5 Signs It is Time to Sell Your Vacation Property
5 Signs It is Time to Sell Your Vacation Property
Breckenridge & Keystone
Here are five signs it’s time to consult a Realtor and get serious about selling your vacation property in Breckenridge and Keystone:
- Are there personal life changes, such as medical issues, new travel constraints or simply new adventures that you would rather pursue? Sometimes the reason to sell is as simple as we “don’t ski anymore, but now we love sailing!” Freeing up capital to pursue new passions is a common reason for selling a vacation property in exchange for a new dream. Changes in health can influence the need to sell and before it risks adding burden for others in your life. Whatever the motivation, your vacation property is too valuable of an asset to no longer enjoy it – and that can be a valid reason to sell.
- Have Homeowners Association costs, rules or amenities limited your ability to enjoy or to earn income from the property? Rules or amenities that were not important to you when you originally purchased may change in their importance to you as the years have gone by (i.e. owner pet policies, access to a pool for an expanding family or slope side conveniences to name a few). Some HOAs may disallow or otherwise make it difficult for DIY property management, especially if they have preferred provider programs that were not in your original budget. Unexpected HOA assessments can also create new challenges for owners trying to manage costs.
- Is it becoming too cumbersome and costly to maintain your vacation property? Absentee owners may find that as the years go by, it can become taxing trying to manage a vacation property from afar. Many former DIY owners eventually turn to property managers for support – it’s worth checking into these alternatives before deciding to sell. In fact, some DIY owners find renewed enjoyment during their personal stays once they offload responsibility and allow themselves to be treated like a guest again. However, sometimes third-party risks and costs are simply too high, and owners can already be worn down. If that sounds like you, it may be time to get serious about selling. Do it before another big-ticket problem comes up, because larger expenses incurred in future years (i.e. roof, windows, kitchen remodel, etc.) don’t always mean these costs will be recouped by the future sales price.
- Is income from your vacation property covering your expenses? Examine how lucrative short-term rental bookings have been, collect the income of your rentals on the books and project your anticipated rents. Review your current and projected costs and assess whether your capitalization rate is where you expect it to be and the direction it could be moving toward. If you have a loss, consider whether the depreciation and losses are still of any benefit to you for tax relief and check with your accountant. If the losses are not a benefit or the capitalization rate is simply too low to justify the burden, it may be time to get serious about selling.
- Is the market favorable for sellers? When it comes to knowing your bottom-line, some markets can be good for some sellers, yet it may not be ideal for others. For example, some owners may feel that the increasing regulatory scrutiny of short-term rentals has encouraged more owners to hold even tighter to their vacation properties; whereas, other owners may feel that the market has become too speculative to count on short-term rental income and that this could be damaging for their property’s future resale potential.
Consult a Realtor for a comparative market analysis that shows you a rationalized price recommendation based on a current and in-person walkthrough experience. Inquire about the latest absorption rate to help you understand overall market conditions for properties like yours (i.e. over 20% may signal a strong seller’s market while anything less, may signal more of a buyer’s market).
Compare recommended market pricing with your property costs, price paid, debts and overall enjoyment of your vacation property. Consider your tax implications and tax opportunities (i.e. 1031 Exchange, losses that offset gains, tax withholdings due to seller residency status, etc.) in the same calendar year as you assess your net position. Lastly, identify whether it’s a good time to sell based on your own bottom line and future goals, because properties marketed and priced right for their condition should sell in most market conditions.
Taryn is a skilled vacation property real estate expert serving Breckenridge and Keystone and the surrounding mountain community. After many years of living in Breckenridge, she has intimate knowledge of these resort area destination features and she knows how to market the value of amenity-rich vacation properties. If you are thinking about selling your vacation property, contact Taryn for a complimentary market analysis today!
Are you considering selling or buying mountain real estate? Taryn is a nationally certified Pricing Strategy Advisor (PSA) by the National Association of Realtors. Taryn is a second-generation Realtor with experience in ski resort real estate and mountain cabins. Contact Taryn Brooke by phone at 970.333.8297 or by email at firstname.lastname@example.org.