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How is the housing market in Montana? Going very strong.
What's the difference in the market now from 5 or 10 years ago? An astonishing transformation has happened. Prices have doubled over the last five years. In 2003 it was said that prices double about every 10 years in this area. The pace has picked up and it seems to be now down to 5years where the prices double, but land prices have increased even to 30-50% per year and have doubled every 2 to 3 years.
Any trends that you've noticed? More people want to get out of dry areas that are getting drier and hotter. They want to get out of crowded places and crime ridden places, places ridden by natural disasters.
The typical buyer: Looking for land for retirement before Montana is sold out. Or they like to buy vacation homes, so they can rent it out while they can book themselves into it when they themselves have a vacation. Later they plan to retire there.
Avg. cost of a home:
Low-end: 125,000 on a 3,000sqft lot with 630 sqft house which needs updating and fixing.
Mid-range: Right now $360,000 with five or less acres. With 5 acres or more it is $800,000.
High-end: $1,650,000 on 4 acres on the creek with a 6,000 sqft mansion, guest house with 3bedr/2 bath and a studio over the garage. Over 5 acres.
What do prospective buyers look for in a vacation property in your area?
Property Type: Home with acreage, ranch or just land. Some would like to open a dude ranch, or be an outfitter. They would like to have it adjacent to National Forest, with a creek, some trees, lots of wildlife.
Location: Most don't want to be too far out in the sticks. They are used to city services.
Size: Most like to have at least 3 bedroom home. Many come from huge homes and 2,000 sqft is tiny for them.
Any specific amenities: Mountain Views. Homes without mountain views and too close to neighbors do not sell well at all.
Anything that a prospective buyer should be aware of (vacation rental bans, etc)? There are no bans around Red Lodge, because this is a big industry here. There is one in a gated community with a fragile mountain environment where vacation rentals are discouraged because of the wear and tear on the landscape.
If you purchase a property with rentals on the books, do you have to honor those bookings? If the new owner does not want the rental income, then the people are put into a different rental when the home sells, unless it is a month to month rent, or a long term lease then that needs to be honored.
Tips for buying a vacation rental home in the Montana: Your property needs a hot tub for the skiers in winter and a fire place. For summer residence creek frontage or stunning mountain views.
If you go too far out of town, those homes will not rent as well, because Red Lodge has all the festivals and goings on, along with mountain trails, the Beartooth Highway that goes over 11,000 ft high to the Yellowstone Park, golf course, 1,000 lakes in the National Forest. Red Lodge is a great spot, because it not only has the highest mountains in Montana, which are as high as the Alps in Europe, but also because we are at the edge of a desert, we have almost 300 days of sunshine a year and not enough snow to get in the way. But the ski mountain has the biggest and best snow machines in the state with 73 runs and 8 lifts. River rafting is a lot of fun for the whole family in summer.
Dorothea Lowe is a Real Estate Broker with offices in Red Lodge Montana and Detroit Lakes Minnesota. She is originally from Berlin, Germany and has been in the real estate business most of her life in different capacity. She founded her own business Sky Lodge Properties, Inc. in 2003. Red Lodge is a resort area and a prominent vacation rental area as well. Her websites are MontanaHereICome.com and MinnesotaHereICome.com.
To get a feel for the Montana Vacation Rental Market or to find a great vacation property to rent, browse Montana Vacation Rentals on HomeAway.com.
Are you a realtor in a vacation market who'd like to do a Q&A? Email us.
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