Host, Christine Karpinski:  Today's guest is Dennis Hanlon. He's a real estate broker in Park City, Utah. He's been active and full‑time in the real estate market in Park City since 1989.

So yes, he is a long‑time real estate broker, probably a really good person to turn to if you're looking to buy in the Park City area. He has been the managing broker of a local Coldwell Banker office. He's also the founder and president of the Rocky Mountain Resort Alliance, which is a group of Realtors that have gotten together to share information on ski resorts in the Western states.

His website is www.DennisHanlon.com. I'm excited to be talking to you today, Dennis. Thank you so much for joining.

Guest, Dennis Hanlon:  My pleasure. I'm looking forward to this.

Christine:  Talking about buying real estate in the vacation market is always a lot of fun. We're now in the latter part of the summer. People are starting to get tired of the heat, and are starting to think about the snow. So tell me a little bit about Park City?

Dennis:  Park City is located in the Wasatch Range of the Rocky Mountains. We're about thirty miles from the International Airport in Salt Lake City. We have three world‑class ski resorts, here in town; Park City Mountain Resort, Deer Valley and the Canyons Resort.

Christine:  Nice.

Dennis:  It is.

Christine:  It's really nice that you're close to the airport. There are some places, in say Colorado, that if you want to go there, you have to fly into one airport and then fly into another one. Salt Lake is a hub for Delta, isn't it?

Dennis:  That's correct. One of our biggest draws is that we're so easy to get to from most any place in the country.

Christine:  Right, that's definitely a draw. The Park City area has been a popular destination. I can remember back in high school that a lot of my friends would actually go to Utah to go skiing, and Salt Lake, and that whole area, are just beautiful during the summertime.

Dennis:  It really is. If you have never been to the mountains in the summertime, you've missed out on something terrific.

Christine:  And especially that part of the Rockies is very different than the Colorado side. It is almost desert‑like terrain, but at the same time, you've got the real Rocky Mountains. You go there and you know why they're called the Rocky Mountains.

Dennis:  That's right. We do rise right up out of the desert. We go up to over 12,000 feet here. So we get right up in a hurry.

Christine:  Is that higher than parts of Colorado?

Dennis:  No, generally the Colorado ski resorts all tend to be a little bit higher than we are. The base of Park City, the town, is at 7,000 feet. Where if you go to Vail it is about 8,000 feet and Breckenridge is at 10,000 feet, and that's actually another big draw for us. For a lot of people coming up from sea level, that extra one two or three thousand feet, from 7,000 to 10, 000, can be pretty uncomfortable.

Christine:  It's true. I will tell you that I am one of these people who gets altitude sick, and it's not fun.

Dennis:  No, it isn't.

Christine:  I've actually been in Colorado and had to go to the hospital just because I had really bad altitude sickness, and for a long time, VRBO's head offices were in Colorado, and they would always say “Christine, come out to Colorado to give a seminar”, and I still haven't gone back.

Dennis:  You'll have to come visit us in Park City.

Christine:  I have been there and didn't have a problem. I had to drink a lot.

Dennis:  There you go.

Christine:  But I didn't have a problem.

Dennis:  Well there's nothing wrong with that either.

Christine:  No. Well tell us a little bit about the housing market there in Park City? How has the vacation home market been?

Dennis:  It's still very strong here. We keep hearing about how the housing market throughout the country is just going down, and that's just not happening at the resorts. We're still doing good. We're not like we were in 2005; that was a crazy year. But the market is good. Properties are selling. Prices are on the rise, sellers are not desperate by any means.

Christine:  I think that's probably key and certainly true in a lot of markets. Though you might see a lot of properties on the market, what you have to remember is these are vacation homes. They don't need to be sold right away. So you're right, the sellers are not desperate, which tends to hold the market stability better, than say in a market where you've got to sell your house because you bought another one, your kids are going to be starting school, or something like that.

Dennis:  That's correct. We sell the fun real estate, where if somebody has it, they don't have to get it sold right away.

Christine:  Right.

Dennis:  The worse thing is they have a beautiful place to come to for the wintertime, and they're getting good rental income when they're not using it.

Christine:  This is true. Now what do prospective buyers look for in a property in Park City?

Dennis:  Well I think it's like every place-- location is the key. You want to be really close to the ski resorts and to the town of Park City. They each have their advantages. If you're close to the resort, you'll have what we call 'ski‑in/ski‑out', where you just walk out your door, put your skis on, go ski, come home and go right to your door.

There's also an advantage to being downtown, in the center of the town. There's a little more activity, and a littler better rental income during the summertime. It's not quite as scenic, perhaps, but there's trade‑offs for each of them.

Christine:  And that's also an important point is that year‑round rental ability. You might be able to rent that 'ski‑in/ski‑out' place a little easier, maybe even for more money. But I would venture to guess they're probably more money to buy. Is that correct?

Dennis:  That's correct.

