Vacation Home Rental-By-Owner Tips
07.10.2009
In: World travel news
Renting your vacation home without the help of a property management company could save you as much as half your rental income.
Christine Karpinski, a self-taught Atlanta, GA vacation property owner who runs a growing vacation property rental business on the Florida panhandle, says property managers in her area charge from 40 to 60 percent to manage vacation rentals and along the Florida coast it's 30 to 45 percent.
"They are going to nickel and dime you and it's insane," says Karpinski, who is also a Web site publisher, instructor and author of "How to Rent Vacation Properties by Owner: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment"
(Kinney Pollack Press, $26), which provides other tools for vacation property owners who want to rent profitable vacation homes.
In a recent interview, she also said, while cutting out the middleman is a great start, there's more work vacation property owners must do to reach profitability.
She offered the following tips:
Strive for the 17-week "sweet spot" by renting your property for a minimum of 17 weeks each year. If your property's monthly mortgage payment (including principal, interest, taxes and insurance) is less than or equal to one peak season weekly rental, and you rent approximately 17 weeks per year, you will break even on the cost of your property. The rental income will give you 12 monthly mortgage payments, plus an amount equal to about five more monthly payments to cover the costs of utilities, homeowner association dues, maintenance, upkeep and the like.
"It's a formula I came up with and it seems to work if the property costs $5 million or $60,000," said Karpinski.
Also, limiting the rental period -- even if you rent for 20 to 25 weeks to give yourself some extra income and financial breathing room -- leaves less wear and tear on the property and leaves you with plenty of time to trade your property with other investors for your own vacation elsewhere.
"I've traded my properties a zillion times," Karpinski said.
Make friends with your renters. Karpinski says renting yourself gives you time to get to know your renters and to let them know you are renting your home. Getting to know renters and letting them know you establishes a rapport that transcends the traditional customer-business relationship.
"I am friendly and personable, and I let the renters know that they are renting my second home. If you stay in a hotel and spill coffee on the carpet, what do you do? But if you rent a 'friend's' place, how differently would you handle that spilled coffee? My renters take care of my unit," she said.
Don't hire a management company just to get maintenance services. Hire a maintenance company for less and pay them a monthly fee to have someone on call. If you live near enough, handle the problems yourself. Also, provide some basic maintenance tools for travelers.
"I don't have a special clog-proof toilet, but I do have a plunger and I think that the renters just use it. Other issues, such as a broken washing machine, electrical problems, or leaks from the unit above (all which have happened to me), are the real hurdles. I simply call a repairman. The renters or my cleaning service let him into my unit and the work gets done," she said.
Be prepared to compensate travelers for any inconveniences by either refunding a portion of the rent or giving them a percentage off their next stay.
"Preventative maintenance is the best way to avoid problems," she added.
Likewise, don't hire a property management company just to get cleaning services. Hire a cleaning service. A good way to find a company is to visit your property on a weekend when most renters are checking out. If your neighbors have hired a service, ask them if they want to some additional and conveniently-located work. Stagger your check-out time so the company can clean your place when they are in the neighborhood.
Use the Internet to make it easy for guests to find your property. Vacation rentals by owner is a growth industry, thanks in large part to the Internet, which not only gives owners a place to rent, but also makes it easy to search quickly, get a look at the unit inside and out (with online photos) and to contact the owner. One of the best starting places is the independent International Real Estate Digest which lists both vacation homes and
timeshares. You can also Google around for
websites that host vacation rentals by owner. For the uninitiated, that means going to Google.com (or any Web search engine) and searching
for vacation rentals services.
"I have found that listing on three to five sites to be 100 percent effective in renting my places," said Karpinski.
When writing your listing description, use words that get results. "Clean, peaceful, romantic, spacious, classic, cozy, private, inviting, rustic, warm, secure/security, and well-appointed," are Karpinski's favorites.
"You'll notice that 'beautiful, nice, spectacular, and magnificent' were not on my list," she points out. "These words are so overused, especially in titles, that they just don't have impact. Use them sparingly," she said.
Other experts suggest describing something unique, unusual or special about your property to set it apart.
Consider accepting pets. Vacation properties that accept pets increase their occupancy by 10 to 50 percent, because many traditional types of accommodations don't. The tactic is also a solid off-season strategy. Collect an additional $20 to $25 or more a night or $140 to $175 a week for enough cash to get the carpet cleaned after each pet owner visit. After eight to ten weeks, you could also have enough to replace the carpet, said Karpinski.
