The Second Home Muse

Renting Out Your Vacation Property

We've talked lots about the benefits of renting out your vacation home when you are not using it. So it pays for you to be up on what's available to help you. Here's the latest news about the Internet world of vacation rentals.

According to a recent article, there are a few big players coming up to support homeowners in listing their vacation rentals. We are neither endorsing nor not endorsing these, as we have our own rental business at EscapeHomes.com. However, we want to always live up to our promise to educate consumers. So here's latest:

HomeAway, in business for two hears, has just acquired VRBO (Vacation Rentals by Owner.) That's a coup!
Travelocity has a new partnership with LeisureLink Inc listing vacation condos and time-share units
Expedia has been listing vacation rentals since 2003, and also has B &B's
Hotels.com lists rentals that are managed by realtors

From what I see in the lay of the land, if you, the homeowner , want to be directly involved in the rental, HomeAway/VRBO still offers the best deal, (other than, of course, ourselves.) The most important thing to evaluate is the overall cost per rental contract, and the geographic reach that the service offers.

Our advice: do some comparison shopping first, and then make the best financial decision. For more information, read our library of articles on renting your vacation home.

Baby Boomers and Second Homes Revisited

There have been a number of articles back and forth about the issue of baby-boomers and their second home buying habits. A recent report had debunked the idea that they were buying more than the previous generation, saying that the 15% second home buyers over age 50 is the same percentage as 1992. This puzzled many of us, who do see boomers getting more second homes. An article in the Baltimore Sun gives the most useful explanation. They write, "Although, proportionately, no more boomers are relaxing at second homes than their parents did, sheer numbers are higher. The boomers are a huge generation -- about 78 million compared with about 63 million in their parents' generation."

I'm not so sure why people have been rushing to claim the boomers are not leading the way with second homes. It's not a helpful point. The Baltimore article goes on to give a clear  picture of what is ahead, from an investment point of view. They point out that the next generation is only about 44 million, so what will happen is that the second home market will decline later. They feel the next 10 years are great, and second home demand falls off between 2030 and 2035.  Now that's helpful information.

Vacation Home Satire

At the risk of getting fired (can a CEO really get fired from his own company), and with sincere hopes that no one gets offended,  I pass on a small bit of election humor re: vacation homes. We'll get back to real news when the election frenzy passes. Enjoy this excerpt  from a Satire site:

"Some candidates who lose may have to sell their vacation homes, if the worst-case scenario holds, an economic analyis shows. Without tax relief and federal subsidies, beach, mountain and lake houses may have to go," said the experts. Political analysts expect that if it does go the worst for the current party, major emergency legislation will be passed during the lame-duck session after the election to provide assistance to those hardest hit.

One bill reported to be in the works now, the Congressional Vacation Homeless Assistance Act, would help bail out any current members adversely affected by the electoral process."

Okay, I promise real news tomorrow.

Great Real Estate Leaders

In our era of specialization, it is refreshing to find at least one person who realizes that regardless of their specialization, all great people have wisdom. Recently, journalist Chris Taylor released a new book, "Passing It On: Life Lessons of 130 Great American Leaders." What is so unique is that the people in the book come from all industries, including the real estate field. Real-estate legends like Margaret Kelly of Re/Max, Jim Gillespie of Coldwell Banker, Dottie Herman of Prudential Douglas Elliman, and Pamela Liebman of Corcoran Group each contribute their advice to the future generation. They join the ranks of other leaders in caring that the next generation learn from the wisdom of the current generation.

Thanks, Chris, for a good book, and most of all, for looking further afield and including the real estate greats.

Perfection in Vacation Homes

When an successful interior designer gives tips on working with a second home, my ears perk up. However, be prepared...these tips are not about getting matching Gucci lamps (if there is such a thing...do they only make clothes?) or faux-fur throws. Instead, an article from the Sentinel Newspapers  give an entirely different slant. Designer Fhlipps bought a country home, and realized that "You have to learn to embrace the dinged, the dented. " Scratches, dings and the wear and tear of life can make a country home feel perfect, if you are willing to see the perfection.

He also shares some interesting tips about picking a vacation home. One that stands out is to find an environment totally different from your home. Great advice. Otherwise, the psycholoical 'get-away' doesn't really happen. And low maintenance furnishings make living on vacation, a vacation! Rather than scurrying around trying to keep everything perfect, leave that for your home. On vacation, how about just learning to chill! Thanks for the good advice, Fhlipps.

