- Boutique development of 15 luxury apartments – each with a private sauna
- Prices at Skiwelt Residences start at €299,000 for a two bedroom flat
- They climb to €1,520,000 for a luxury three-bedroom penthouse
- Guaranteed rental yield of up to 5% while still being able to use the property five weeks of the year
For British winter sports fans who take the plunge and buy a mountain holiday home, France has long been the favoured choice, with developers geared up to offer apartments that can be let out with minimum hassle when not in use.
Taking a leaf out of the French book, a new small development in the Austrian Alps is targeting British skiers and snowboarders, with an offer of easily accessible and fully kitted-out apartments that also offer a rental income.
But the apartments come with a catch – in that they must be let out – and buyers need to carefully weigh up the ‘guarantee’ on the rental income.
In the latest in our series looking in-depth at properties for sale, Myra Butterworth headed to the Alps to see what exactly is on offer and ask would you buy this house?
Two and three bed apartments are available at the new development just outside of Austria’s Westendorf.
Many of the apartments benefit from south-west facing private balconies or terraces.
What’s the deal?
Today, we’re in the Austrian village of Westendorf, to visit the site of a new boutique development for ski and golf enthusiasts. There are only 15 apartments available at Skiwelt Residences – each with either two or three spacious bedrooms and a private sauna.
The highlight of this exclusive development is its location – surrounded by stunning mountain scenery and within easy walking distance of the ski lift at Alpenrosenbahn, which links to 450km of glorious piste.
WOULD YOU BUY THIS HOUSE?
Location: Just outside of the Austrian village of Westendorf, east of Innsbruck
Cost: From €299,000 for a two bedroom apartment
Big attraction: Within easy reach of the ski slopes and golf courses
What does it cost to run: Running costs are deducted before the rental income is paid
It is 75 minutes by car from Innsbruck airport and perhaps more importantly only an hour and 45 minutes from Munich airport, which being a major international airport offers a wide choice of typically cheaper flights than smaller airports do.
Where exactly is it?
The development itself is in a quiet location just outside of the Austrian village of Westendorf, which is east of Innsbruck in Tyrol.
It is a beautiful setting, with stunning views overlooking the Brixental Valley, with a ski lift and golf course within walking distance.
Westendorf is just down the road from the famous Austrian resort of Kitzbuhel and is part of the large SkiWelt Wilder Kaiser Brixental ski area.
The region has huge appeal during the summer with the local nature reserve offering a playground for hikers.
The property is within easy walking distance of the ski lift at Alpenrosenbahn.
What’s the asking price?
Buyers should expect to pay from €299,000 – the equivalent of £227,000 – for a two-bedroom apartment at Skiwelt Residences.
Prices climb steady from there, up to €1,520,000 – or £1,156,000 – for a three bedroom penthouse.
It is considerably less of an outlay than what investors would pay in neighbouring Kirchberg and Kitzbuhel for the same type of property.
The apartments come with an offer of a 5 per cent ‘guaranteed’ rental income, which can go towards any mortgage payments.
The guarantee is provided by tour operator Sundio Group based in Zurich and covers the rental income and not the rental costs. In the case of the two-bedroom flat, this would be €16,500 a year.
What is so special about it?
This is one of the first new developments in Westendorf. The local authorities are strict about what developments are approved as they want to prevent the area turning into a place for second homeowners.
The SkiWelt Residences development was passed as a local family is behind it and there are rules in place about renting out the apartments when buyers are not using them.
In this way, the development will help to keep guests in the resort throughout the year.
The apartments will be fully-furnished, meaning there are no extra costs for investors.
Tour operator Sundio Group will manage the rental, from handling bookings to the handover of keys to guests.
The development enjoys easy access to nearby lifts, linking to 450km of piste during the ski season.
There is a choice of one or two bedroom apartments, with views across the mountains.
Surely it’s not completely perfect?
RENTAL YIELD CALCULATION ON A TWO BEDROOM FLAT
The ‘guaranteed’ rent offer comes from letting the apartments through tour operator Sundio Group based in Zurich.
For a two-bedroom flat, the example figures are:
Purchase price of €299,000 (includes VAT refunded)
Guaranteed rental income of €16,500
This delivers a before costs yield of 5.5 per cent (based on annual rent as a percentage of purchase price).
However, it is important to consider costs and financing when calculating returns.
Deducting management costs and building running costs of €4,869, and example mortgage interest costs of €3,235 delivers an annual income of €8,396
Produces total monthly income of €699.66
Using a 50% mortgage at 2.5%, cash invested would be €161,788, which would deliver a net yield of 5.2%, based on post costs income of €8,396.
(€8,396 divided by €161,788)
Remember, a rental guarantee is only as strong as the company offering it. Do your research on this carefully.
Building on the development doesn’t start until the spring, so you’ll miss out if you’re looking for a base for the remainder of this ski season, or even next.
