How to Cash in on Your Vacation Home
While the recession may be over, recovery has been slow and for many, money is still hard to come by. You might be tempted to sell your beach house or mountain cabin, but truth is, you might not get the cash you’re looking for. So before you run and get the for sale sign, consider another option – renting.
Here’s what you need to know to play the rental game.
“If you’ve avoided this option in the past, know that renting your vacation home has never been easier or more convenient than now,” says Christine Karpinski, author of How to Rent Vacation Properties by Owner, Second Edition.
She says that vacation rental sites like HomeAway.com, VRBO.com and VacationRentals.com attract millions of vacationers each year, plus they provide great support to the homeowners who list their properties. “Not only do they make the rental process almost turnkey for you, they teach you how to avoid the kinds of rookie mistakes that lead to the horror stories you’ve probably heard through the grapevine – or at least, that you’re imagining now.”
Do the math
If you rent out your property only 17 weeks out of the year, the revenue you collect can pay your annual mortgage costs plus all other association rental bills. Rent it more than that you could even, gasp, make a profit.
FORGET THE MYTHS
They probably won’t trash the place. You’ve probably heard that renters will trash your property. Karpinski says this rarely happens though. Whether they find you online or go through a property manager, most vacationers understand that they’re guests in a private home. “They are likely to treat it more respectfully than they would a hotel room,” she says. Then too, if you, as the owner are in charge of renting it out, you scope out the rental candidates and if they don’t pass your muster, turn the business down. Karpinski recommends asking them questions about the length of their stay, the number of people, whether they will bring pets, and more. “No matter who you are renting to, take a security deposit and be clear about how the property should be left in order for them to get the deposit back after their stay,” she adds.
It cost a lot of money and it’s difficult to get the word out about your property. Hog wash, most people who sign on with a reputable listing site find that guests come to them, says Karpinski. A survey conducted through HomeAway, Inc. indicates that vacation homeowners who have taken the plunge to rent out their properties “by owner” find it very easy and inexpensive to do so, says Karpinski. For between $169-$550 a year, you can rent on VacationRentals.com, VRBO.com, or HomeAway.com, she says. “Most listing websites are worth their weight in gold,” says Karpinski. “They tend to be inexpensive and if you craft your listing carefully, you may find this is all the marketing you need to do. Just remember: There is no advertising more effective than word-of-mouth. Give your guests a great experience, and they’ll spread the word,” she says.
Property upkeep will be a nightmare. One of the most common excuses from non-renters is that the homeowners don’t want to be woken up in the middle of the night because their renters are locked out or because a toilet has overflowed. This problem can be solved by simply putting a good plan in place and by hiring the right maintenance and cleaning people in the city or town where your property is located. “To find the right crew, visit your property and introduce yourself to the staff working at the homes in your neighborhood,” suggests Karpinski. Ask around the area for recommendations and inquire about negative experiences as well. Once you have hired your staff, have a friend for family member stay at the property and evaluate the level of care they receive. Also, if you provide your renters with clear instructions on what to do in these situations, you can avoid most calls of this nature.
Once you take the plunge and start renting by owner, you’ll probably ask yourself why the heck you waited.
Kapinski offers this reminder, “You know how sometimes the things you dread and resist the most turn out to be the best decisions you ever make? Renting out a vacation home is like that for many people. It can actually be fund and rewarding. Your guests can become a second family of sorts and being able to bank an extra, 10, 20 or $30,000 a year can help cure what ails in this finicky economy.
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