Vail, Summit County vacation rentals often, but not always, more profitable than long-term leasing | VailDaily.com

Vail, Summit County vacation rentals often, but not always, more profitable than long-term leasing

The graph above shows the median yearly revenue generated by different vacation-rental properties, broken down by their number of rooms, in Breckenridge (blue), Vail (orange) and Winter Park (red), based on figures provided by the Denver-based vacation-rental management company Evolve Vacation Rental Network.

A new series of reports produced by a Denver-based company that manages vacation rentals shows how just much money these properties can generate in the high country.

Based on the reports produced by Evolve Vacation Rental Network, the owner of a nice, five-bedroom home in Summit County can see up to $100,000 or more in annual revenue when offering up the property as a short-term vacation rental. That number tops out at more than $200,000 in the Vail market.

That's a nice chuck of change, no doubt, but it's not to say everyone who goes this route can expect the same kind of windfall, said one company official familiar with the reports, which were released at the beginning of March.

"There are always a lot of considerations," explained Brian Becker, senior vice president of marketing for Evolve.

“There’s always a lot of considerations. ... Another way to look at that is a five-bedroom unit in Frisco is going to command less than a five-bedroom, ski-in, ski-out unit in Breckenridge.”Brian BeckerSenior vice president of marketing, Evolve

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Providing one example, he said five-bedroom properties are harder to find in Summit County than are smaller accommodations, and like many other pieces of the local economy, it's all directly tied to supply and demand and not all properties are created equal.

As such, only properties in the top 25 percentile of five-bedroom vacation rentals eclipsed or came close to surpassing the $100,000 mark in Summit or the $160,000 mark in Vail, according to the report.

"Another way to look at that," Becker said, "is that a five-bedroom unit in Frisco is going to command less than a five-bedroom, ski-in, ski-out unit in Breckenridge."

Evolve manages more than 7,000 vacation rentals in 500 markets across North America, according to Becker, and these are the same accommodations found on websites such as Airbnb.com or VRBO.com. In fact, Evolve creates some of those listings for its clients, Becker said.

So far, Evolve has produced performance reports for Summit County, Vail and Winter Park, with plans to release about 50 more in the coming months focused on other markets in which the company is working, Becker said.

"With Summit County in our backyard, it's one of our favorite markets, and it's one of the reports we did first," he said, adding that the reports are based on the last 365 days prior to their release, not the last calendar year.

Digging into details

The reports detail the annual revenues generated by vacation-rental properties in the 50th and 75th percentiles, segmented into different accommodation types, ranging from studios to five-bedroom homes, with a number of other stats. The 50th percentile is the same thing as the median, or the amount generated by the property or properties in the exact middle of the sample.

According to the report, the median revenue generated by a three-bedroom vacation rental in Summit County is $33,230. For comparison, a three-bedroom property in Frisco advertised as a long-term rental was priced at $2,950 a month in the Monday, March 19, Summit Daily News. That means a renter would pay just more than $35,000 annually, provided the home stays occupied year-round.

In this instance, the amount of income collected by a landlord who rents on a long-term basis would actually be slightly greater than what someone gets using the same property as a short-term rental. However, based on the report, that's not usually the case.

A three-bedroom vacation rental in the 75th percentile in Summit County, for instance, generates significantly more revenue at $48,000 annually, according to the report. At that rate, it would produce $12,000 more in revenue every year than listing the same property as a long-term rental, even at $3,000 a month.

In Vail, the gap is even wider. The median revenue generated by a three-bedroom vacation rental in the Vail area is $42,665, according to the report. A landlord would have to charge more than $3,500 per month to generate the same amount of income leasing long-term. At the 75th percentile, it would take a monthly rental rate of more than $5,400 to equal the short-term income generated for a three-bedroom property.

Smaller potatoes

At the smaller end of the accommodations, there's plenty of room to make money with short-term rentals, too. According to the report, the median annual income for a studio vacation rental in Summit County is $22,000, and duplicating that at a monthly rate would require a landlord to charge more than $1,800 a month.

In comparison, the median revenue generated by a one-bedroom vacation rental in the Vail area is $20,560, according to the report. A one-bedroom long-term rental was listed for $1,580 in the Friday, March 23, Vail Daily, which equates to $18,960 annually; that number would rise to more than $1,700 per month to meet the short-term rate.

In addition to revenues generated, the report also pegs average daily rates, which show considerable range, as Summit County studios come in at $153 per night, while five-bedroom units go for $576 a night, on average. In the Vail area, studios average $208 per night, with five-bedroom units going for an average of $1,153.

In terms of occupancy rates, every type of accommodation in Summit County sees similar figures, with the four- and five-bedroom accommodations at 40 percent, the lowest occupancy rates in Summit County, while the one-bedroom units see the highest occupancy rate at 49 percent. Occupancy rates for Vail are 32 percent for a four bedroom on the low end, topping out at 48 percent for a one-bedroom rental.

The reports also measures the average length of stay and the average daily rates for both the high and low seasons, defined as the best and worst four months of the last calendar year.

According to the reports, the average length of a stay varies little between seasons at 4.0 days for the peak season and 3.7 days for the low season in Summit County. In Vail, the average is 5.2 days in the high season compared to 3.5 in the slow season.

Vacation rental income

The following figures were taken from a report issued by Evolve Vacation Rental Network at the beginning of March that shows how much different accommodations can generate for their owners in the 75th percentile for the Vail and Summit County markets.

Bedrooms Vail Summit County

0 $31,134 $28,717

1 $38,831 $28,302

2 $57,434 $35,844

3 $65,422 $48,109

4 $85,090 $64,312

5 $160,416 $98,392

Source: Evolve Vacation Rental Network