• Chris.Kopf@CBMP.com
  • |
  • (970) 209-5405

Crested Butte Real Estate by Chris Kopf

Chris Kopf Coldwell Banker Mountain Properties

  • SEARCH MLS
  • My Listings
  • Areas
    • Crested Butte
    • Mt Crested Butte
    • Gunnison
    • Almont
    • Maps
    • Subdivisions
    • Local Information
    • Colorado
  • Sell Your Home
    • Coldwell Banker Global Luxury
  • Blog
  • About Me
    • Testimonials
    • Giving Back
    • Newsletter Sign-Up
  • Contact
  • Newsletter Sign-Up

Renting Your Crested Butte Home Considerations

February 4, 2018 By Chris Kopf

Renting Your Crested Butte Home Considerations

Renting Your Crested Butte Home ConsiderationsRenting Your Crested Butte Home Considerations – many Buyers or Crested Butte Home Owners like the opportunity to generate income by renting their home when they are not using it. This can be a nice way to help offset the costs of owning the home, and perhaps there will be additional income left over.

Renting Your Crested Butte Home Considerations

Many people are able to generate some rental income that helps them justify a larger home up front and cover the fixed cost of ownership. However, renting your home will come with some conflicts as to when you will use it, and when you will put it out for rental. The peak rental weeks may also be the times you will want to vacation in your home.

Check with local ordinances, as some areas and HOAs have implemented a ban on vacation rental by owner…

Many Areas and HOAs in Crested Butte Prohibit Short Term Rentals

Renting Your Crested Butte Home ConsiderationsThere are currently a number of areas or Home Owners Associations that restrict or prohibit short-term rentals. The reasoning from the HOAs is that they are striving to attract owners who appreciate the sense of community and are not just absentee owners who fill their home with renters.

The owners in the HOA feel some undesirable renters don’t have as much respect for their HOAs rules (driving fast in the neighborhood, loud parties, too many vehicles in the driveway or on the street, too many people in the home…).

Downtown Crested Butte Short Term Rental Restriction

There is a new ordinance that limits the number of homes that may be in the rental pool. And owners are required to purchase a Business License and Register with the Town of Crested Butte.  See my article: “Crested Butte Vacation Rental Home Update”

Downtown Crested Butte Long-Term Rentals – Crested Butte also has deed restrictions for long-term rentals in “accessory dwellings” that cannot be changed. Meaning that the nice apartment above the garage out back cannot be converted into the kids’ game room space. Yes, really.

As well if you add a garage and want to add a living space above with a full-bathroom – this crosses the line and makes it a deed restricted unit (forever). Make sure to discuss all your intended uses with your experienced local real estate agent to avoid such surprises.

Examples of Some Crested Butte HOAs that Restrict or Prohibit Short Term Rentals:

  • Glacier Lily
  • Wildhorse at Prospect
  • Gold Link (limited to up to 2 weeks per month)
  • The Links Condos in Skyland (in final stages of updating Covenants)Renting Your Crested Butte Home Considerations

Finding a Crested Butte Home that will “Cash Flow”

Renting Your Crested Butte Home ConsiderationsIf you are looking for a Crested Butte property that will “cash flow,” meaning that all of your expenses including finance costs will be covered by your rental income profit, you may want to look for a rental property at the beach.

Mountain towns support rentals on a seasonal basis, and so there will be many weeks when nobody will want to rent your home. Also, when doing your analysis, ask yourself if you got 50 percent of your projected rental income how this would affect your finances.

Remember that the IRS considers income property as a business and there are tax ramifications. Be sure to check with your CPA, financial advisor or retirement planner before investing in property that you plan to lease or rent.

There are many variables that go into this equation: how much you will use the home, if you are using it during peak weeks, the desirability of the home (location, quality, number of pillows, etc.) and whether you are using a broker to rent your home, or doing it yourself.

Most Crested Butte Rental Brokers will charge between 20-50 percent of the gross rental income for their services. They will potentially be managing all aspects of renting your vacation home. The list of tasks is not short, so if you plan to rent by owner via VRBO or AirBnB, be prepared to spend quite a bit of time managing this effort.

