Are the rental numbers you were shown for a Vail condo too good to be true? In a resort market like Vail, small shifts in rates, seasonality, or fees can swing returns more than you expect. You want a home you love that also performs as an investment, and you deserve numbers you can trust. This guide shows you how to vet a rental pro forma for Vail and Eagle County condos, with clear steps, realistic ranges, and local nuances like ski-season peaks and lock-off setups. Let’s dive in.
What a strong pro forma includes
A good pro forma starts with clear revenue and realistic expenses, then ends with net operating income before debt and capital improvements. It should be specific to your building, unit size, and rental strategy.
Revenue assumptions
- ADR: Average daily rate should reference market comps or actuals. In Vail, holiday and peak-ski weeks can be 2 to 3 times off-season ADR, so flat annual rates are a red flag.
- Occupancy by month: Vail is highly seasonal, so monthly modeling is essential. Do not accept annual averages without a monthly breakdown.
- Revenue mix: Separate direct bookings from OTA channels. Each has different fees and cancellation behavior that change net revenue.
- Minimum nights and turnover: Minimum-night rules can lift ADR but reduce bookings. Include lost nights for cleaning and resets.
Derived metrics
- RevPAR: ADR times occupancy helps you compare performance across units.
- Gross revenue by key weeks: Break out holidays, Presidents’ Week, and summer peaks.
- Break-even occupancy: Know the occupancy needed to cover fixed costs.
- NOI: Net operating income before debt service and capital expenditures.
Scenario planning
Ask for three cases with supportable assumptions:
- Conservative: Lower ADR and occupancy, higher expenses, stricter minimum nights.
- Base case: Market-average rates and occupancy.
- Upside: Optimistic rates with premium weeks fully booked.
Sensitivity tables that shift ADR or occupancy by plus or minus 10 to 20 percent help you see risk and resilience.
Model Vail seasonality
Vail’s demand is not flat. Your forecast should flex by month and by special weeks.
Seasonal pattern
- Peak winter: Late November through March with extreme holiday premiums.
- Spring shoulder: April to May as ski season winds down.
- Summer peak: Mid-June through August with strong weekend demand.
- Fall shoulder: September to November with lower overall demand.
Calendar specifics
Model holiday periods, Presidents’ Week, spring break windows, July 4th, and major local events separately. Include minimum-night rules and blackout dates. Weekly granularity for peak periods helps catch pricing errors.
Validate every expense
Expenses should be split into variable items tied to bookings and fixed items that hit you regardless of occupancy. Vail often has winter premiums for utilities and maintenance.
Variable expenses
- Management fees: A typical full-service range is 18 to 35 percent of gross rental revenue. Confirm whether this percent is applied to gross or to revenue after OTA fees.
- OTA commissions: Combined platform costs can run about 10 to 20 percent of bookings. Clarify if these are included in the manager’s fee or charged separately.
- Housekeeping and linen: Charged per stay. Many mountain condos see 75 to 250 dollars per turnover or more depending on size and season.
- Utilities and internet: Owners usually pay electric, heat, internet, and water if not covered by the HOA. Expect winter heating spikes.
- Consumables: Budget a small per-stay amount for toiletries and restocking.
Fixed and semi-fixed expenses
- HOA dues: Often your largest fixed cost. Confirm what is covered, such as water, cable, or reserves, because it changes the pro forma.
- Insurance: Vacation-rental or commercial policies are typically higher than primary-home coverage.
- Property taxes: Include Eagle County assessments and any special districts if applicable.
- Licensing and admin: Add business registration and accounting fees where required.
CapEx reserves
Set aside funds for wear and tear. Many owners use 3 to 5 percent of gross revenue or 1,000 to 3,000 dollars per year per unit as a starting point. Plan replacement cycles for mattresses, sofas, and kitchenware.
Taxes and remittance
Expect multiple tax layers that may include state sales tax, county or town lodging taxes, and special district taxes. Rules can change and may apply to cleaning or management fees. Confirm what taxes are charged, who remits them, and how they are modeled.
Model lock-off options
Many Vail condos can rent as a combined unit or as two separate spaces. The pro forma should show both.
How to model
- Separate ADR and occupancy: Price the studio and one-bedroom individually. Combined ADR is not a simple sum.
- Extra turnover costs: Two units can mean more cleanings, linens, and restocks.
- Rules and registration: Confirm HOA policies and local licensing for separate lock-off use.
