A while back I shared six lessons we learned from buying and selling property in Estes Park, Colorado. I wanted to follow-up with the lessons we’ve learned from renting out our cabin. I’m going into a lot of detail in this post, but I hope that it is helpful for anyone who is considering buying a property in Estes Park with the idea of renting it out to offset costs or earn income. There are many ways to rent out your property, and I’m not an expert, but I hope you find this helpful.
Scheduling our vacation time
We live out-of-state, so we wanted to take advantage of the time we are away from our cabin by earning rental income. Our property has on-site management that takes care of all the details for us from booking to cleaning. This means we don’t always know when our cabin is booked, so we must communicate with the management company to understand availability. There have been several times that we haven’t reserved our preferred weekend in advance and the cabin was booked. The summer and fall weekends can fill up quickly in Estes Park.
balancing income vs. personal use
We are still trying to figure out the best balance between using the cabin for ourselves and earning income on the property. Some years the rental income covered the cost of owning the property (homeowner association dues, cleaning fees, utilities, insurance, property taxes, and basic repairs). It wouldn’t cover the cost of a mortgage or larger maintenance projects in one year. However, we have been able to save income over a few years’ time and use that money to upgrade the flooring.
The issue of balancing income is something we expected based on the trade-off of having a significant percentage taken out of rental income with the turnkey on-site management, as well as our own personal use of the condo during peak season nights. Obviously, if you pay for the cabin in cash or pay off the mortgage, there is less ongoing costs to factor into this equation. Blending personal usage with your investment property can also have unique tax implications, so be sure to keep good records and consult with a tax professional to keep things straight.
Repairs and projects
We were a little concerned that renting out our property would result in extra expenses related to heavier usage. We are grateful that our guests have treated our cabin with care. We had to fix our fold-out couch which was covered under warranty. There were a few other minor issues like a shower door getting off track and a leg of a stool that needed repair. Overall, we’ve had good luck so far.
We invested in our property by staining the outside. The stain will help protect the wood from harsh winter conditions and keep the cabin looking beautiful. This cost was in addition to our normal HOA fees.
In 2021, we upgraded our flooring. We chose LVP which we hope will last longer and be more durable. Having work done in a mountain town can be more expensive and difficult to schedule. We were happy with the service and quality we received from a local company, Park Flooring.
The pandemic has had a positive impact on bookings as more people want to get outside and can work remotely. Based on this usage, we are anticipating additional repairs and budgeting for them.
Cleaning service (pros and cons)
As owners we pay a cleaning fee each time our property is rented. We feel like this is a better value for our guests, compared to other vacation rentals that tack on extra booking and cleaning fees. We also pay a cleaning fee for our own visits so that the property is always up to a rent-ready standard. It’s nice to be able to leave without worrying about washing and drying all the bed linens. At our first Estes Park condo, we often spent half a day cleaning before we left town.
We have found it helpful to keep a spreadsheet of expenses and a separate bank account for this property for tracking purposes. It’s also important to understand the insurance/liability that comes with owning a rental property. Condo insurance can be complicated. We have separate coverage for ‘walls-in’ while the structure is covered by the HOA’s policy. With that much riding on the HOA, it’s important to understand the financial condition of the association to avoid any surprise expenses or assessments.
Pets and personal items
Many renters prefer pet-free units for allergy concerns. We are technically allowed to bring pets as owners, but the management company doesn’t allow renters to bring pets. Therefore, to make our cabin marketable we don’t bring our dog along with us on our trips. This adds a significant expense to our vacations. Dog boarding costs up to $40 a day. We are okay with this trade-off because the National Park doesn’t allow dogs on trails and that’s where we typically hike. However there are a lot of dog-friendly hikes in the area, and if you love to bring your dog on adventures, this is something to think through as you consider the rental process.
We also don’t put up a lot of personal items such as family photographs. If we didn’t rent out our cabin, I would love to add more personal touches. We have an owner’s closet and put away some personal items, but for the most part the cabin is furnished in a mountain theme with renters in mind.
the best fit
When we bought our first condo in Estes Park, we were able to go nearly once a month, sometimes on a whim. At that time, we didn’t put our property in the rental program. Now that our girls are in elementary school and we live further away, it makes sense to rent it out despite the trade-offs. We feel lucky to be a part of a solid management group that has a great reputation with guests that return year after year. We also have amazing guests who treat our property with care. I’m not sure what we will do in the future, but right now renting out our property in Estes Park has been a great decision for our family.