With new development being heavily restricted and high demand from global investors, real estate prices in ski resorts have shot up in recent years: the premium ski resorts now have stratospheric prices. But, as with all real estate price increases, this has not happened evenly across the Alps. Some resorts have shot up in price relative to their neighbours, with the ripple-effect pushing prices up elsewhere gradually over time.
So with some research and local knowledge, the savvy investor can choose a location that lags behind on the price-surge curve so you can ride the wave on asset value growth. If you’re thinking about buying a ski chalet as an investment and renting it commercially, here are some pros and pitfalls to bear in mind…
- Stick to more established ski resorts. It is much harder to sell in lesser-known locations and rental rates you bring in will be much lower.
- Choose a resort that is popular in the Summer, too, in order to reap year-round income. Locations like Chamonix and Morzine are all thriving resorts in Summer as well as winter. Ski lifts are open in summer for hikers and mountain bikers and there are plenty of summer activities on offer
- Decide the service level you will offer to guests – self-catered versus fully staffed – so that you can decide early on who will be managing the service elements.
- Spec the property to suit the service level intended. Open plan kitchens are the fashion in private homes, but if you have a chef cooking for guests, having a kitchen that can be closed off is preferable. Larger properties will need a more commercial-style kitchen to handle the scale of the catering.
- Spec every bedroom to have its own bathroom, ideally ensuite. Guests expect this in higher-end properties. Also invest in top quality towels, linen, pillows and so on, as well as neutral toned bed linen.
- Invest in high quality zip-lock beds that can be made up as either doubles or twins. This will give more flexibility to suit different groups.
- Consider how guests will need to get to and from the lifts. Easy access to the slopes is a fundamental factor for guests. Self-catered properties ideally need to be close to the lifts. For high-end properties, guests will expect a driver and vehicle.
- Check rental rates of established similar properties offering an equivalent service level in the same area.
- Consider partnering with an established chalet operator or managing agent in the area to operate the chalet for you. They are the experts. They will also have an established brand, infrastructure and client base.
- Invest in top quality professional photography of the property once ready. Good images are crucial.
- Underestimate the time, effort and cost of offering a fully serviced catered chalet. Operating a ski chalet is not easy and even a self-catered property will require a local manager to meet and greet the guests, housekeeping, maintenance, problem resolution and so on, all of which come with a high cost with ski resorts.
- Try marketing the property yourself unless you can commit the time and effort required. Use the network of sales agents to extend your marketing reach and maximise bookings.
- Skimp on interior design and furnishings. If you are targeting high-end guests, they will expect top quality and luxury in every detail. Ensure there is budget to cover this. Use a professional interior designer if budget allows. Also, don’t store personal belongings in it if you want to rent it commercially.
- Assume full occupancy throughout the season, especially in your first season. If you’re marketing a property yourself using your own website, it will take time to gain exposure and build a client base. Like any new business, building sales takes time and so it is unlikely you will book every week of the season initially