Owning a Park City vacation property is all about the lifestyle. It’s days spent on the ski hill and evenings having a nightcap in the hot tub. But at the same time, owning a vacation property is just that – owning a property. And as a homeowner, you need to consider that in addition to your home being a place your family can use and enjoy, it’s also a significant financial asset that requires strategic decision-making.
Let’s say you currently own a Park City vacation home, but there’s something about it that’s just not serving you anymore. Maybe the decor feels tired, the amenities are outdated, or maybe you’re not using the property as much as you once were. What’s the better strategy in this case? Is it better to renovate the property to get it closer to what you need/want, or should you sell the property and move on to something new?
Let’s take a closer look.
Cost Vs. ROI
If you’re on the fence about renovating vs. selling, you may want to consider some numbers. Whether you’re renovating with the intention to sell now or your family still plans to enjoy the property for years to come, the ROI of the renovation should always be in the back of your mind. It’s always a matter of whether you’ll get a solid return on the investment upon your exit. For example, a $100,000 kitchen renovation should result in being able to sell the house for at least $100,000 more or sell it considerably faster.
If, in your eyes, to continue enjoying the property, the home requires a renovation that won’t result in a better sales price or a faster sale, it might be worth selling and moving on.
At the end of the day, any renovation will help your home sell, but you still need to do the calculations.
Learn more about maximizing your home sale with these posts next:
- How to Get Your House to Sell Fast
- Should I Update My Home Before Selling it in Park City?
- How to Get Your House Ready to Sell
One Big Reno or Piece by Piece?
A vacation property is different from your primary residence. It’s the place where you can leave (most!) of the day-to-day behind you. It’s your respite and your home base for recreation. Beyond calculating the cost of the renovation compared to the return you may get when you sell, you should also consider the scope of the renovation.
Many people take a piecemeal approach to renovations. While this might seem like a good way to stretch your renovation budget, there are two reasons why it might not work:
- When selling, buyers might be turned off if the home doesn’t feel cohesive. For example, you’ve renovated the kitchen, but everything else in the house feels old.
- Sometimes renovations can take a long time. You don’t want to waste months, or even years, of your time owning a recreational property with constant renovations.
In this sense, if you’re set on renovating, consider a more comprehensive full-home job (as long as the numbers work!) However, if you’re doing a mental tally of all the months (or years) it could take to renovate the home to your taste, it might be better to sell it and find something else.
Renovating your home can be an arduous process. Read our tips on How to Renovate Your Home without Losing Your Mind (or Your Marriage!)
Take the Low Hanging Fruit
In some cases, a simple refresh might be enough to help you fall back in love with your vacation home. Maybe it’s a fresh coat of paint or new carpet. These are small projects that can be done in a short period of time for a relatively low cost. As such, these types of improvements are also usually quite good for ROI when selling.
A note on renovations: Having helped countless clients project-manage renovations over the years, we’ve seen it all. We always recommend calling as many places as you can to get quotes. In Park City, particularly, contractors can get quite busy and quote prices that are on the high end of what’s appropriate.
Learn more about navigating the Park City real estate market with these posts next:
- How Long Does it Take to Buy a Park City Vacation Home?
- Pros and Cons of Living in Park City, Utah
- How is Park City Real Estate Different From Other Markets?
Consider Your Options
Let’s say you’ve owned your property for a while now. You have fond memories of ski weekends with the family. But your kids are now grown up with kids of their own. Maybe you find yourself using the property less frequently, but the idea of selling it doesn’t sit right with you. You could always enter the property into a Park City rental program and use it as a vacation rental to generate passive income.
It’s a great option for those who are not getting the most use out of their property but are also not ready to let it go.
Owning a vacation rental in Park City comes with its own intricacies. Many homeowners choose to work with property management companies to handle the day-to-day duties.
Don’t Forget About Taxes
Selling a secondary property comes with different tax implications than selling a primary residence. Tax regulations sometimes change, but it all comes down to the specific use of the property and how much time you spend there. Depending on how you answer these questions, you may be subject to Capital Gains tax when selling.
Here at Chin Fleming Harris Luxury Resort Real Estate, we provide educational and strategic advice to help our clients make the best decisions. Whether you’re on the fence about selling your vacation home vs. keeping it and renovating it, or if you’re looking for bespoke Park City real estate strategies, we’re here to help.
Get in touch today by calling us at 435-647-8035, emailing us at info@CFHparkcity.com, or filling out the form below.
