Real estate investment strategy is simple:Buy low, sell high. But supply-and-demand trends in mostmountain resorts reveal a Catch-22. To make a lot ofmoney, you have to start with a lot. Buy high, sell higherseems more like it. Just look at North America's megaresorts,where a cool million barely buys a time share.
But before they were giants, today's hottest localeswere unassuming high-country hamlets, and there arestill plenty of places waiting to be discovered where evensmall-stakes players can win big. Places like Silver Star, B.C., 350 miles from Calgary.In 1987, Larry and Debbie Walkemeyer of Long Beach, Calif., bought two parcelsof land for $18,500 apiece near Silver Star's then-emerging ski village. They had justmoved to Southern California from Seattle, which they used as a base to drive sevenhours through the scenic OkanaganValley—B.C.'s famous fruit- and wine-producingregion—to ski at the small resort.
"We just fell in love with the lack ofcrowds, the variety of ski slopes and thefriendliness of everyone there, saysLarry, 50, an ordained minister. Pricedout of the single-home market in LongBeach, the Walkemeyers put their modestnest egg into Silver Star. Using $36,000 inequity from the sale of their property inWashington, they got a construction loanto build a 4,100-square-foot Victorianstylevacation house, which cost about$150,000 with furnishings in 1995. Thethree-story, four-bedroom, four-bathhome has a self-contained suite on theground level—a divided or "stratified layoutthat is typical of Silver Star dwellings.Renting out the home generated enoughincome to pay the mortgage andexpenses, and ultimately allowed them tobuild on the other lot. Like the first home,the second one—with four bedrooms andthree baths—also has a separate suite.In 2004, their second house cost around$330,000 to build and furnish, and thetiming of the investment couldn't havebeen better. That same year, theSchumann family of Australia, ownersof nearby Big White Ski Resort, acquiredSilver Star. So far, they've pumped morethan $54 million into lifts, slope expansionsand other infrastructure.
The resort village is perched on aplateau in the middle of the slopes, withskiing above and below amid views of theMonashee, Selkirk and Columbia mountainranges. This season, a new Doppelmayrfixed-grip quad provides 750 feetof vertical and serves a new residentialdevelopment. Last season, a new highspeedquad opened 400 acres of mostlyintermediate terrain in the Silver Woodsarea. The new lifts bring the area's totalto 12, including the Comet Express sixseater—accessing more than 3,000 skiableacres and a vertical drop of 2,500 feet.[pagebreak]This winter also marks the debut of theSnowbird Lodge, a 54-unit luxury condohoteldestined to become the resort'ssignature overnight guest accommodation.Behind and above the lodge, theAlpine Meadows subdivision, with 49 skiin/ski-out homesites, sold out in one day.Construction begins next spring. Anotherdevelopment, The Ridge, will have 92 lots—80 for duplexes and 12 for single-familydwellings—and already has buyers waitingfor the release of the first phase. And justannounced is BaseCamp 360, a 125-unitactive lifestyle—oriented condominiumproject that will be constructed on thebanks of Brewer's Pond, which has iceskating in winter and boating in summerand makes an enticing site for families.
Perhaps the most compelling drawof Silver Star, though, is that real estateprices, while on the rise, are still far belowtheir counterparts at major resorts in theU.S. and Canada. Local realtor DonKassa says that lots are going for $160,000to $315,000, condos and homes are in the$300,000 to $600,000 range, and only afew larger properties and penthouses arenudging above $1 million.
Among those are the Walkemeyers'two homes, which fetch an average rentalfee of $700 a night in the winter and abouthalf that in the summer. Even deductingproperty management fees and taxes,they're turning a tidy profit. Today,homes llike theirs are selling for $950,000to $1.2 million—a four- to sixfold increasein value. By comparison, if they had purchaseda two-bedroom, 1.5-bath home inLong Beach, it would have cost $260,000in 1987 but would have appreciated toonly around $700,000 today, or roughlya 250 percent increase.
Whether property values will reachmegaresort proportions remains to beseen, but Silver Star is turning big profitsfor the not-quite-so-high rollers and givinginvestors like the Walkemeyers a secondplace to call home.