Crested Butte “Renting By Owner”: Tasks for Consideration

Here is a shortlist of some of the tasks you should consider:

  • Renting Your Crested Butte Home ConsiderationsWebsite: create, manage and maintain
  • Lease, liability waivers, security deposit forms
  • VRBO.com registration, update
  • Inquiries, phone, email, VRBO.com
  • Screen renters (pets, college students, how many people…?)
  • Deposit/security deposit, collections
  • Final payment collection
  • Referral payments
  • Sales tax and lodging tax payments (just like a hotel, you will likely be required to collect and remit state sales tax and local lodging taxes)
  • Accept checks, credit cards, and/or PayPal?
  • Cancellations, refunds
  • Renter checkin, keys
  • Problems/issues during stay, local property manager contact
  • Maid service coordination
  • Checkout timing (e.g. check out Guest 1, check in Guest 2 same day)
  • Inspect/clean/laundry
  • Multiple sets of linens/towels, laundry done offsite?
  • Snow removal, drive, walkways, deck
  • Put gravel/salt down on ice
  • Hot tub service (daily?)
  • Recommendations, complaints, ratings
  • Security deposit refunds
  • Wear and tear/upkeep/replacement of items

Insuring Your Crested Butte Vacation Home

Many homeowner’s policies specifically exclude properties that are used as rentals. Since this is not your primary residence, you will need to get a vacation home insurance policy. Since no one lives there full time, second homes tend to pose more risks than occupied homes and premiums may be a bit higher. Water damage (frozen pipes), fire, acts of vandalism and liability, for instance, are potentially serious issues with a second home that is not occupied full time.

Most homeowner’s policies won’t cover these types of risks on a vacation property, but vacation or second-home insurance is an option for you through many of the national insurance carriers. You should consider insuring your home for its replacement cost; it is normal that the cost to rebuild your existing home will far exceed your purchase price.

Insuring Your Crested Butte Vacation Home That Is Also a Rental Home

What if the maid service or the property manager does not lock the upstairs exterior door after the renters leave and the door blows open. If it is the middle of the winter and a pipe freezes and breaks it is possible that 50,000 gallons of water will flow through three levels of the house before the problem is detected a week later?

If a pipe freezes and breaks it is possible that 50,000 gallons of water will flow through three levels of the house before the problem is detected a week later? 

Renting Your Crested Butte Home ConsiderationsIf the pipe freeze and flood happened as a result of renters and you did not have a policy covering that use, you may not be covered. Your insurance carrier will likely require you to install a security system that has water detection devices (“water bugs”) located under every sink, next to every toilet, and the water heater.

A water main shut-off valve will be tied into the system so that if water is detected, the water main line will be turned off, preventing significant damage and sending an alert to the home monitoring service.

Fire alarms and CO2 detectors are also required, and will be a part of the home security system. Talk with your insurance company and ensure you have a policy that covers your vacation home, and your rental home scenarios.

A “Regular” Homeowner’s Policy is not Enough

Renting Your Crested Butte Home ConsiderationsA regular homeowner’s policy and a vacation home policy may cover personal liability. But personal liability coverage or a personal umbrella policy will not cover business activities, such renting your second home.

Personal liability is intended to cover you in the event that someone claims that you have caused them bodily injury, or damaged their property as a result of your personal actions.

When you rent your home, you are a business and you need commercial liability coverage (business liability). This coverage is specifically designed for “business activities” like your second home rental business. Liability coverage protects you if someone slips on an icy sidewalk and you are sued for damages.

If there is severe damage to your second home and it cannot be rented, you may also want to ensure that your lost rental income is also covered.

When You Are Not There, Your Crested Butte Home Is “Vacant”

There is a “vacant” status for a residential property, and many insurance carriers will not cover the home, or will require a separate policy or rider (a “vacancy endorsement”). Typically, the home needs to be vacant for thirty days before it is considered “vacant.”

Like everything with insurance coverage, the devil is in the details, and in the fine print of the policy. It is a good idea to ask your agent what their rules and definitions are and how this will affect your coverage. Using the burst pipe worst-case scenario, if you submit a $75,000 claim and the insurance company denies coverage because the home was “vacant” and you did not have the “vacancy endorsement,” you will be sad, and out $75,000.

Who Should “Own” Your Crested Butte Rental Home, You or an Entity?

Renting Your Crested Butte Home ConsiderationsWhat about the “renter slips on the ice” worst-case scenario, where you get personally sued for negligence and $1,000,000? Just like you need liability coverage to protect you, it is also recommended to separate your personal finances from your business liability. It is wise to contact an attorney to set up an entity that will shield your personal assets from a potential lawsuit from a renter.