- Swap rates: Estimate the percent of nights rented split versus combined, then test different mixes.
Local rules and taxes
Vail and Eagle County have specific short-term rental requirements. You should confirm permissibility, licensing, and registration for your exact address. Verify rate types and remittance responsibilities for state, county, town, and any special district taxes. Noncompliance can lead to fines or loss of rental privileges, so build your pro forma on current statutes and documented rates.
Vet a pro forma step-by-step
Follow this process before you rely on any rental forecast.
Step 1: Source every number
Ask for documentation for ADR and occupancy, management fees, housekeeping costs, HOA dues and budgets, utilities, insurance, and tax rates. Confirm whether revenue is shown before or after platform fees and taxes.
Step 2: Read the management agreement
Check how fees are calculated, the payout schedule, cancellation handling, and who remits taxes. Clarify who pays for housekeeping and how guest fees are handled. Watch for duplicated charges or unclear OTA fee treatment.
Step 3: Confirm booking mechanics
Review minimum-night rules and how they affect shoulder weeks. Include lost nights for cleaning. Ensure holiday weeks have premium pricing and realistic occupancy.
Step 4: Validate HOA and building items
Read CC&Rs and rental policies for any restrictions. Review the current budget, reserve study, and meeting minutes for upcoming assessments. Verify what utilities or services are included in dues.
Step 5: Test lock-offs
If the unit can be split, model both configurations with separate ADR, occupancy, and turnover costs. Confirm HOA and licensing status for separate rentals.
Step 6: Stress test the numbers
Reduce ADR by 10 to 20 percent, then occupancy by 10 to 20 percent, and see how NOI and debt coverage change. Identify the break-even occupancy with current fixed costs.
Step 7: Spot red flags
Be cautious if there is no seasonality, no tax or licensing line, unclear fee basis, zero CapEx reserves, missing HOA reserve details, or lock-off revenue without extra costs.
Simple stress test
Run a quick downside check before you fall in love with a number.
- Start with the base case monthly ADR and occupancy. Confirm all expenses, including management, OTA fees, housekeeping, HOA, insurance, taxes, and CapEx reserve.
- Cut ADR by 10 percent and recompute gross revenue and NOI. Note the change in cash flow.
- Restore ADR, then cut occupancy by 10 percent and recompute.
- Combine both cuts to see a severe but plausible downside. If NOI goes negative or debt coverage falls below your target, revisit your assumptions or strategy.
Buyer checklist
Use this quick list before you accept a pro forma.
- Monthly ADR and occupancy by month, not just annual averages
- Market comps for your building type and bedroom count
- Written manager proposal detailing fee basis and tax remittance
- HOA documents, budget, reserve study, and recent minutes
- Current local licensing and lodging tax requirements
- Past 12 to 24 months of P&L if available
- Utility and insurance bills or written quotes
- FF&E inventory with a replacement schedule
- Lock-off permissions and assumptions if applicable
- Conservative, base, and upside scenarios with sensitivity tables
Work with a local advisor
You deserve a clear, investor-grade model and a plan to optimize your bookings across Vail’s seasons. If you want a tailored pro forma with monthly seasonality, lock-off modeling, and a fee review, connect with a local advisor who lives this market. For a private consultation and a practical modeling template, reach out to Beatriz Martinez. WhatsApp available.
FAQs
What should a Vail condo management fee include?
- In resort markets, full-service fees often range from 18 to 35 percent of gross revenue. Confirm if the percent is charged on gross or net after OTA fees, and whether marketing and guest communication are included.
How should I model Vail’s ski-season weeks?
- Model holidays, Presidents’ Week, and spring break separately with higher ADR and realistic minimum-night rules. Desirable units can approach full occupancy on peak weeks, but shoulder periods vary.
Do I need to collect taxes on Airbnb or VRBO bookings?
- Expect multiple layers that may include state sales tax, county or town lodging taxes, and possibly taxes on cleaning or management fees. Confirm exact taxes and who remits them based on your location and manager contract.
What is a lock-off and why does it matter?
- A lock-off lets you rent a combined unit or split spaces separately. It can lift revenue with more calendars but adds housekeeping, linen, and admin costs, and may require specific HOA and licensing permissions.
How much should I budget for reserves in Vail?
- Many owners set aside 3 to 5 percent of gross revenue or 1,000 to 3,000 dollars per year for capital items. High seasonal use in resort condos often warrants the higher end of that range.
