Breckenridge is the quintessential vacation town, a fact that’s evidenced by many things—the picked-over frozen pizza section of every grocery store during spring break, the omnipresent activity around Main Street, the higher prices on even the most local of restaurant menus, and the unique environment in which real estate is bought, sold, and leased in Summit County.
Vacation rentals have always had a place in this equation, but lately there’s been a huge shift in the way investment properties are managed. Traditionally, second home owners in Breckenridge have enlisted property managers to oversee long-term leasing agreements and entrusted the logistics of short-term stays to companies specializing in vacation rentals. More than ever before, however, buyers are purchasing a second property for the express purpose of turning it into an AirBnB—trendy decor, self-managed Instagram marketing, and a housekeeper functioning as a boots-on-the-ground contact for guests most definitely included.
“Limited service hosting” is the name of the game here, and it looks like this: Property owners handle advertising, payments, and bookings, and hire a host to function as the guests’ on-call contact and housekeeper. The duties of a limited-service host vary, but might include greeting guests and providing them with check-in information, responding to emergency calls during the guests’ stay (“We’re out of toilet paper!”), inspecting the unit for property damages once guests have checked out, and turning over the unit to prepare for the next arrival.
The impact of this trend on our local market has been two-fold. First, our buyer demographic now includes more millennials than we’ve seen previously. Forty-something professionals and recent retirees aren’t the only age groups competing for Summit County’s limited inventory. Newlyweds are also jumping on the chance to invest in real estate early, with the expectation that they will start seeing a return on their investment almost immediately by turning their finds into AirBnB rentals. Second, we’re seeing an increase in the budget buyers are willing to allot to the purchase of a second home. When renting is off the table, budgets tend to hover around the $750,000 mark. Throw a plan for running a successful AirBnB into the mix and being able to obtain a legal short term rental license, however, and that budget typically lands north of a million dollars.
If the idea of running your own quasi-bed-and-breakfast in Breckenridge to bring in additional income appeals, here are four things to keep in mind as you begin your hunt for the perfect property:
1. You Must Have a Short-Term Rental License
The town of Breckenridge is divided into 4 zones: the Resort Zone, Zone 1, 2 and 3. Zones 1-3 have a cap on the number of short term rental licenses allowed. The resort zone, on the other hand, has an unlimited number of licenses allowed. At this time, new licenses are only available in the Resort Zone and Zone 1. Anyone looking to own a short-term rental in Zones 2 and 3 will be put on a waitlist and will not be able to obtain a new license for many years. You can find more information on Breckenridge zoning and licenses here.
2. Real Estate Inventory in Summit County Is Incredibly Reduced
…and, as previously mentioned, this means more competition than ever before. Properties in certain price ranges are going under contract almost instantly following very limited showing schedules. Two years ago, a property might sit on the market for 45-60 days without drawing a single offer. Nowadays we’ve seen multiple properties listed under the $1 million mark go under contract after being on the MLS for less than one week.
3. If You Find a Property You Like, Be Prepared to Make an Offer
Do your homework ahead of time, and when you find a property that meets your requirements, be prepared to move on it almost instantly. Pre-qualification letters are a must in today’s market. Set yourself apart by going through the underwriting process with a bank in order to get a leg up on other offers. Since hot properties have been going under contract within 48 hours of being listed as of late, it helps to work with an agent who has access to our local MLS. It’s ideal to work with an agency that’s big enough to have a global reach in terms of exposure, but small enough to provide you with personalized listings that meet your exact specifications on a daily basis.
4. Use Your Local Real Estate Agent as a Trusted Advisor
When your real estate agent tells you about local market trends and shares statistics about the price point properties are currently selling at in Summit County, believe them! Your agent is not out to make an extra buck off your transaction. It’s especially important to find someone who is knowledgeable of the neighborhoods and short-term rental licensing. My recommendations to buyers are backed up by statistics about the percentage of the list price you need to offer in order to be competitive, and when you’re pricing your home to sell, the same logic applies. Currently, coming in with an offer that’s just 12 percent below asking price might not even get you a counter. As your agent, I would never risk wasting your time, my time, or another agent’s time by making a recommendation that’s off-center of current market trends. I’m working for you, and always have your goals in mind—and if those goals happen to include opening an AirBnB in Breckenridge? All the better!
To learn more about Summit County real estate or to start your AirBnb journey, give me a call at 970-333-0082 or email me at [email protected]. Let’s stay connected - visit my Instagram here!