Anybody at any time can sue you; the lawsuit may be justified or frivolous, but you will likely need to hire an attorney to defend yourself. If you set up a Family Limited Partnership (FLP), Limited Liability Company (LLC) or a Corporation, you can separate your personal assets from being at risk. Talk with an attorney to ensure you are informed and protected.

Crested Butte Property Managers

Most second homeowners have a Property Manager who will watch over their home when they are not there.

Property managers can be your eyes and ears in your home when you are away, and will do what you ask them to do. At a minimum, they will check on your second home once a week, coordinate scheduled maintenance and service providers (hot tub cleaning, snow removal, appliance repairs, etc.).

Crested Butte Property Managers may also provide “concierge-type services”. Delivering a vehicle to the airport, or buying groceries for you prior to your arrival. In addition, they will inform you of the things that need to be done that you might not be aware of.

Final Thoughts

Crested Butte Co Real EstateI hope you see the level of detail and time and effort I put into this candid article Renting Your Crested Butte Home Considerations. I have become a Top Real Estate Agent in Crested Butte by providing my clients with information and insight. This helps them to make informed decisions. Some decisions are not always easy.

This article is an example of what you can expect from me as your agent.

If you would like to know my recommended local Property Managers or Rental Brokerage Companies – Call me to discuss your specific home.

Thanks,
Chris.

How can I help you?

I have over 30 years of sales and marketing experience and am a top real estate agent in the mountain town of Crested Butte, Colorado representing affluent clients who are buying and selling their homes and properties. To see featured properties or search the MLS – visit chriskopf.com.

How is the Crested Butte Real Estate Market Doing?    

Receive the Full Crested Butte Real Estate Market Report – 14 pages of detail and insight into the Crested Butte Real Estate market — and you will get my FREE Monthly Newsletter emailed to you with the Crested Butte Real Estate Market Reports!

See the big picture and all the details of the Crested Butte CO Real Estate Market  – Download Full CB Real Estate Market Report as a .pdf file (more data and charts)

Click the image below to Download the Full Crested Butte Real Estate Market Report Now

2017 Crested Butte Real Estate Market Report

 

Chris Kopf Author Real Estate Agent
DOWNLOAD FREE BOOK

Get your Free Copy of The Complete Guide to BUYING Your Mountain Dream Home – Download your Free Book. Quick and Easy Tips
to Help You Purchase Your Vacation Home in Crested Butte

“I appreciate the opportunity to earn your business and be your Crested Butte Real Estate Agent.”

Contact Info:

Chris Kopf
Global Luxury Property Specialist
Coldwell Banker Bighorn Realty
(970) 209-5405, or chriskopf@bighornrealty.com

Click here to do an advanced search the Crested Butte MLS  for properties for sale in the Crested Butte area.

Chris Kopf Coldwell Banker Bighorn Realty Crested ButteRenting Your Crested Butte Home Considerations

Email, RSS Follow

banner

Contact Chris

Providing Superior service to the Crested Butte real estate market.
(970) 209-5405
Email Chris
Google Maps Link

Free Books

Buying your mountain dream home
This message is only visible to admins.
Problem displaying Facebook posts.
Click to show error
Error: Server configuration issue

Connect with me!


Chris Kopf, Coldwell Banker Mountain Properties
305 6th Street
Crested Butte, CO 81224
  • Chris.Kopf@CBMP.com
  • (970) 209-5405

Testimonials

Bobby Nichols

"The first moment we met Chris, my wife and I knew he was all about what is happening in real estate sales in Crested Butte. He knows his job, the marketplace and the innovative ways to market your home in today's electronic internet space. A real professional that understood us and our needs in handling a very successful sales transaction. "

 
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:45:19-07:00
"The first moment we met Chris, my wife and I knew he was all about what is happening in real estate sales in Crested Butte. He knows his job, the marketplace and the innovative ways to market your home in today's electronic internet space. A real professional that understood us and our needs in handling a very successful sales transaction. "  
https://chriskopf.com/testimonials/bobby-nichols/

Jeff Hollings

Chris is outstanding! We recently bought a second home in Crested Butte and Chris did a great job throughout the whole process. He has a thorough understanding of the market and the benefits and drawbacks of various locations. He was very patient with us as our preferences evolved throughout the search. He gave us valuable information on which to negotiate the purchase. He had great follow-up during the inspection/closing process (when we were not in town) and made sure all of the commitments made by the seller were properly completed.
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:46:48-07:00
Chris is outstanding! We recently bought a second home in Crested Butte and Chris did a great job throughout the whole process. He has a thorough understanding of the market and the benefits and drawbacks of various locations. He was very patient with us as our preferences evolved throughout the search. He gave us valuable information on which to negotiate the purchase. He had great follow-up during the inspection/closing process (when we were not in town) and made sure all of the commitments made by the seller were properly completed.
https://chriskopf.com/testimonials/jeff-hollings/

