Mar 13, 2023 / INVESTMENT

Is a ski home a smart investment?

Purchasing a ski property is not just going to guarantee you a wonderful time on the slopes, as long as you organise your finances wisely, it has great potential as an investment too.

Gliding through the mountains to your heart’s content, sipping wine from your jacuzzi, dining out at Michelin restaurants – there’s no doubt that owning a ski property would enable you to have absolutely fantastic holidays. But owning a ski chalet is not just having access to amazing holidays, it is also a smart investment, as long as you organise your finances effectively. Plus, the value of a ski home is almost always on the rise, and they have huge possibility for rental income. Here we go through why a ski home is a smart investment.

What it costs: Budgeting for buying

Interior of a living room in Cortina d'Ampezzo, Italy

In your excitement over owning a ski home, you may have got carried away in thinking that all you had to budget for was the listed price of the property. But buying comes with additional costs, and when you’re buying overseas, it can be tricker to navigate.

The cost of buying varies from country to country, and if you have only bought property within your own country before, it is vital to familiarise yourself with the cost of buying in the country you are interested in, so that you can budget effectively.

The cost of buying includes registration, real estate agents, legal, as well as sale and transfer costs. Registration fees can entail stamp duty and notary fees. While legal fees are mandatory in some countries and not in others.

When comparing the cost of total transaction (buying and selling a property) in different countries, the range is clear to see. In the UK, the cost is around 10%. If you are after a ski property in the USA, it is 8%. But if you are seeking skiing in Europe, then it is closer to 13 or 14% in France and Italy. Switzerland is just 6%.

Budgeting for running costs

Terrace view of the mountains in Monte Bondone, Trento

Once you have effectively organised your finances to buy abroad, it is also important to budget for the running costs of the property.

In data collected by Your Overseas Home, the UK was compared to six other European countries, many of them ideal for skiing. Their aim was to uncover how affordable life is overseas by looking at the price of everyday things like groceries, the price of a domestic cleaner, hobbies and leisure, healthcare and travel.

Overall, their data showed that Italy was the most affordable place to call home. It ranked seventh, with the UK in at number one, and then Germany (no.2), Spain (3), France (4), Portugal (5), Greece (6). A British shopping basket was almost 40% more than an Italian one full of the same items.

So, even though purchasing a property abroad is undoubtedly a big purchase, long-term, you could reap the benefits of a lower cost of living.

The Dolomites, here we come!

What you’ll probably gain:

Rise in property values

Since the world has opened up again following pandemic restrictions, interest in purchasing a ski property has risen. According to the Ski Property Index released by Knight Frank, for the first time in three years, Switzerland was the favoured place among ski property buyers. In Verbier, some properties sold for as much as 12% over the asking price. In France, Chamonix and Megève were the frontrunners with an increase from 6.1% and 4.7%, respectively, up from the previous quarter. Additionally, with many major companies including Google and British Airways announcing that they have transitioned into hybrid or fully remote working, many people are choosing a new lifestyle of mixing up work with skiing. As well as excellent skiing, priorities for remote workers include fast broadband and proximity to the airport, should they need to return to the office urgently.

So, any ski property is a smart investment if you choose to sell later on, as the price of your property is likely to have increased as demand does. 

Potential rental income

In the same report, Knight Frank highlighted that 90% of ski property owners are looking to rent out their home; this is up from 65% in 2005. Home owners choose to do this because it generates a rental return, funds their own holidays, and can cover maintenance costs. Moreover, the amount that you can charge for rent is significant. Knight Frank found that Courchevel commanded the highest daily average of rental income at €516, with Veriber coming in second at €463. Moreover, there are locations where chalet rentals are in short supply: St Mortiz, Courchevel, and Veriber – a gap in the market for you to fill?

Organise your money effectively by speaking to a currency specialist

Interior with a window view to the mountains in Courchevel, France

The smartest way to start your ski property purchasing journey is to speak to a currency specialist, like Smart Currency Exchange. Say, you have set you have budgeted for both the cost of buying and the running costs of your new ski home. The last thing you want is for your budget to become subject to changes in the exchange market. One way to effectively mitigate against this is to use a Forward Contract to lock in an exchange rate for up to twelve months.