Did you rent your Deer Ridge Mountain Resort unit through Ridge Management Ltd., RML, for all of 2009?

Wonder how your unit’s performance stacked up against the other units for rental?  Well, here’s a chance to find out.

An owner of one of the 2-2 units at Deer Ridge provided me a copy of their year end RML statement.  Here’s what their numbers looked like for 2009 (used here with their permission):

A Quick Analysis

• Owner X had gross rental income on their unit of $14,454 for all of 2009.
• In December, the income was $456 for 6 rental nights according to the above information.  This works out to an average nightly rental rate of $76.
• Since this is a 2-2, let’s assume that the average nightly rental was $105 per night across the whole year.
• This means that for $14,454 of gross income, this unit was rented for about 138 nights out of the 365 nights in a year.
• This means that this unit saw an economic occupancy of only 37.7% – or conversely, a vacancy rate of 62.3% for the year.
• These numbers are consistent with the entire Deer Ridge property as a whole, which has suffered from an average annual economic occupancy of only 39% for the past 8 years under the very questionable leadership of General Manager Joe Thomas.

Is Deer Ridge A Good Investment? / Bad Investment?

• Owner X saw distributions for the whole year of $4,504.  This works out to an average monthly check to them of about $375 per month.
• From this distribution, Owner X had to also pay:  Sevier County taxes, electricity, content and liability insurance, HOA fees and other maintenance from wear and tear and theft.  All of this added up to about an additional carrying cost of about $5,800 for the year.
• This means, that Owner X lost about $1,300 for the year – not counting debt service.  This also does not include the costs for any of the thousands of dollars the board is requiring for the upcoming Asinine Assessment.
• If the monthly mortgage payment was $320 per month, then the total LOSS for the year for Owner X was over $5,000!
• If Owner X keeps their unit for 10 years – and these same trends continue, this means that the aggregate loss for them will exceed $50,000!

Does this make it a good investment – or a bad investment for owning a condo at Deer Ridge?

The answer to that is not quite so black and white – and needs a much more in depth analysis to reach a valid conclusion.

Because so many owners, and prospective buyers, want to know if Deer Ridge is a good or bad investment, my next post will be a comprehensive analysis and downloadable document – so you will finally KNOW the answer!

How Did YOUR Unit Compare to Owner X?

In the meantime, how did your unit stack up to Owner X?  What was your economic occupancy rate with RML?  How much did you REALLY end up making or losing on your investment in Deer Ridge when you count all the costs?

Please comment below – and stay tuned for the next post!

Sometimes, leaves look identical - until you look closer

If you are signed up with RML to rent your unit, have you been concerned that YOUR unit doesn’t seem to be rented that much?  Are your net rental checks that you receive from RML way below what you expect?

Ever wonder what happens at the front desk when prospective guests call into the office when the computer doesn’t work “right” – or the person just prefers human reservations?  Ever wonder just how those folks are “guided” in choosing which unit to rent?

Then, read on…we might, just maybe, have a reason why.

As you probably read in one of my other posts, there seemed to be intuitive indicators to us that the unit above us, belonging to a Committee Chairman, was rented a LOT more than other, similar units on the property.

We decided to do a little analysis today – based on RML’s own reservation system that is available to anyone who wants to rent a unit here.  We focused on 1-1-Loft units since that is the type above us.   This analysis was done today, September 29, 2009 – two days before October starts – which is one of THE prime occupancy months for the whole year for Deer Ridge Mountain Resort.

Even though the RML reservation system kept crashing (actually, we were surprised how bad the RML reservation system is) – we found there were 11 total units available for rental that were 1-1-Loft.  This is what we found:

Now, bear in mind, all we know is that those nights were marked, “Unavailable” for rental.  Maybe they are going to be used by the owner, maybe used by friends of the owner…we can’t tell from just the reservations systems.  We also, only did the 1-1-Loft – though the information is there at www.DeerRidge.com for you to do the same kind of analysis for your kind of unit.

