Skiing apartment in Austria

[naasrd]

I've just come into 90,000 cash, I have 57,000 left on my mortgage having borrowed 60,000 4 years ago. I want to buy a small apartment in Austria, should I pay off my mortgage and borrow the 130,000 for the apartment or take out a seperate mortgage for the Austrian property and put some of my cash towards it?

 

[tiger]

Alot of Austrian ski resorts are at low altitude, so I'd be worried about snow for the future. See this article on the bbc for a similar situation in Switzerland.

 

[Rhino 1]

A mate just got back from snowboarding in Austria and was complaining about the lack of snow - it was almost dangerous. It looks like tiger could be right in his analysis of the low altitude problem.

This would make an investment in a ski apartment at least a risky decision.

 

[pinkyBear]

Depends where you buy in Austria - Kaprun is a glacier which has snow almost all year round.
However for investment you should really look at france. All be it more expensive it has the best european skiing.

 

[auto320]

The high resorts in Austria had good snow this year, but the rest of the country suffered. In particular, the lower altitude resorts in the South Tyrol were green much of the time and had a difficult season.

However the high altitude resorts in particular are not great for investment; even with good snow, the peak season is only a few weeks and doesn't give any kind of rental return worth mentioning. Salesmen typically speak of year-round rental from hikers etc, but this is a myth, except for some small amount of business in the South Tyrol -- the summer crowds are tiny compared to the winter season and there is about a hundred times too much accommodation available for this niche market.

Ski apartment rental is a market segment best avoided unless you are a specialist operator who can actually fill the rooms for the entire season and beyond. If you are a small investor in this market, your job is to be cannon fodder -- you serve a useful role by providing a buffer stock of accommodation for the big operators for two or three weeks of the year. I always advise people to steer clear of the ski business, it just won't make you any money. It is also a very expensive way of maintaining a ski property for your own use.

 

[dontaskme]

I've just come into 90,000 cash, I have 57,000 left on my mortgage having borrowed 60,000 4 years ago. I want to buy a small apartment in Austria, should I pay off my mortgage and borrow the 130,000 for the apartment or take out a seperate mortgage for the Austrian property and put some of my cash towards it?

I think the posters above are answering a different question to the one you asked - maybe you should have posted in the mortgages thread.

You should probably calculate how much interest you will be paying and how much you can expect to earn on cash for the scenarios you outline above to decide which is the correct financing decision.