What investment could bebetter than one that letsyou spend several weeks ayear in your own vacationhome? Many vacation homeowners payfor their properties by renting them, butthe details can seem daunting—findingrenters, dealing with damages from 200miles away, etc. Don't give up on yourdreams yet. If you do this on your ownand cut out property management companies,you'll not only break even on yourmortgage, but also make a tidy profit.
How to Rent Vacation Properties by
Owner: The Complete Guide to Buy,
Manage, Furnish, Rent, Maintain and
Advertise Your Vacation Rental
I compiled the following key tips from($26.00; Kinney Pollack Press;2004), which should help physician investorsdeal with rental investments:
•Aim for the magic 17 weeks. Ifyour monthly mortgage payment is lessthan or equal to one peak week rentaland you rent approximately 17 weeks peryear, you will break even on the cost ofyour property. Usually there are 12 peakweeks in a rental year. So, if you rentthese 12 weeks, you will have enough revenueto pay your mortgage payments forthe entire year. Your earnings fromapproximately five off-week rentals willpay other costs (eg, phone, power, cable,and association dues).
•Have a good landlord-tenant relationship.One of my most frequentlyasked questions is, "What recourse doyou have when a renter trashes yourplace?"Befriend your rentersand they'll return the favor. When someonecalls to make reservations, take theopportunity to connect with them on apersonal level. This is another goodreason to cut out the middleman.
I like to talk to each renter, beingfriendly and personable, and let the rentersknow that they are renting my secondhome. By establishing this relationship, therenters have now transcended from customerto friend. If you stay in a hotel andspill coffee on the carpet, what do you do?If you rent a friend's place, how differentlywould you handle that spilled coffee? Myrenters take care of my unit.
•Lessen the hassle of long-distancemaintenance. You can either hire a maintenancecompany, paying them a monthlyfee to have someone on call, or you canhandle problems yourself. If you'refriendly with your renters, they'll doquick-solve maintenance themselves andyou'll most likely never hear about it. Myrenters know I live 400 miles away, sothey don't call me for minor maintenance.Other issues such as a broken washingmachine or leaks from the unit above arethe real hurdles. I simply call a repairperson.I compensate the renters for anyinconveniences by either refunding a portionof the rent or giving them a percentageoff their next stay. Preventive maintenanceis the best way to avoid problems.
•Rely on the Internet to findrenters. There are hundreds of Web sitesthat are devoted to listing vacation propertyrenting by owner. They are prettyinexpensive to list your property—onlyaround $150 per year. It's like a classifiedad that you take out on the Internet. Ihave found listings on three to five sites tobe 100% effective in renting my places.
•Use effective words when writingyour description. Some of my favoritevacation property descriptors for adsinclude the following: clean, peaceful,romantic, spacious, classic, cozy, private,inviting, rustic, warm, and secure. Thefollowing aren't effective: beautiful, nice,spectacular, and magnificent. Thesewords are so overused—especially intitles—that they don't have any impact.
•Consider accepting pets. Vacationproperties that accept pets increase theiroccupancy by 10% to 50%. It's also agreat way to increase off-season rentals.When you accept pets, it's okay to take anadditional $20 to $25 per night or $140 to$175 per week. That's enough money toget the carpets cleaned each time, or rent 8to 10 weeks and you have enough moneyto replace the carpeting. If people have adog they want to take with them, chancesare that it's not the kind of dog that causesa lot of problems.
•Locate good help. You'll almostcertainly need to hire a cleaning service.Visit your property on a weekend and gooutside when renters are checking out.Your neighbors probably have a cleaningservice. Talk to them and see if theywant to pick up a side job. You couldstagger your checkout time so they canclean both. Another good resource forhousekeepers is your local congregation.It pays to be resourceful.
•Organize your time. If you're goingto balance practicing medicine, takingcare of a family, and managing properties,you'll need to develop a system.Here's how my time is spent: Throughoutthe year, I usually spend 5 to 15 minutesper day responding to e-mail and voiceinquiries. The busiest time is fromJanuary 1 to March 31, when I mayspend an hour or so e-mailing and calling.This is when I make 80% of the bookingsfor the whole season. After I'm booked(generally by April 1), I spend approximatelya half-hour per week sendingdirections and mailing deposit refunds.Four times a year, I spend 30 minutes fillingout my sales tax forms. I also factor inone or two trips to the bank per week tocash the rental checks.
You might want to consider asking fora little help. Hire someone part-time totake on a portion of your workload (eg, anoffice employee, spouse, teenager, orretired friend or family member). It willcost far less than a rental middleman.
Renting by owner isn't for everyone.There are risks, but this is true about anynew endeavor. Along with the risks comelearning experiences, personal growth,new friendships, and financial rewards.
According to the National Associationof Realtors, the average annualincome of second homebuyers last yearwas $77,000. That's pretty solidly middleclass. Arm yourself with the informationyou need to determine whether vacationownership is right for you.
How to Rent Vacation Properties by Owner: The Complete Guide to Buy, Manage, Furnish,
Rent, Maintain and Advertise Your Vacation Rental Investment
Vacation Rental Organizer
Christine Hrib Karpinski is a stay-at-home mom who successfullyowns and rents her own vacation homes. She teaches seminars tovacation property owners, investment advisors, and realtors aboutthe benefits of vacation home investing. In additionto , Ms. Karpinski also wrote ($19.00; Kinney Pollack Press; 2004). She welcomes questions orcomments at firstname.lastname@example.org, or visit www.howtorentbyowner.com.