of long-term rentals are that you are not required to collect and remit tax for guests who stay more than 30 days, advertising costs are minimal because the demand is so high, and you won’t have the hassle and expense of cleanings and inspections in between guests.
Self Management Versus a Vacation Rental Agency or Property Manager
Most homeowners who choose to self manage do so in order to avoid paying commission to an agency or management company. If your permanent residence is only a few hours away and you plan to visit your Summit County second home, managing the home yourself might seem like the best choice. Keep in mind, you will have to available by telephone to your guests 24/7 which is not only in everyone’s best interest, but also to be in compliance with town and county rental regulations. While you will not have to pay a commission to a vacation rental agency if you self manage, you will likely have lower profits without the expertise a local agency can provide. You will also be responsible for ensuring the home is cleaned and inspected in between guests and have good working relationships with a variety of local vendors for maintenance, both of which can be difficult if you do not live in town.
Despite the cost, there are many benefits of having a property manager. A reputable and shrewd management company will increase your revenue with their existing database of return guests, knowledge in market pricing and demand, and wider reach of advertising your property beyond Vrbo and Airbnb. The vacation rental company will visit your home on a regular basis to ensure the plumbing, heating system, and appliances are functioning properly. They will inspect your roof and windows in winter so you can avoid the damage of frozen or burst pipes. After each guest's departure, your home will be professionally cleaned and inspected by someone who is familiar with it to notice broken or missing items. The company will ensure doors and windows are locked. The best companies have long-term partnerships with cleaning and maintenance vendors who will come to their aid much more swiftly than to a stranger who lives out of town.
There are hundreds of vacation rental and property management companies in Summit County. While you will find that some of the national companies might have lower commissions, it is strongly recommended that you go with a locally-owned and operated company. You will be short changing yourself and your guests when using a company whose phone is answered by someone who does not even live in the county nor have local expertise and knowledge about our area vendors, current conditions, and community happenings.
When interviewing Breckenridge vacation rental companies, there are important questions you want to be sure to ask to determine which company can best meet your needs:
1. Ask the company for rental projections of your property's gross and net rental revenue in the first year and in subsequent years. Homes new to the rental market will have fewer rentals in the first year until they have established some solid reviews. Keep in mind these projections are educated estimates and that the most professional companies will not inflate their estimates.
2. Ask what the company will do for you and your home in a hands-on manner and what they will do to market your home to maximize the earning potential.
3. Ask what they will charge in commission for their services. You will find a range of commissions from 15% to 45% of the gross revenue generated.
4. Ask if there are any hidden costs which occur outside the commission, especially in cases where a commission is lower than 35%. Lower commission may result in homeowners being charged for credit card processing fees, the cost of guest supplies (paper towels, toilet paper, laundry detergent, shampoo, etc.), cost of repairs for guest-caused damage and loss, third-party listing fees, batteries and light bulbs, penalties for homeowner usage, etc.
5. Ask if someone from the company who is familiar with your home will personally walk through your home prior to each guest arriving and following each departure.
6. Ask to see a complete list of what you are expected to supply for your home. This list should include kitchen utensils, particular appliances, internet access, etc.
All of our agents at Breckenridge Associates Real Estate understand the importance of making the best decision when deciding to rent your home or choose a vacation rental or property management company. Ask us for a referral of local companies. We are always happy to help in every aspect of the transition to home ownership in Breckenridge and Summit County.