The apartments are due for completion by April 2017 and it is possible to reserve one off-plan with a deposit of 5 per cent.
If you do buy one of the apartments, you’ll also need to be aware that strict conditions are attached.
These include having to rent out the property when you are not using it to help ensure that Westendorf is busy throughout the year and avoids simply becoming a place for second homes.
You also need to carefully weigh up those ‘guaranteed’ rental returns and how strong the guarantee is.
Who would live in a house like this?
The people buying these properties will be investors who would like to spend some of their holidays in the area during the winter and summer.
They may have young families as the nearby ski lifts means it is easy to get about or they may be simply ski enthusiasts looking to take advantage of the Wilden-Kaiser Brixental and Kitzalps ski area with its 145 ski lifts.
It is also an appealing venue in the summer for keen golfers due to the seven nearby golf courses, with the nearest being only 500 metres from the development.
Who are the neighbours?
There are plenty of holidaymakers seen here throughout the year, including British, Dutch and Germans. But there are also local farmers and workers living in the area.
All of the apartments at SkiWelt Residences have a private balcony or terrace.
Architect Jürgen Kitzmüller shows the MailOnline’s Myra Butterworth the designs at the site of the new development. The existing building will be demolished to make way for the luxury apartments.
The ski slopes can be seen from the site, which is just outside the village of Westendorf.
What is the local area like?
The big attraction is undoubtedly the Austrian Alps, which is a playground for sports lovers throughout the winter and summer.
– Kitzbuhel 15km
– Munich 117km
– Salzburg 83km
– Innsbruck 77km
Is there a local hidden gem that would take buyers a while to find?
While many people may already know the area for skiing, they may be unaware how appealing it can be in the summer.
As well as the nearby golf courses, there is a large nature reserve with some excellent hiking trails.
Where’s the best place for dinner nearby?
There are plenty of good places in the area if you’re looking for traditional Austrian food. However, if you’re looking for an extra special treat, try the Rosengarten restaurant in the nearby town of Kirchberg.
The developer of Skiwelt Residences, Christoph Pöll, said: “You’ll never be stuck for some apres-ski in Westendorf and the surrounding towns – and we have some wonderful restaurants, such as the Rosengarten where you can expect more than a dozen courses of award-winning food and more varieties of Schnapps than you can name.”
What is there for children?
Children can learn how to ski or snowboard on the nursery slopes that are within walking distance of the property. And during the summer, there are six adventure parks in the region, with the closest in Westendorf.
APARTMENT PAYMENT TERMS
– 15% when the building works start
– 35% once the shell of the building is completed
– 20% on completion of domestic series and partition walls
– 12% on completion of windows
– 12% once the internal work is finished
– 4% on handover of the keys
– 2% due after three years or after the developer gives the buyer a bank guarantee or insurance (the insurance covers any structural faults for 30 years and fixtures for two years)
What property purchase costs do buyers need to be aware of?
There’s stamp duty of 3.5 per cent, land registry fees of 1.1 per cent, solicitors fees of up to 2 per cent and administration costs of £150.
Investors can reclaim VAT. However, to do this, they must rent out the apartment they are buying.
That is already a requirement of this development and so the VAT rebate is already factored in – in other words, the €299,000 price is exclusive of VAT.
What does the property cost to run?
The running costs are deducted before the rental income is paid out in five instalments throughout the year.
What items are included in the sale of the property?
The freehold apartments are being sold fully furnished through Pure International. There is also a reception area and a ski room. However, while each apartment has an allocated underground parking space, they cost an extra €25,000.
STRICT BUYING CRITERIA REQUIRES APARTMENTS TO BE RENTED OUT
Buyers must rent out their property when they are not using it. Tour operator Sundio Group will manage the rental, from handling bookings to the handover of keys to guests and cleaning before the new ones arrive.
The scheme offers guaranteed rental income but you need to remember that a guarantee is only as strong as the person or company offering it. Make sure that if you consider buying you do your own research into the company in question and weigh up the strength of the guarantee.
Buyers can choose from two schemes:
1. Guaranteed rental income where buyers will get a guaranteed income that will be paid throughout the year in five instalments in January, February, March, April and August.
Buyers are limited to using the apartment for five weeks a year. The rate for the weeks chosen will be deducted and an extra tour operator fee of 15 per cent is charged.
The guarantee can expire after three years, when Sundio Group can introduce a new one – however, the new guaranteed amount will never be lower than the initial amount guaranteed.
2. Prognoses based rental income where buyers have more flexibility to book their apartment on both holiday weeks as well as shorter weeks and weekends.
They’ll need to book six months in advance of the season, although short notice booking is available. There is no stated booking limit and so buyers could book it for, say, six weeks of the year.
But they cannot live in it and the tour operator can issue a financial penalty if the property is not rented out. No rental income will be received when the buyer uses the property. Buyers also have the flexibility to select a different operator.
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