Tips for Sellers in a Buyers Market

One good turn deserves another. Thanks to Move.com for answering our plea for seller tips. They pointed us to a Naples article. Reading it made me smile. I have an editor who is always saying I need to put my 'spiritual/human" values before money. I read through the tips for sellers and thought perhaps it was written by a sage with a long beard sitting on a mountain top: Drop greed, get rid of ego, see things as they are, be disciplined, be generous with incentives. Wow. Sounds like selling your home in a buyers market is a straight ticket to enlightenment.

However, in all seriousness, it really is true that the basic values which make for a good life will also make it much easier to deal with so-called adversity; in this case, a buyers market. Take time to think about what you really want from your life, and use the sale of the home to further your dreams, not to postpone your dreams just to get a higher price. Then, everyone wins.

In terms of concrete tips, the most useful to me was about pricing realistically. If you ask 10 to 20% over what you will take in a normal market, the suggestion is to go 3-5% in  a buyers market, after you know what the others in your area are bringing in. Realistic pricing makes the whole process much easier for everyone concerned. Now, for enlightenment...

Vacation Homes as Business

I just read a paradoxical article. It was about an appeals court in Maryland deciding about the legality of renting houses in a subdivision that was trying to preclude vacation rentals, as far as I can gather. The subdivision is in a popular tourist destination in Western Maryland. What was odd was this: The court ruled that people could rent their homes to single families. However, its decision said that "...renting the homes did not constitute a commercial purpose, which would be prohibited by the subdivision’s covenant."

Seems to me that is a bit odd.  Surely getting rental income is commercial. When we file taxes, we have to file it under  a schedule C, ie, it is a rental property business. Our taxes change on the property, etc. So I wonder where in the world this court got their opinion. The paradox: I"m happy to see vacation rentals upheld, but sad to see them upheld in a way that won't stand up to scrutiny. Comments, anyone?

Housing Market Forecast

You have to hand it to David Lereah, economist for the National Association of Realtors. He's not afraid to go out on a limb. I guess that's what comes with being the one most in touch with numbers and facts, instead of fears. A New York business article reports that at a recent conference, Lereah forecast that the housing market will rebound in three to six months in places that weren't overheated to start with. Of course, that gives him some wiggle room, but still, it's an interesting observation. His claim is that the further the prices drop, the more buyers want to get in, creating an upsurge in the market.

I like his optimism, but even more, I liked a quote from the conference by a New York realtor, saying, "This isn't a new market. It's a regular market that we haven't seen in a few years."  For those who are new in the real estate scene, that point of view is well worth remembering... we've been here before, and we'll be here again. As my local teen would say, Chill...

Vacation Rental Rules

It's always been a grey area...does renting your second home as a vacation rental mean you are a commerical enterprise? In one California vacation spot in the San Bernadino mountains, the town council has said yes, and has created rules for the rentals that make the owner be as responsible as commercial B&B's, for example. Their recent ordinance says that vacation home rentals need to obtain permits and be inspected every two years. The regulation "includes limits on the number of guests and permitted parking areas as well as provisions for trash collection, snow removal and lighting."

The mountain area around Big Bear Lake is a popular vacation spot, and yet the long-term tenants are concerned about the short-term renters that come and go. Actually, from the point of view of the second home owner, being able to state that your home meets county standards is probably a very good thing. It can create a comfort level for the propective renter, which in turn increases your ability to rent. My sense is that San Bernadino has found a way to make everyone happy...not being too restrictive, but also, not ignoring the realities. Good for them!

Read more articles about renting your vacation home

Hot Tubs are In

Just back from an extended vacation, I was delighted to get this tip from written up by Tom Kelly in LA. Did you know that if you have a hot tub in your vacation home,  you can get almost $14,000 more in rental income each year. It makes sense, doesn't it. After all, there's no season for hot tubs... people love them all year round. Plus very often, it's something one doesn't have in their primary home.

But don't worry about changing your criteria for buying a second home. It's not like it has to have one already. They are pretty easy to add, and most likely will pay for itself in the first year of rentals. But do keep it on your 'upgrade' list when you do get that second home. And most important, don't forget to tell everyone you have one. There, now you know something new.