Christine:  So if I were weighing them, I might go for the place that has the bigger year‑round appeal. However, I think that's always up to the individual buyer.

Dennis:  Right, that's what it really comes down to. What is the individual buyer looking for? Are they looking for a place that is primarily 'rental income' driven or 'their use' driven?

Christine:  Now, speaking of those buyers, are there any patterns that you see? Are they of a particular sort of age group? Do they come from a certain part of the country?

Dennis:  Sure. Our buyers are tending to get younger and younger these days. It's wonderful, 40's to mid‑50's I would say is our average buyer. And where do they come from? The Western US is still our biggest market: California, Las Vegas, Phoenix. But as you mentioned, Salt Lake City Airport is a Delta hub. So anywhere Delta flies direct is our market.

Christine:  So I would venture to guess that you've got a fair amount of people from Atlanta.

Dennis:  We do. We also get people from Chicago, New York, Orlando, Houston. All of those are direct flights for Delta.

Christine:  Now in the Park City area, are there primarily houses, condos or is it a mixture?

Dennis:  It's a mix of both. Around the ski resorts tends to be more condos than homes, but not exclusively that way. Around 'Old Town' Park City, the historic district, it's mostly old miners' homes that have been restored, and are terrific rental properties.

Christine:  Neat. Now what about the costs? They sound great.

Dennis:  We finally get to that.

Christine:  Let's separate the condos from the homes and generalize saying that they're right there with the 'ski‑in/ski‑out'. What is the low end, mid‑range and high‑range of a condo?

Dennis:  Sure. If you're looking at condos, you can get condos around the ski resort starting at the low end in the $400,000 ‑ $500,000 range. You can find a good variety of very nice condominiums in the $600,000 range. When you start to get 'ski‑in/ski‑out', now you're talking at least $1,500,000 and going up to around $3,000,000.

Christine:  Wow, that's a big jump in price from the 'ski‑in/ski‑out' to those condos a little bit further away.

Dennis:  We relate it to walking out your door and being on the beach or being a block from your beach.

Christine:  And there are pluses and minuses of both.

Dennis:  Of course.

Christine:  And we have to realize that every single renter wants that 'ski‑in/ski‑out'. But then you look at the prices: $400,000 or $1,500,000 ‑ $3,000,000.

Dennis:  That's right.

Christine:  And I would imagine the rental prices reflect that as well. Is that correct?

Dennis:  They do. But as you were mentioning earlier, many times the lesser‑priced condominiums will actually rent more often, and particularly during the summer months, the ski resorts tend to be a little isolated, so you don't get quite the [number of] summer rentals, but the location is fabulous.

Christine:  Right, right. So it's definitely something to think about when you're buying a property there. You need to put it on a scale, and you need to weigh out those benefits and risks of buying the home that you love and enjoy, and not to say that you wouldn't love or enjoy a lesser‑priced one, but as you said, everyone wants that 'step out on the beach' property.

Dennis:  That's right.

Christine:  Now do you know what percentage of home buyers purchase with the intentions of renting? Is it a large percentage?

Dennis:  Sure. With my business, that's really all I can speak of, about 90% of my buyers purchase with the intent of renting.

Christine:  Wow, that's a big percentage.

Dennis:  It really is.

Christine:  That's one of the higher percentages that I've heard.

Dennis:  We are a 'second home' market.

Christine:  Very good. So I would venture to guess that since that's what the buyers are looking for, there's going to be a lot of information available to the home buyer, that relates to rentals when you go to look at properties. Is that correct?

Dennis:  That's correct. That's really what everybody wants to know about. How does this property rent? What kind of income can I expect from it? What am I going to look at for appreciation? Why should they take this property over the next one? And that's where the expertise of the Realtor is so important in a home buying purchase.

Christine:  Yeah, because especially with those markets, you don't live there, it's really important to go to somebody who knows that market and can give you all that information. Now if I were searching on the Internet and looked for properties on your website, would you tell me on your website whether this property, that costs $600,000 to buy, might bring in $40,000‑ $50,000 worth of rental revenue? Or is that something I'd have to contact you to get?

Dennis:  You would really have to contact me on that. It varies so much from property to property, and how much the owners use it themselves. So it's very difficult to generalize to what kind of rental income a property is going to get.

Christine:  Right. Now we know that the 'ski‑in/ski‑out' is going to affect the cost of the property. But do you think that overall, it affects the rentability of the property?

Dennis:  Absolutely. During the wintertime, during the ski season, the 'ski‑in/ski‑out' condos, which are closer to the resort, rent first and rent for the highest price.

Christine:  Now is there anything that I need to look out for? I know in a lot of areas, especially when you talk about the Rockies, you're talking about a lot of it being nationally preserved land. Is there anything I have to worry about, as far as land ownership or government oversight into my property when I purchase in the Park City area?

