If you are drawn to Big Sky for the powder days and bluebird summers, you might be weighing two popular paths into the market: a condo-hotel or a conventional condo. Both can work well, but they come with very different rules, costs, and financing realities. The right choice depends on how you want to use the property and what you expect from rental income. In this guide, you will learn how each model works in Big Sky, what to expect from fees and lending, and which due diligence steps will help you buy with confidence. Let’s dive in.
Big Sky basics: seasonality and demand
Big Sky is a resort market with strong winter and summer peaks. Ski season and the warm months typically drive the highest occupancy and nightly rates. Shoulder seasons can be quieter, which affects annualized income for both condo-hotel units and conventional condos when rented. If your plan relies on rental income, build projections that reflect seasonal swings rather than smooth, year-round averages.
What you own: condo vs. condo-hotel
Conventional condo
You hold a deeded unit in a condominium association. You control how you use the unit within the HOA’s rules, whether as a primary residence, a second home, or a rental if allowed. The HOA manages common areas and building systems and charges assessments to cover maintenance and reserves.
Condo-hotel
You own a deeded residence inside a hotel operation run by a management company or brand. Many projects offer a centralized front desk, housekeeping, and a rental program. Participation in the rental program may be mandatory or optional, and if you join the pool, your personal use and reservation windows are often limited by owner-use rules.
Owner use and control
In a condo-hotel rental pool, you usually agree to program rules that preserve hotel inventory and brand standards. That can include blackout dates, advance booking limits for owners, and specific furniture or design packages. In a conventional condo, your personal use is generally only limited by HOA rules, and you decide whether to rent nightly, rent long term, or keep it purely for personal stays if the HOA permits.
Income and operating costs
How income flows
Condo-hotel income often goes into a centralized pool and is distributed by a formula. You may not receive the full gross rent from nights your specific unit is occupied. In a conventional condo, you can self-manage or hire a local property manager, keep closer control of rates and marketing, and receive the gross rents less your chosen management fees and costs.
The fee stack to expect
Condo-hotel ownership typically involves HOA assessments plus hotel program charges like management commissions, housekeeping, marketing fees, and required contributions to an FF&E reserve. These fees can materially reduce net income even in strong seasons. Conventional condos have HOA dues and any property management fees you choose, often with fewer hotel-specific costs.
Seasonality and volatility
Peak winter and summer periods in Big Sky can be strong, while off-season occupancy may be low. If your plan counts on steady rental cash flow, be conservative. Ask for historical occupancy and revenue reports, and compare gross versus net income after all program fees and owner expenses.
Financing differences
Lenders often treat condo-hotels and rental-heavy projects as investment properties. Underwriting can be stricter than for a primary residence condo, and some lenders apply project approval criteria that not all buildings meet. Expect different down payment requirements and rate options than you might see for a traditional primary residence loan. Work with a lender experienced in resort condos and condo-hotel underwriting so you understand approvals, overlays, and how your use plan affects terms.
Taxes and compliance
Rental income is taxable, and owners often can deduct eligible operating expenses, depreciation, mortgage interest, and property taxes. Big Sky nightly rentals can be subject to lodging or resort-related taxes, and you need to confirm who collects and remits those taxes if you are in a rental pool. Montana does not have a statewide sales tax, but local lodging and tourism taxes can apply. Check how taxes are handled in your rental or management agreements so your reporting matches the program’s structure.
Management, maintenance, and insurance
Condo-hotels shift the daily work to a manager who handles bookings, check-in, housekeeping, and brand standards. That convenience comes with fees and less control over rates and policies. Higher occupancy can mean more wear, so review FF&E reserve requirements and replacement schedules. Insurance needs also differ. The project may carry commercial coverage for hotel operations, but you will want to confirm what the master policy covers and what owner policies are required for personal property and liability.