James Brennan

This was our first experience trying to purchase additional land with hopes of building a home. Chris was tremendously helpful throughout the entire process and his professionalism showed.
Crested Butte Real Estate by Chris Kopf
2014-10-14T17:59:24-06:00
This was our first experience trying to purchase additional land with hopes of building a home. Chris was tremendously helpful throughout the entire process and his professionalism showed.
https://chriskopf.com/testimonials/james-brennan/

Jane Saltzman

Chris was terrific to work with. The house sold faster then I ever expected! He was particularly helpful for this second home owner that couldn't always get there to take care of house issues. Thank you Chris!!!
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:49:37-07:00
Chris was terrific to work with. The house sold faster then I ever expected! He was particularly helpful for this second home owner that couldn't always get there to take care of house issues. Thank you Chris!!!
https://chriskopf.com/testimonials/jane-saltzman/

Georges Lussier

The thought of a short sale was intimidating, but Chris made the experience very easy with lots of guidance from start to finish. I would highly recommend Chris for any Real Estate need buying or selling.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:40-06:00
The thought of a short sale was intimidating, but Chris made the experience very easy with lots of guidance from start to finish. I would highly recommend Chris for any Real Estate need buying or selling.
https://chriskopf.com/testimonials/georges-lussier/

Frank Stringer

Chris Kopf is a wonderful person to work with on any real estate matter you may have in Crested Butte. He is extremely knowledgeable of all elements of the Crested Butte area. He helped us recently to buy a new second home in Skyland and the entire experience was first class under Chris's guidance. I would highly recommend him to anyone who has a real estate need in Crested Butte.
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:51:04-07:00
Chris Kopf is a wonderful person to work with on any real estate matter you may have in Crested Butte. He is extremely knowledgeable of all elements of the Crested Butte area. He helped us recently to buy a new second home in Skyland and the entire experience was first class under Chris's guidance. I would highly recommend him to anyone who has a real estate need in Crested Butte.
https://chriskopf.com/testimonials/frank-stringer/

Paul & Julie Keesee

Chris was quite helpful in showing us homes in the area we were interested in and contacted us when new listings were available. We not only consider him our realtor but also a friend.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:59-06:00
Chris was quite helpful in showing us homes in the area we were interested in and contacted us when new listings were available. We not only consider him our realtor but also a friend.
https://chriskopf.com/testimonials/paul-julie-keesee/

Jim & Sandra Wickham

Chris' patience and persistence paid off for us in finding the right house for the right price. We would highly recommend Chris to any potential buyer.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:06:18-06:00
Chris' patience and persistence paid off for us in finding the right house for the right price. We would highly recommend Chris to any potential buyer.
https://chriskopf.com/testimonials/jim-sandra-wickham/

Tom & Mary Aton

It was a great experience working with Chris, after showing me what I thought I wanted, he advised me of the pros and cons on the different condos and found one that I am thrilled with.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:06:31-06:00
It was a great experience working with Chris, after showing me what I thought I wanted, he advised me of the pros and cons on the different condos and found one that I am thrilled with.
https://chriskopf.com/testimonials/tom-mary-aton/

Dan Aquaviva

This agent has a very strong knowledge of the local area. He was very helpful in screening properties for potential purchase.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:26-06:00
This agent has a very strong knowledge of the local area. He was very helpful in screening properties for potential purchase.
https://chriskopf.com/testimonials/dan-aquaviva/
0
0
Crested Butte Real Estate by Chris Kopf

The data relating to real estate for sale on this web site comes in part from the Internet Data Exchange (IDX) program of Colorado Real Estate Network, Inc. (CREN), © Copyright 2016. All rights reserved. All data deemed reliable but not guaranteed and should be independently verified. This database record is provided subject to “limited license” rights. Duplication or reproduction is prohibited.

Full CREN Disclaimer Fair Housing Disclaimer

Equal Housing Opportunity. Equal Opportunity Employer.

Copyright © 2021 Chris Kopf Real Estate, Ltd.