Dennis:  Not too much. We don't have a lot of national forest here in Park City, we're almost all private land. The only thing that you really do have to look out for, and it's not a huge concern, is that we are a mining town, and there are areas of mine tailings that have their own specific requirements, and you have to know where those are and what to do with them.

Christine:  OK. Now, is it still an active mining town?

Dennis:  No. Unfortunately, while we still have a lot of silver under the ground, the cost of extracting it is more than the value of it.

Christine:  Interesting. So are there mining tours and stuff that you can go on?

Dennis:  There used to be, but they're really not that much fun.

Christine:  Oh. Well is sounded like it could be fun. OK. Now, in a lot of markets, and we're seeing this more and more every day, there is sometimes a little bit of animosity between the permanent residents and the people who rent out their vacation homes. Is there much of that that goes on in the Park City area.

Dennis:  Not really. We understand that we're a tourist town, and that vacationers make our town great. However, with that said, we do have residential communities around, in Park City, where you can not do nightly or short‑term vacation rentals.

The vacation rentals are restricted to the resorts, the resort commercial areas.

Christine:  Right.

Dennis:  And as long as everybody understands that, we have no problem.

Christine:  OK, well I mean, I imagine, because you said such a high percentage of people buy with the intentions of renting, that this is a pretty good market where you can buy and be pretty sure that you're not going to be up against a wall with regards to being able to rent.

Dennis:  Oh no, absolutely not.

Christine:  As long as with that caveat: You're not buying in that residential neighborhood.

Dennis:  That's right, and that's just what your Realtor has to be able to tell you. You have to be up front and say, "I'm looking to rent my property out." And then the Realtor can say, "OK, you can't buy in these particular areas."

Christine:  Now, VRBO.com and HomeAway.com have people that primarily rent their properties without the use of a property manager. Do you know that, if I bought a property from you and it was being managed by a property manager, do I have to honor the bookings that that property manager has made?

Dennis:  The short and quick answer is yes.

Christine:  You do?

Dennis:  Yes, you do. And if you look at it logically, you can understand it. If a property manager has booked a family coming up for a Christmas vacation, and here it is in July. And you purchased this property now in September and you say "I don't want the property manager to be booking this any more."

So this family coming out at Christmas time, you're going to have to move them. Well, we're already booked up for all of Christmas.

Christine:  Right.

Dennis:  So now we tell this family, 'Sorry, you can't come to Park City now.' That puts a pretty bad taste in somebody's mouth.

Christine:  Right. Yes, it totally makes sense, and I would imagine that, if the property manager does have the ability to move those people, then he or she would do that, but...

Dennis:  Yes, they do try, if at all possible.

Christine:  Right. So it is just something to keep in mind. We ran across this, I think it was in the Outer Banks of North Carolina, that it is actually the law that if you purchase a rental property, with the intentions of renting it, that you have to honor those bookings.

Now, this is not true in all areas, but it is definitely something to be cognizant of, especially if you intend to rent it out on your own, without the use of a property manager; that possibly, the first year, you may have to be paying some of those commissions anyway.

Dennis:  That's correct.

Christine:  Now, what about sales tax in your market? Do you have to collect and pay sales tax?

Dennis:  Yes, as an owner we have a ten percent city tax that would have to be collected by the owner and paid to the city.

Christine:  Right.

Dennis:  You would also have to get a business license, and we'd have to have a City inspection done on the property, to make sure that it meets all codes.

Christine:  Now the city inspections, I know some people kind of shy away from those, they're always afraid of them.

Dennis:  Right.

Christine:  I will tell you, they're actually really good. They're not coming to shut you down by any means. They're really coming to serve you, to help protect you from liabilities that you could have that you don't know about in renting your home.

They're not going to come in and strong‑arm you into putting on a metal roof, or something crazy like that.

Dennis:  No, no, not at all.

Christine:  But it's really in your best interests. OK Dennis, I have one last question. I know that a lot of really good real estate agents in vacation markets realize, that buyers that come to the area, they tend to look at the properties and they take a fair amount of time to go home and make their decision. And sometimes it takes anywhere from 18 months to maybe 3, 4, five years to actually buy a home. Do you have a newsletter that you keep in contact with your buyers?

Dennis:  I do, I have both the newsletters I send out to my buyers on a regular basis, and on my website I have a weekly and a monthly blog that I do to keep everybody informed as to what's going on in the Park City area.

Christine:  Oh neat. OK, and just remember his website is www.DennisHanlon.com. And, you know, Dennis, thank you so much for joining. And this was certainly some really good cursory information about the Park City, Utah area, and I think that if people have questions, they should definitely call you.

You sound like you know what you're doing. You'll keep people informed about the market, and about the properties that are up for sale. Again, his phone number is (800)‑641‑1884, and as usual we'll have a link to Dennis' website from the Owner Community. Thank you so much for joining, Dennis.

Dennis:  My pleasure, Christine.