However…according to the above analysis, the Committee Chairman’s unit above us already has 81% of ALL October 2009 nights booked – while all the other 1-1-Loft units are averaging 41% – or HALF the booked nights of A-302.

How much more money would you have in your pocket if YOUR unit was rented TWICE as much?

That the Committee Chairman’s unit is TWICE as occupied as the average of ALL the other comparable units is, as they say, “statistically valid.”  Others might say, “Smoking gun.”

We say that the only thing certain about the unit above us is that we don’t know ANYTHING for sure – but there IS a way for YOU to find out about YOUR unit:

• Demand to see ALL the RML books.
• Their fancy reservations computer system can probably easily spit out all kinds of reports and analysis.
• Have the system report for every unit – by unit type:
  • Nights rented for each entire month
  • Total rents collected by each individual unit for entire month
  • Total rents collected total for that unit type for entire month
  • Divide the two numbers to get the percentage of total collection collected by each owner of that unit type
  • Get total dollars paid to each owner of that unit type
  • Compare percentages and dollars for all owners of that unit type
  • Do above for each of past 12 months
  • See if any guns are smoking
• If you need help analyzing the numbers, email me.

We aren’t part of RML – so we are not directly affected by this – no matter what the outcome.  But I recommend the above analysis be completed EVERY month and included with the RML report you receive.

Is this a fluke?  Is it a one-time aberration?  We can’t be sure.  Do the Board and Committee members even know this is going on with their units?  Who knows?

However, there seems to be enough empirical data to indicate this kind of forensic audit needs to be done by owners using RML – to make sure someone is not putting you, and your unit, at a significant income disadvantage – and taking money out of your pocket in favor of putting it the pockets of Board members and Committee members.

In this time of Great Recession and Asinine Assessments, all owners need to be getting a fair shake – on a level playing ground – when it comes to the rental of their unit.

We are all about fairness and forthrightness and total transparency.

If Joe Thomas and the Deer Ridge and RML Boards share those same traits with us, then they should immediately do the above analysis for all members of RML so there is ZERO question.  I will be glad to post the results here on this blog.

Come on, Joe, prove my intuition wrong.  Do the complete analysis I recommend above – and let me post the results here on www.DeerRidgeOwners.com – and whatever it shows, all owners can see.

If Joe Thomas and the Deer Ridge and RML Boards DON’T do this analysis for all RML participants…and/or they fight you for getting you the information you deserve….

Well…maybe it is time for you to get off the RML program…and find another company to manage your unit.

One thing we have noticed since being here for a few months…we notice the number of cars in the parking lot and how occupied, or rather how unoccupied, the place is normally.

Also, as it happens, we live under one of the committee chairman’s unit…and have noticed, from all the footfall noise, that his unit APPEARS to be rented a LOT more than other units when we see so few cars here….he has a 1-1- loft…also, Luther’s unit is close to ours…there appears to be a disproportionate number of cars here by Building A/B vs. the rest of the property.

Some other owners have implied several times that board members and committee chairmen get preferential treatment by RML, etc…and my intuition is that these folks might, just maybe, be getting a WHOLE lot more rental income at the expense of other RML owners with the same type of units.

With the RML reservations system, they should easily be able to show by unit type and unit number – the number of rental nights for the past X months…and what percentage each unit of each unit type is seeing….to see if there is a skew that would show bias that would be cutting the income to other owners in RML.

Obviously, we are not with RML…so this part doesn’t really impact us…but we are all about fairness and justice for ALL owners…and it seems that this issue should be carefully audited by those affected.  If I were in RML, I would be demanding a full audit on this issue to prove or disprove this issue over the past year or two.

Likewise, I would strongly recommend to Luther that he instigate a full audit himself and provide the proof that this bias does not exist.  I would be delighted to post the results of any audit here on this web site.

Just an idea…

PS:  News Flash – Click Proof? to see what some recent analysis shows!