Many of our clients are interested in buying Park City real estate as an investment. These properties fall into two main categories: long term tenants and nightly (vacation) rentals. For nightly rentals, my rule of thumb is that if you pay cash and don’t use it yourself, after expenses a typical return on investment in Park City is about 2%. I’ve found this figure to be remarkably consistent across a broad range of properties, from fractional ownership at the Grand Summit in Canyons Village to luxury condos in Empire Pass at Deer Valley. With limited owner use, this is often enough to defray your carrying costs. You may do a bit better with a full-time rental property, but of course you wouldn’t be able to use it yourself.
As an investment property, the big question that I will not answer for you is capital appreciation. As I like to say, if I knew what the future would hold for the Park City real estate market, I’d be in a different business! I think it’s best to take the position that your rental prospects should make you happy enough while you hold on to your property and then let the fluctuations of the market work themselves out over time.
If those guidelines still have you interested buying a rental property in Park City (and why wouldn’t you?), then I use a couple simple spreadsheets to get a more specific idea of what I might expect, given the information that we know combined with certain assumptions. These yields projections that still of course are far from perfect and only as good as those assumptions, but it’s at least some basis for you to set your expectations and make a decision.
Send me an email at email@example.com and I’ll send you a copy of my spreadsheets. And while you’re at it, go ahead and ask me any other questions you might have.