Renting A Vacation Home
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(If you have a vacation home that you do not use in winter months, and you want to rent it out, there are many things to consider. )
First you must decide if you are going to be the landlord or if you are going to hire a property management company. This is a big decision to make, since there are a lot of factors to keep in mind.
If you live far away from your vacation home, you may find it difficult to be the landlord of a property that is thousands of miles away, but there are ways to work around that small detail.
A November 1, 2006 article by Amy Gunderson of The New York Times, “Playing Landlord,” looks into the options that homeowners have when renting out their vacation home.
The story starts out with Elizabeth Wood, who owns a four-bedroom vacation home in Florida and used to have a real estate agent find tenants for her property, and basically act as the landlord, collecting rent and so forth. She also had her home listed on several renting websites and soon found that her agent was not bringing in any tenants, the listings were, so she decided to take over the property management herself.
“Ms. Wood soon took the path that many vacation homeowners are following and parted ways with her agent in favor of managing the rental on her own. She lists the house on several rental sites, including VRBO.com, CyberRentals.com and VacationRentals.com, and handles leases by e-mail from her home in Connecticut. She collects rent money before the tenants arrive, and relies on two local women who clean her house to be the first line of defense for any problems. And so far, business hasn’t suffered. ‘The whole winter is pretty much booked up,’ she said.”
Of course, tenants can cause a variety of problems for their landlords, so it is best to know what you are getting yourself into before taking on such a major responsibility.
If you are not opt to fixing a clogged toilet in the middle of the night, or hassling tenants for rent money, then a property management may be a better choice for you.
“Some homeowners opt to hire a local property management company to find the tenants, collect their money and then clean up after they depart for fees that amount to anywhere from 20 to 50 percent of the gross rental income. But there are alternatives to paying full price at a rental agency, from doing it yourself, working with your neighbors and even negotiating to trim the commissions.”
One way to trim the commission you give to a property management company or rental agency is to find the tenants yourself.
“Randy Egan bargained with his rental management company that he used to rent out his three-bedroom house on Marco Island, Fla., and secured a cut-rate commission. If Mr. Egan brought in the rental lead, which he often did by way of advertising the house online, the agency’s 20 percent commission was trimmed to 10 percent. Eventually he was earning a five-percent commission by passing along other leads for renters to the agency, if his house was already booked for a requested week.”
If you live far away from your property, another good way to avoid paying commission to an agency is to have the cleaning people, pool company or neighbors keep an eye on the house when you are not in town, instead of hiring a company to do it for you.
