Investment Property in Park City, Utah | The Investor's Guide

Posted by Derrik Carlson on Monday, February 1st, 2021 at 6:33pm

A Guide to Investing in Park City & Deer Valley Real Estate

Guide to Investing in Park City & Deer Valley Real EstateInvesting in Park City, Ut real estate is one of the oldest and most popular asset classes for the wealthy and wise. Most new investors in Park City have multiple properties in different areas of the United States or World and rent their properties on a short term basis with light personal use.  It is common for investors and developers in other areas of the united states to purchase properties here in Park City.

Below we will discuss the different types of real estate investments and you'll learn more about Park City real estate investing. 

The Best Short Term Rentals Areas in Park City

The search for Park City investment properties usually starts around Park City Mountain Resort (Old Town), Deer Valley Resort Area, and The Canyons Village.  A large portion of these areas allows for short term rentals, also known as nightly rentals, and the best chance for the highest return on investment via rental income.

There is a premium when purchasing and renting ski-in-ski-out properties and allows the investor to maximize profits of the peak ski season. Old Town also allows for property owners to get higher rents during the Sundance Film Festival. In my experience, many of the owners in Deer Valley do not rent their properties on a short term or long term basis but sometimes they may offset some of their costs of ownership by renting their property during the peak times of Christmas, New Year, and Presidents Day.

 

Park City Investment Realtor

Remodel of Investment Property in Deer ValleyInvestment properties in Park City, Utah aren't about cash flow.  The goal typical goal is to be able to use the property two to six weeks a year and have the nightly rentals cover the cost of ownership.  

I just closed on a property in Deer Valley that's a single-family residence.  It's one of the few single families that allow for nightly rentals but it was odd.  Odd enough for me to go back and check the entire last year's worth of sales.  In the past year, I realized I have closed on the lowest-priced single-family home in all of Deer Valley Ski Resort Area. The clients have great vision and will do a great remodel in an amazing location about two minutes from the base of DV.  

By pulling the stats for the past year, and I know that most brokers aren't excited about this but I am excited about helping clients get great deals on all types of properties.  I realized that now I have helped the lowest priced home buyer and lowest priced condo buyer, for a 3+ bedroom condo, in all of Deer Valley.  I'm posting a before and after of the kitchen of the condo in Upper Deer Valley.  

My real estate strategies work great for buying investment properties in All of Park City.  Every deal is different and sometimes it's about getting the best deal while others it's about getting the deal on a property.  

This is a challenging real estate market with plenty of agents trying to compete for your business.  I don't care if it's on an entry-level property or a luxury property, the agent and advice one offers is important.  It can be the difference between saving thousands of dollars or in a hot real estate market, it could mean getting the deal or not.  I try to advise my clients as I would my own family member but I also make sure that I have the best tools and resources. 

If you don't like the property we move on but if you like the property I have all the resources to remove any excuse for not buying.  We can come in aggressive on the price, I have a great contractor and designer I work with that will make it easy for you, I've personally used them so I know how giving a few Pinterest photos will help,  the best property management companies in town work with me.  

My goal is to make you feel comfortable and know you will be in the best hands possible when buying or selling real estate in Park City, Utah. 

 

Do Park City Investment Properties Cash Flow? 

The truth is, rental properties in Park City, Utah tend to be cash flow neutral if you pay cash. I generally tell people that if there is no financing involved for a nightly rental property you should cover the expenses at the end of the year.

The typical buyer is searching for real estate they can use two to six weeks of the year and have a full time property management company take care of the rest. Every year hundreds of buyers purchase properties in Park City that essentailly break even and over time the rental numbers increase as well as the appreciation.

Ski-in-ski-out properties at Park City Mountain, The Canyons, and Deer Valley tend to offer 120 to 150 peak days a year of peak days for the rental market. There are many factors that play into the rentability of a property in a resort town.  

 

Check out when the best time of year is to buy a condo in Park City!

 

The Different Types of Investment and Rental Properties in Deer Valley and Park City, Ut

Nightly Rental Property SearchThe Park City MLS allows for properties to be labeled seven different ways which can be seen below. The best way to search for properties is by using the IDX map search or neighborhood page. The map search allows you to select your price point, type of property, and many other features such as area or nightly rentals.

The general rule of thumb is the closer you are to the resorts the higher your gross rental revenue. The nightly rental number is only as accurate as the listing agent puts the information into the MLS - search all properties and if you have any questions feel free to reach out to me to discuss the options.

Homes: When investing in Park City homes, it should be noted that they may or may not allow for short-term rentals.  The location and proximity to the ski resort will play a large role in the property value and rental possibilities. 

Condos: Condos for sale can be found throughout Park City. The homeowner association fees tend to start around $350 per month and work their way up to over $50,000 per year. The HOA fees will be subtracted from your gross revenue so it is important to pay attention to the fees when you are considering purchasing a Park City condo. The HOA can also add value to the property by keeping the property in good condition and providing additional amenities, which makes it easier to rent.

Townhouse: Townhomes can stand alone in your real estate search but they are also pulled in within the condo search. Townhomes tend to be larger than condos and possibly live more like a single-family home.

Vacant Land: If you are considering purchasing land for sale in Park City you will be looking for appreciation. This speculative play may reap large rewards but you will not have rental income during your time of ownership. There is also a possibility that the land has HOA fees, typically lower than a property with a home on it, but HOA fees are worth taking into consideration.

Commercial: Commerical real estate in Park City tends to be office buildings. In Park City, commercial real estate is marketed much like our luxury properties and many of the properties for sale will be on the Park City MLS and this website. I strickly work residential real estate but work with several commercial real estate agents that can help provide the real estate expertise that you're looking for when buying commercial property.

Fractional: Fractional ownership is structured much like a timeshare but you actually own the property and not a piece of paper. While there are some investors that prefer fractional ownership I personally tend to shy away from the property type because of their lack of liquidity and weak appreciation. I'd rather have full ownership of a smaller condo and more control over when I'm able to rent or use the property.

Multi-Unit: This is a new property type in the Park City MLS and our area doesn't provide many multi-family or multi-unit properties. There are several multi-unit properties that sell each year.

 

Managing your Park City Rental

Most of the buyers looking for rental properties in Park City are interested in short-term rentals.  Local property management companies tend to be 25% to 50% of the gross rental income.  I tend to shy away from the higher-priced property managers because there are some great companies that charge less which will improve your bottom line.  Most of my clients pay 25% for full service and completely hands-off in terms of management.  We sell assets, not liabilities.  

 5 Ways to Value Investment Properties in Park City, Utah

Items to Consider when Buying Park City Investment Properties

Old Town Park City Vacation RentalsMuch of my business is from second homeowners and investors. Park City investors are looking for a turn-key vacation rental where they can own it from another state and not worry about issues that may arise. When you work with me you'll have all the tools you need for an easy remodel, designers, property management, and a full overview of the Park City real estate market.

Derrik Carlson has personally owned, managed, and raised financing for many of his own investment properties. This information is reliable but it is not, in any way shape, or form, investment advice.

Originally by Derrik Carlson on Sunday, March 29th, 2020 at 1:28 am.  Updated on 2/1/2021

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