By: KeyCrew Media
Out-of-state buyers entering Park City’s short-term rental market consistently miscalculate income potential by assuming year-round occupancy, a mistake that distorts underwriting and sets up investors for disappointment when actual revenue falls well short of projections.
The $500-a-Night Trap
The error is predictable, according to Derrik Carlson, a Resort Real Estate Advisor with Real Estate in Park City, the Luxury Division of KW Park City Keller Williams Real Estate. Buyers visit during peak season, pay premium nightly rates, and then build their investment models around those numbers applied to a full calendar year. “They might stay here, and they see, hey, we’re paying $500 a night or $1,000 a night, and then they multiply that by 365,” Carlson says.
In reality, Carlson says most Park City properties produce meaningful rental income during roughly 120 to 150 peak days annually. The rest of the year brings sharply reduced demand, shoulder-season vacancy, and carrying costs that continue regardless of bookings. Investors who fail to model this seasonal structure are working from assumptions the market does not support.
A Seasonal Problem, Not a Management Fix
Park City’s rental economy is shaped by ski season, summer tourism, and the shoulder months in between. No management company, however skilled, can manufacture demand during periods when visitor traffic is structurally low. The seasonal cycle is a fixed feature of the market, not a variable that investors can optimize away.
Carlson acknowledges that some buyers arrive with realistic expectations, particularly those with prior experience in mountain or resort markets. But the pattern of overestimating occupancy is consistent enough that it has become one of the more common sources of investor frustration. “I think there are some buyers that expect a higher rate of return,” he says. The gap between expectation and outcome tends to surface in the first full year of ownership, when shoulder months arrive, and revenue projections built on peak-season logic fail to materialize.
Carlson adds that what Park City rental owners actually take home has stayed consistent over the years, and it sits well below what many buyers assume going in. “Buyers here tend to expect that they pay cash and it’s going to offset their cost of ownership,” he says. Rental income in a resort market rarely covers the full cost of holding a second home. Investors expecting cash flow comparable to urban rental markets are applying the wrong framework to a resort economy where appreciation, not income, drives long-term value.
How Carlson Approaches Rental Underwriting
Carlson’s approach to helping clients underwrite rental purchases starts with replacing theoretical projections with realistic occupancy assumptions. Many listings show limited rental history because owners use the property themselves or rent it only lightly. “You’re going to want to lay out what the projections are,” Carlson says. “Show them what their cost of ownership is going to be, their cost of management. Lay it all out on the table.”
In practice, this means presenting clients with detailed spreadsheets that account for peak days, vacancy periods, management fees, and carrying costs, then testing the model against different appreciation assumptions and hold periods. Carlson draws on a finance background and personal experience owning investment properties to structure these analyses.
The goal is not to discourage purchases but to ensure decisions rest on what the market actually delivers. Clients receive a spreadsheet they can adjust themselves, factoring in their expected rate of return, projected appreciation, and intended hold period. “They do adjustments, and then see if it works for them or not,” Carlson says.
Management quality also matters once an investor commits. Carlson says the difference between a property that produces returns and one that doesn’t often comes down to operations. “If you can get the right people in place to help it run well and really take that burden off of the owner being involved,” he says, the property performs. “But if you don’t have a good management company on there that’s taking care of the property and marketing the property, you’re not going to see the returns.” Even realistic underwriting cannot compensate for poor execution after closing.
Derrik Carlson is a Resort Real Estate Advisor and team lead of Real Estate in Park City, the Luxury Division of KW Park City Keller Williams Real Estate. With nearly two decades in the Park City market, a 2026 ranking as the #1 Keller Williams agent in Utah, and CNE, RSPS, LHC, and CELA designations, he specializes in luxury, ski-access, and resort real estate across Park City, Deer Valley, and the Wasatch Back.
Disclaimer: This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
