Starting Out

The Cost Breakdown of Renting Out a Ski Apartment

To effectively manage your self-catered ski apartment rental business and generate a profit, it’s helpful to put together a breakdown of the costs involved. In this post, we’ll be explaining how to do so, and discussing the financial considerations that you’ll need to be aware of. 

Establish your goals

Before you analyse the financials of your ski apartment business, you should first ask yourself what you want to achieve.

Whilst some owners are keen to use their property as much as possible and cover costs, others are more focussed on achieving higher profit margins and return on investment. 

Co-ownership France: Annual Syndic service charge 

When purchasing an apartment in France, there are strict rules and regulations regarding owners’ rights and responsibilities. Co-owners are required to share the costs of building insurance, as well as the maintenance of shared spaces and facilities such as lifts, door entry systems, parking, storage spaces, gardens and so on. This ensures that the building is secure and well looked after for all to enjoy.

Co-owners generally pay a professional agency, a ” Syndic” to organise and manage the above. Owners are legally obliged to attend (or have a representative attend or vote on their behalf) the annual general meeting to discuss and approve annual budgets.

The Syndic collects fees to cover costs every quarter, as well as organising the relationship with service providers regarding things like repairs and redecoration. Your sales agent should provide you with relevant information detailing the Syndic appointed for your apartment programme and the fees you’ll likely incur.

NB. The Syndic fees are not included in our variable costs case study – owners will have to pay the Syndic fees whether they rent out their property or not. 

The cost breakdown

Let’s take a look at an example of a cost breakdown for a ski rental apartment…

You have to pay fixed costs such as the repayment of your loan and insurance whether you rent out or not.

Variable costs are related to the smooth daily running of your rental business and vary depending on the volume of bookings and your own use of the apartment. For instance, if you don’t have reservations, you’ll have little to no extra electricity and water charges.

(IMPORTANT: These are guide prices only – prices will differ according to ski resort and the type of local management solution on offer.)

Renting out a ski apartment for 4 people paying 2500 for 1 week:

Variable costs:

Variable costs per stay
Guest Management 150-200€ per booking150€150€
Cleaning (3 hours)25 – 35€ per hour25€ per hour75 €
Sheets (2 double beds)25€ per bed2 x double beds50€
Towels (1 bath, 1 hand per person)10€ per person4 x bath, 4 x hand towels40€
OVO service fee10% of the booking250€
Water, electricity30€
Welcome gift20€

Fixed costs:

Divide your total annual fixed costs by the number of weeks your property will be occupied for this calculation.

Take this example of an apartment that is occupied 25 weeks a year:

Annual fixed costsOccupation Fixed costs per stay
8000€25 weeks320€

Adding variable and fixed costs together will provide you with an estimated number of expenses to cover during a stay (935€ in this example). In this case, the profit on a booking worth 2500€ would be approximately 1565€.

Other considerations

If you’re comparing the online pricing of properties with similar accommodation, consider the following:

  • Advertised pricing isn’t always what a property is eventually rented for – owners can make special offers or reduce pricing to secure bookings.
  • In a ski destination, apartments tend to attract higher bookings in peak seasons, and perhaps fewer out of season bookings than ski chalets with extra outdoor facilities.
  • Location has an impact on bookings out of season. For example, apartments in tourist destinations are likely to be popular all year round, as opposed to those in ski resorts where activities and facilities may be closed off-season.
  • Profit from short stays can accumulate across a calendar year, as long as your local teams have the availability to cover them. However, consider that local team costs aren’t radically different for short and long stays – and short stays are often priced lower than weekly stays. More bookings mean increased running costs!
  • Although you’ll want to minimise outgoings, you still need to meet guests’ expectations. At the higher end of the market, we recommend that our owners provide a welcome basket, toiletries and cleaning supplies, all year round. These small touches make a big impact on your feedback and reviews, helping to achieve repeat bookings and amplify interest in your apartment.

Want to start a ski apartment rental business in France?

Find out how much your ski apartment could earn from holiday rentals with our rental return calculator…