Making Money On a Vacation Home
I’ll just buy a condo on the beach, and rent it out for $700 a week, and then I will be rolling in the money.” WRONG! Although you can make some rental income on a property, seldom will you make a huge profit, or any profit at all. There are many factors to consider.
Make sure you can afford the payments, utilities, insurance, and upkeep when it is not rented.
In the southeast U.S. there are many attractive places to have a condo, or home on the beach. However, that beach property is only in season as a rental certain times of the year. The rest of the time you just pay.
-There are monthly condo fees, that go on whether it is being used or not.
-Mortgage payments continue on.
-Utilities to some degree continue.
-Rental agency fees are deducted from rental income.
-Cleaning fees.
-Repair and upkeep costs.
-”Mother Nature” blowing plans to rent for that period.
-Insurance fees
The last one is a big one. After every major storm, insurance fees triple, or even higher for the beach areas. Your profit disappears. If you are in the mind set of purchasing a place because you will be retiring there some day, and you just want to rent it out to help a little with the payments until then, it may be a good idea. Just be cautioned of the business expenses that will be involved. Do not cut yourself too short, in order to allow for the expenses, and non – rental times. Read more
Seven Secrets To Successful Vacation Rentals by Owner
1. Screen Your Renters: It is important to know as much as possible about the party that will be staying in your home. Find out as much as you about your potential renters. Ask lots of questions. The more you are informed, the better choices you will make.
2. Get References: Ask your renters if they ever rented in your area. Don’t forget to check their references. If they do not have any from vacation homes they have rented, perhaps they can give you the name of their current or past landlord.
3. Deposits: Get a security deposit with enough value that your renter will want to keep your place clean and damage free. If there is enough at risk, they will not want to take any chances of losing it.
4. Rules Agreement: It is important to send a rules agreement for the renters to sign at the same time they are signing a renter’s agreement. By doing this, they will know upfront what is expected of them. And, it gives them a way out if they don’t agree with your expectations. Read more
How to Manage a Vacation Home
Do you need it
Absolutely. I have a friend with a second home in Idaho. They have a beautiful home on a small ranch that is for Christmas and summers. Its a short hop from northern California and its a beautiful state with inexpensive land values. They got a lot of land, great views and space for a very affordable price….at least to us Californians!
After being away from the ranch for most of the winter, the family arrived only to find that there had been a leak in the kitchen which had dripped for many months. Well, you can imagine the damage. The leak had wended its way from the P trap below the kitchen sink to flood the lino floors. It then slowly worked its way into the hallway and the floor boards of the first bathroom. The damage was extensive.
The Damage
First the lino had begun to lift up and the floor boards below were wet and molding. The lino had to be removed and the floor boards had to dry. Then a mold cleaner was professionally applied by a local company to be sure the family wasnt exposed.
Then the floor boards in the hallway had to be replaced because they were thoroughly wet and moldy. They would no longer lay flat and simply had to be pulled up and new boards laid down.
The entire house had a wet damp smell that would not go away. A wonderful family experience was ruined because they did not have anyone watching the home during their long periods of absence Read more
From Vacation Property to Getaway – Staging for Guests
When done well, preparing your vacation property for rental is an art. Lots of people do it, but if you are one of those people who do it with style you’ll see bigger and better returns, especially in a busy market. Like staging a home for sale, with a little effort you can create an inviting environment for your renters.
The first thing to decide is how often and how long you plan to rent your place for. If you use the property for part of the year (e.g. you holiday every summer) you may want to look for longer term tenants. Choosing longer term tenants will save you money for cleaning fees, but the wear and tear may go up. In a longer term situation you may choose not to furnish your property, although you will probably get a better rate if you offer it at least mostly furnished. That said, with longer rentals (more than a month) you are more of a landlord than a host.
If you are going to be renting on a nightly, three-night minimum, or weekly basis, you should consider yourself a host who will play a large role in determining your guests’ experience. You need to give more attention to presentation and details.
Furnishing the property is an art in itself. Think about the type of crowd you want to attract – a tastefully decorated apartment with quality furnishings will draw a higher price than something that is mis-mashed together (unless you have a real knack and can pull off the flea market/Boho chic look). There are many average vacation suites available – why not make yours stand out? Choose interesting color schemes – color appeals to people. Neutral paints may seem more attractive, and are generally a good choice, especially in rooms with less light (although they do show dirt, so make sure you have a good cleaner). But don’t be boring – choose a bold accent wall or bright accessories to liven things up. Look at decorating magazines or hire a professional designer to help you. Read more
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