HOA rules and dispute resolution
Before you buy, study the CC&Rs and bylaws for rental restrictions, minimum lease terms, and the amendment process. Some condo associations limit or ban nightly rentals. Condo-hotel documents will outline how revenue is allocated, how disputes are handled, and the standards the manager must meet. If there is a disagreement about operations or fees, your path to resolution will follow the documents, so it pays to read them closely.
Valuation and resale
The buyer pool for condo-hotels often includes investors and second-home owners who want hotel services and brand presence. The buyer pool for conventional condos can include more full-time residents and second-home owners who prefer control and flexibility. On resale, factors like brand strength, audited income history, HOA financial health, reserve balances, and any special assessments can influence price and time on market. Smaller units and investor-focused projects can see variable timelines, especially outside peak seasons.
Which one fits your goals
- Choose a condo-hotel if you want hotel services, on-site management, and a hands-off rental experience, and you are comfortable with program rules and fees.
- Choose a conventional condo if you want more control over personal use, rental strategy, and costs, and you are willing to manage or oversee management directly.
Quick comparison checklist
- Personal use: Are there limits, blackout dates, or advanced booking windows?
- Rental control: Who sets rates, manages marketing, and screens guests?
- Income flow: Is revenue pooled or unit specific, and how are fees deducted?
- Costs: What are HOA dues, program fees, FF&E reserves, and housekeeping charges?
- Financing: Will lenders treat this as a condo-hotel or a standard condo project?
- Taxes: Who collects and remits lodging taxes, and how will you report income and expenses?
- Insurance: What does the master policy cover, and what owner coverage is required?
- Resale: What documents and income history will future buyers expect to review?
Due diligence for Big Sky buyers
Gather these documents before you finalize your decision:
- Condo declaration and CC&Rs, bylaws, HOA budgets and reserve studies
- Recent HOA meeting minutes and any special assessment notices
- Management agreement and rental program agreement for condo-hotel projects
- Historical occupancy and revenue reports, ideally audited
- FF&E reserve policy and replacement schedule
- Master insurance policy summaries and required owner coverage
- Zoning and local lodging or tourism tax registration requirements
- Comparable sales and current listings for both condo-hotel and conventional condos
How to make the numbers real
Build two versions of your pro forma. First, a conservative case that reflects seasonality, lower shoulder-season occupancy, full fee loads, and realistic replacement reserves. Second, an upside case using strong winter and summer periods. Compare net results, not just gross rent, and pressure test your plan for changes in demand, fee increases, and special assessments.
A local path forward
Big Sky offers a range of condo and condo-hotel options that can match different lifestyles and income goals. The best fit is the one that aligns your personal use plans with clear, well-documented financial expectations. If you want help sorting through HOA documents, rental program terms, and local lending options, reach out to the team at Montana Property Brokers. We will help you evaluate specific buildings and units, connect you with local lenders and tax pros, and zero in on a property that fits your plans.
FAQs
Can I live full time in a Big Sky condo-hotel?
- Often you can, but rental program rules may limit owner-use nights, reservation windows, or set blackout dates. Always confirm the owner-use policy in writing.
Do condo-hotels guarantee rental income in Big Sky?
- Guarantees are rare. Income depends on occupancy, seasonality, program fees, and market conditions, so review historical reports and fee schedules.
How does financing differ for condo-hotels vs. condos?
- Lenders often treat condo-hotels as investment properties with stricter underwriting. Conventional condos may qualify for broader loan programs if the project meets approval standards.
Who pays and remits lodging taxes on nightly rentals?
- In condo-hotel programs, the operator often collects and remits lodging taxes, then reports to owners. If you self-manage a condo, you are responsible for registration and remittance.
What fees should I expect beyond HOA dues in a condo-hotel?
- Common charges include management commissions, housekeeping, marketing fees, and FF&E reserve contributions. These reduce net income and should be in your pro forma.
What documents matter most when comparing options?
- Prioritize CC&Rs, rental or management agreements, audited income reports, HOA budgets and reserve studies, insurance summaries, and any special assessment notices.