Christine Karpinski, a self-taught Atlanta, GA vacation property owner who runs a growing vacation property rental business on the Florida panhandle, says property managers in her area charge from 40 to 60 percent to manage vacation rentals and along the Florida coast it's 30 to 45 percent.
"They are going to nickel and dime you and it's insane," says Karpinski, who is also a Web site publisher, instructor and author of "How to Rent Vacation Properties by Owner: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment"
(Kinney Pollack Press, $26), which provides other tools for vacation property owners who want to rent profitable vacation homes.
In a recent interview, she also said, while cutting out the middleman is a great start, there's more work vacation property owners must do to reach profitability.
She offered the following tips:
Strive for the 17-week "sweet spot" by renting your property for a minimum of 17 weeks each year. If your property's monthly mortgage payment (including principal, interest, taxes and insurance) is less than or equal to one peak season weekly rental, and you rent approximately 17 weeks per year, you will break even on the cost of your property. The rental income will give you 12 monthly mortgage payments, plus an amount equal to about five more monthly payments to cover the costs of utilities, homeowner association dues, maintenance, upkeep and the like.
"It's a formula I came up with and it seems to work if the property costs $5 million or $60,000," said Karpinski.
Also, limiting the rental period -- even if you rent for 20 to 25 weeks to give yourself some extra income and financial breathing room -- leaves less wear and tear on the property and leaves you with plenty of time to trade your property with other investors for your own vacation elsewhere.
"I've traded my properties a zillion times," Karpinski said.
Make friends with your renters. Karpinski says renting yourself gives you time to get to know your renters and to let them know you are renting your home. Getting to know renters and letting them know you establishes a rapport that transcends the traditional customer-business relationship.
"I am friendly and personable, and I let the renters know that they are renting my second home. If you stay in a hotel and spill coffee on the carpet, what do you do? But if you rent a 'friend's' place, how differently would you handle that spilled coffee? My renters take care of my unit," she said.
Don't hire a management company just to get maintenance services. Hire a maintenance company for less and pay them a monthly fee to have someone on call. If you live near enough, handle the problems yourself. Also, provide some basic maintenance tools for travelers.
"I don't have a special clog-proof toilet, but I do have a plunger and I think that the renters just use it. Other issues, such as a broken washing machine, electrical problems, or leaks from the unit above (all which have happened to me), are the real hurdles. I simply call a repairman. The renters or my cleaning service let him into my unit and the work gets done," she said.
Be prepared to compensate travelers for any inconveniences by either refunding a portion of the rent or giving them a percentage off their next stay.
"Preventative maintenance is the best way to avoid problems," she added.
Likewise, don't hire a property management company just to get cleaning services. Hire a cleaning service. A good way to find a company is to visit your property on a weekend when most renters are checking out. If your neighbors have hired a service, ask them if they want to some additional and conveniently-located work. Stagger your check-out time so the company can clean your place when they are in the neighborhood.
Use the Internet to make it easy for guests to find your property. Vacation rentals by owner is a growth industry, thanks in large part to the Internet, which not only gives owners a place to rent, but also makes it easy to search quickly, get a look at the unit inside and out (with online photos) and to contact the owner. One of the best starting places is the independent International Real Estate Digest which lists both vacation homes and
timeshares. You can also Google around for
websites that host vacation rentals by owner. For the uninitiated, that means going to Google.com (or any Web search engine) and searching
for vacation rentals services.
"I have found that listing on three to five sites to be 100 percent effective in renting my places," said Karpinski.
When writing your listing description, use words that get results. "Clean, peaceful, romantic, spacious, classic, cozy, private, inviting, rustic, warm, secure/security, and well-appointed," are Karpinski's favorites.
"You'll notice that 'beautiful, nice, spectacular, and magnificent' were not on my list," she points out. "These words are so overused, especially in titles, that they just don't have impact. Use them sparingly," she said.
Other experts suggest describing something unique, unusual or special about your property to set it apart.
Consider accepting pets. Vacation properties that accept pets increase their occupancy by 10 to 50 percent, because many traditional types of accommodations don't. The tactic is also a solid off-season strategy. Collect an additional $20 to $25 or more a night or $140 to $175 a week for enough cash to get the carpet cleaned after each pet owner visit. After eight to ten weeks, you could also have enough to replace the carpet, said Karpinski.