Making use of empty space |

Making use of empty space

Renting out a condominium or second home for the ski season isn’t that difficult, but can be a much larger headache than anticipated.

The first step is to find out what restrictions there might be in zoning and in the mortgage agreement. If a green light is granted, the next step is to get insured. Once that’s done, simply advertise and book.

But managing one’s own property is not a piece of cake, said Sandra Weese, rental operations manager from Blooming Enterprises, a hospitality company in Park City that rents out residences. Owners aren’t always ready for the damage done by guests or the problems that can arise at inconvenient times.

"If you’re trying to do it as a business and establish an income, it’s a lot of work to make that happen," she said.

The most successful renters do it to offset the cost of maintaining a home in Summit County, but renting is no great windfall, she said.

Thousands of people do it every year, which is a testament to its relative ease, but also means it is a competitive market.

"The market is absolutely saturated with rentals. How many property management companies are there in Park City alone? About half a dozen, and each has hundreds of rentals. There are thousands of rentals in Park City alone," she said.

Approval from the city:

Zoning isn’t much of an issue for many homes. The county has no restrictions.

The city differentiates between "nightly rentals" where rates are charged per night, and "long-term rentals."

Anything rented out for less than 30 days is considered nightly, said Brooks Robinson, principal planner for the city.

Many neighborhoods in the city, such as Park Meadows, are zoned as "single family" and do not allow nightly rentals. "Long-term rentals" are allowed nearly everywhere.

Part of the application with the city or county is obtaining a business license. This will require an inspection of the premises, which often leads to the installation of safety measures such as fire alarms that are not always required for homes, Robinson said.

If people want to only rent out a single floor or room, and that area has a kitchen, then it may be considered an "accessory apartment" and must be registered with the city as such, which may have certain requirements for size and access, he said.

As a business, correct taxes will need to be collected and paid by the owner, Weese said.

The state, county and city governments have become savvy about identifying residents who are renting out but not paying taxes. They watch classifieds and cross-check listings with their own records, she said.


Different mortgage plans are designed for different uses of a home. Most mortgages require that the buyer make the property their primary residence and notify the lender if that ever changes.

The following language is taken from a Deed of Trust: "Borrower shall occupy, establish, and use the Property as Borrower’s principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower’s principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing."

Another section states that if a borrower claims a property to be their primary residence, and it is found out not to be (i.e. because it is being rented out), that is considered a material falsification of the loan application.

To avoid problems, owners should notify mortgage companies of a plan to rent if such stipulations are in the deed.


While many Home Owners’ Associations have insurance policies that cover all the units, it’s important for an owner to find any gaps in that policy and make sure his or her own unit is covered, said Joe Hanley of Hanley Farmer’s Insurance.

Hanley has been selling insurance in Park City for 30 years and has dealt with numerous rental situations. Condo insurance is very different from houses and the ins-and-outs can get complicated.

For example, if a condo is rented out, the policy may not cover any damage done while the owner is away.

While house insurance doesn’t always draw a distinction, condo policies do, and rental insurance can be four to 10 times more expensive, he said.

"There’s a whole new set of risks with each set of tenants," Hanley explained.

Policy holders naturally expect home owners to take good care of the property, but a group of fraternity boys on winter break could cause damage the insurance company is unwilling to pay for. Hanley said he’s seen it happen before during Sundance, where a family rents out their beautiful Park City home, severe damage is done, and when the policy holder finds out how it happened, they refused to pay.

Finding renters

Valerie Cruz, an apartment complex manager at Elk Meadows in Park City, said there’s no crystal ball for judging a potential tenant, so a landlord must study the person’s appearance and behavior to get a sense of what they’re like.

Some things are common sense. Older people are usually cleaner than younger people and single people are cleaner than families.

Other traits must be guessed by studying clues. If Cruz notices that children are allowed to run around her office while the parents fill out an application, that may indicate that the children will run wild at home, she said.

Another fairly obvious clue is how they pay the deposit. If they pay up front, she usually never has a problem. If they propose some strange payment plan or technique or need more time to pay it, "that’s a red flag," she said.

Cruz said Elk Meadows subscribes to a service to run background and credit checks at .

A variety of services are available, but with the entry of a social security number, a search on the person can be run nationwide to find any red flags.


Office-supply stores often sell standard, blank rental contract forms that can be used "as is" or as a template. Software is also available for purchase that provides templates and step-by-step instructions for setting up contracts and handling payments.


While it’s possible to handle one’s own rental property, working with an established management company can eliminate a lot of potential problems, said Sandra Weese with Blooming Enterprises.

For starters, companies like hers have been in business for decades and have established professional relationships with cleaning, maintenance and repair services in the area.

"We have a person on-call 24-7 so if the heat goes out on Christmas Eve, solutions are a phone call away," she said.

Renters are booked through reservation specialists at her company, who can get a sense of them and can hold them accountable for their treatment of the property. The company also attracts the renters, takes care of housecleaning and handles the taxes.

If home owners know they want to use a management company, they should be prepared to invest some money in preparing the property, Weese said.

First, it should be fully stocked with kitchen utensils, linens, internet service, furniture, high quality televisions and an attractive décor. Some remodeling may be required. Money should also be set aside to pay for any required maintenance of the property.

Once that is done, the most money can be made when the property is basically handed over for the designated period of time to "rent at will," Weese said.

When a management company has to constantly check into the availability of a property, the likelihood that it gets rented out frequently declines and the hassle may not be worth it.

Other considerations

It may also be wise to retain an attorney and an accountant to handle contracts, settle disputes and assist with taxes.

How to rent out a condo, home or room:

(adapted from information found at and

Review zoning requirements.

Obtain a business license.

Review mortgage documents for restrictions about renting out your home while the mortgage is in effect.

Check rental rates in any classifieds section.


Prepare or obtain a rental lease for the property that spells out specific terms and conditions.

Interview prospective tenants while showing the property.

Check credit, personal and rental references.

Review terms of lease with applicants.

Do a "walk through" of the property with tenants on the day of the move-in and have them fill out a property condition report that verifies current condition of the property. Property condition reports are available at most office supply stores.

Consult a tax advisor about the tax consequences of renting out your home.

Consult a local attornery about landlord-tenant laws if worried that an issue may arise.

Obtain liability, theft, and fire insurance on rental property.

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