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Buying a Property in a Winter Sports Resort

Maximising rental returns

The number of weeks per year for which a property can be let is the key factor in achieving good rental returns. In the case of a resort that only offers winter sports, with a limited range of summer activities, the letting season is usually relatively short, though it may well be lucrative. Remember that if you want to use it yourself during peak season, your rental income will plummet.

Bear in mind also, if you plan to finance your purchase through a mortgage, that some lenders do not take projected rental income into account when deciding how much you can borrow. And don’t forget that it usually takes at least a couple of seasons to build up business.

Choosing a property in a location that has good travel links with all parts of the UK, not just where you live, will maximise rental potential, as will analysing what sort of tenant is suitable for your property and marketing it accordingly. Are you aiming at families, older couples, or footloose-and-fancy-free young people in search of lively nightlife? The answer will have a huge influence on the type of property you buy, and where you buy it – always assuming, of course, that you are not viewing the property primarily as a second home for yourself.

Guaranteed rental schemes

Some resorts now offer guaranteed rental schemes, under which the purchaser of a new-build property authorises the developer or management company to let his property on his behalf for a fixed period (generally the first two years of the property’s life), in return for an agreed percentage of the rent. Though the rates offered are often on the low side, such an arrangement can benefit the buyer, as it not only guarantees him a certain level of return but also saves him the trouble of letting and managing the property himself in the short term.

Variations on this theme include the rental pools run by some resorts, which enable owners to use their properties for an agreed number of weeks per year and the developer or management company to let them for the rest of the time. The rental income from each property is placed in a central fund that is divided between the owners and the resort. The owners’ percentage is split between the different owners according to certain criteria (usually size of property, amenities and location), so that even those whose properties haven’t been used in a particular week are still entitled to a share.

This guaranteed level of income can be helpful with budgeting, but bear in mind that you will probably be required to choose your weeks well in advance, so you won’t be able to take spontaneous holidays.

All-season resorts

To maximise both your own enjoyment of your property and potential rental returns, you may want to consider purchasing in one of the increasing number of resort developments described as all-season, where, in addition to a range of skiing and winter sports facilities (often wider than those provided in traditional resorts), activities such as golf, tennis, swimming, fishing, riding, water sports and mountain biking, among others, are offered. Such add-ons as luxury spa and health facilities add to year-round appeal.

This may sound ideal, but remember, it’s hard for any resort to be entirely four-season. During a thaw, for example, you can’t ski or play golf. At some times of year, it will be too cold for golf, but there won’t yet be snow.

Do your homework. Visit at different seasons, to see how busy the resort really is, and ask the developer to show you occupancy figures from similar developments.

© Copyright Buy Associates Limited 2006

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Page 1: Introduction
Page 2: Eastern Europe
Page 3: Maximising rental returns

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