While many Americans choose to buy a home in Breckenridge for skiing and other fun outdoor activities, there's also a financial incentive. The potential short- and long-term gains to be made from purchasing an investment property in Breckenridge are substantial. It's widely known that the entire Summit County area is a popular vacation destination in both the winter and summer, which means there's plenty of demand for vacation rental homes. So if you know how to take advantage of the rental market, so your second property in Breckenridge will be a wise investment.
However, renting out a home isn't the only way you can make money from it. Here are some other benefits of buying an investment property in Breckenridge.
Long-Term Property Appreciation
Because the Breckenridge area has been consistently attracting visitors for ski holidays and summer getaways for decades, property values have steadily risen over the years. Combine this with the spectacular landscape that surrounds the town and the reasonable distance to Denver—it usually takes between 90 minutes and 2 hours by car—and there is no reason to think this steady property appreciation won't continue.
Less Risk in a Strong Rental Market
Buying an investment property can sometimes be stressful, depending on the demand for rentals in your location. However, if you know how to market your home, you most likely will never have to worry about it being empty outside of the brief shoulder season in Breckenridge. Vacancy rates in most Summit County towns are close to zero in peak ski season and they are very low during most other months as well.
If you're looking for advice on which type of home is the most sought after in the Breckenridge rental market, contact the experts at Colorado Mountain Retreats Realty.
More Rental Income
With such high demand for rentals, you also don't have to worry about being forced to lower your rate to an amount you're not comfortable with. Of course, how much cash flow you'll get from renting out your property depends on a variety of factors:
- Are you using a property management company or are you marketing the property yourself? You'll have to decide if the management fee is worth it to have someone else take care of the maintenance, rent collection, tenant communication, and marketing.
- Where is your home located in proximity to the mountain? Ski-in, ski-out properties usually fetch the highest rates, particularly for short-term rentals. In the summer time, golf course homes in Breckenridge can also be quite popular and lucrative to rent out.
- If you invest in a Breckenridge condo, what kind of amenities does your building have? If there are attractive building features such as a hot tub, you can certainly raise your rate.
More Short-Term Options
Both Airbnb and VRBO are very popular in Breckenridge for both renters and owners. These websites are ideal for the booming short-term vacation rental market in Summit County and owners are taking full advantage of them.
Naturally, there is an opportunity to earn significantly more income from these types of short-term tennants than those who pay monthly rates, although there is certainly extra work involved. Managing and marketing your property to those who rent for only a few days at a time is much more time consuming than handling a monthly rental or lease situation. Plus, Breckenridge Council recently passed a new set of short-term rental rules that require an owner or "responsible agent" to be available at all times to address complaints about those who are renting their properties.
This may cause more owners to use a property management company to handle these complaints, especially those who don't live near Summit County. That said, the financial gain from using the increasing number of short-term rental websites is still likely greater than monthly rentals, even with a property management company handling everything.
There are also opportunities to gain money—or to be more accurate, reduce your payments—from your investment property through tax deductions. For example, if you rent out your home for more than 14 days per month, you can deduct upkeep expenses and several other fees that are related to the rental activity.
Another tax advantage to income properties are that you can use what's known as a 1031 exchange to sell another property, then reinvest the earnings into a knew home, such as the Breckenridge investment property that you might be thinking of purchasing! While you should always consult a professional tax advisor before assuming any type of tax deductions, you now have a few options to ask him or her about when discussing potential savings on your investment property.
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