Ski Vacation Home Nets
Homeowners Large Profit
Editor's Note: This is the first installment of "Resale," a regular column that profiles vacation-home owners and their residential investments. We'll take a look at homeowners' purchases, expenditures for improvements and/or mortgage costs, and their final gains upon resale -- and compare their profit to home-price appreciation rates in the area.
Purchased: March 2004 for $495,000
Sold: March 2006 for $945,000
Gain: $393,300, or about 79.5%
Deer Valley is a ski-resort subdivision within Park City, Utah. Park City's popularity as a vacation spot increased after the city hosted some of the events for the 2002 Winter Olympics in Salt Lake City, 23 miles away.
The home sellers: Fritz Opel, 63, a retired venture capitalist, makes his primary home in San Diego with his wife, Jeri Opel, 54, and their 14-year-old son. They moved from Colorado to California in 1985 and missed having easy access to skiing. In 2003 they discovered Deer Valley's slopes -- one of which has a 3,000-foot drop -- and decided to vacation there regularly. In 2004 they purchased a condo on the grounds of a condominium hotel resort called The Lodges at Deer Valley and used it five weeks a year -- about three in the winter and two in the summer.
The property: The two-bedroom, two-bath condominium has 1,500 square feet and a nice view of the mountains from the deck. The Opels adorned it with rustic furniture, moose decorations and framed photographs that Mr. Opel took himself. The first-floor condo is in a three-story building with about 150 units, plus a lobby, a gift shop and gym facilities on the first floor. When the Opels weren't using their home, the management company rented it out for them for about $1,200 a night during ski season and $300 to $400 a night in the summer. "It generated $40,000 in revenue the first year we owned it," Mr. Opel says. That was about $10,000 more than the $30,600 they owed annually on their mortgage, association fees and property taxes combined, he says. For the two years that they owned the unit, "it paid for itself," Mr. Opel says.
Transaction: They purchased the condo for $495,000 in March 2004 and sold it for $945,000 in March 2006. Two bidders helped push the sale price from the listing of $935,000. They paid a commission of 6% on the sale of their home, bringing their final profit to $393,300.
Improvements: None. But when they changed both queen-size beds to king-size, they saw an improvement in the rental frequency.
Bottom line: "We were not looking to sell, but when the market went up that fast, we had to make the decision to do it," Mr. Opel says. The money will go toward retirement savings. They don't plan on buying in the area again, Mr. Opel says. In selling the unit, they made a gain of $393,300, or about 79.5%, higher than the 45% rate of condo appreciation in the Deer Valley subdivision between 2004 to 2006, according to Betty Brown, president of the Park City Board of Realtors. Some of the positive factors that may have affected the price the Opels received include the unit's sunny interior, ski-run views, its first-floor location and its relative spaciousness compared to other two-bedroom units in the development, says Heidi Gatch, the couple's real-estate agent.
Sources: www.heidigatch.com, www.pureutah.com, realtor.org, www.pcmls.com
Have you recently sold a second home that you think would make a good Resale profile? Email a description and a photo of your property.
Ms. Curry is a free-lance writer in Maple Grove, Minn.
Email your comments to rjeditor@dowjones.com.