by: David Leonhardt
It's a dream I've heard so many people express: "I want to run a bed and breakfast. They are so cute" Or "I want to own a vacation rental property, so I can get a free vacation and make money the rest of the year.
But what is really involved in being a vacation landlord? Is it a business that is right for you. I asked 9 vacation rental owners for their advice to would-be vacation rental owners.
"Can you afford the mortgage if your home is not rented at all?" asks Stewart Granville, owner of an Orlando Florida vacation homes listing site ( http://www.lastminutevillas.net ). "If interest rates rise (which they almost certainly will) can you still afford the payments along with the utilities ,taxes, insurance, management fees ,pool cleaning ,lawn maintenance ,running repairs – can you still afford it?"
That is an obvious, but often overlooked, factor. Before rushing into a purchase, make sure that it does not get repossessed if somehow your marketing is fruitless at first. Paul Rowney agrees. Owner of a 4-bedroom Florida Gulf Coast vacation rental ( http://www.lastminutevillas.net/villa/181/ ), he says to be wary of "realtors who promise you'll rent your property for 40 weeks a year." It helps to do your homework. Is there already rental saturation in the area you want to buy in, or are people already lining up for too few vacation homes?
"You can't get too personal with your home if you are using it for renting - you have to think what your client wants," warns Michelle Prince, owner of Secret Key Villa ( http://www.lastminutevillas.net/villa/166/ ) in Kissimmee, Florida. That means your ideas of the perfect bright red-orange kitchen might have to be shelved if your customers have more subdued tastes.
Andrew Piper, owner of a 5 bedroom vacation rental villa ( http://www.lastminutevillas.net/villa/332/ ) advises not to expect that all your friends are a market waiting to rent your vacation home – they are more likely going to hope for a freebie, staying silent if they are too embarrassed to ask. Remember, owning a vacation rental is a business, or else it becomes a very expensive cottage.
Of course, when it comes to decor, you can't please everyone. Sue Evans, owner of an Orlando luxury villa ( http://www.lastminutevillas.net/villa/276/ ), does not enjoy "having to read emails from people saying they don't like your decor or want to stay at your property for peanuts." You need a thick skin to own a vacation rental property.
Christine Creasey, owner of the Florida Golf and Disney Villa ( http://www.lastminutevillas.net/villa/65/ ), reminds potential vacation rental owners how time consuming it can be to look after the property, especially if you organize your own rentals. "Make sure you know who is going to manage your home in your absence," she advises. Running a full-fledged bed and breakfast is even more time consuming, requiring much longer hours than an office job, and probably hiring staff to help you manage.
Neil Thornton, owner of a 4-bedroom executive villa ( http://lastminutevillas.net/villa/335/ ) in Orlando, Florida, warns about the grief caused by hurricanes, a common occurrences in the tropical climates where vacation rentals are most popular. "Can you be 5000 miles away, knowing there are guests in your villa, there is a hurricane approaching and all the power lines and telephones are down. What do you do?" asks Dave Gordon, owner of Lindisfarne Villa ( http://www.lastminutevillas.net/villa/89/ ).
Perhaps the most obvious advice comes from Lesley and Gerry Heane, owners of Our Dream Villa ( http://www.lastminutevillas.net/villa/15/ ) south of Walt Disney World: "Always check out the area and the site of the Villa." It goes without saying, but I have seen too people kick the tires on a car but never try driving it before buying – and I am sure it is the same with vacation rental properties, especially since they are so often so far away.
What all these vacation rental owners are saying boils down to knowing what you are buying, what it could cost you and being prepared before you buy. Every one of them enjoys owning vacation rental property, but many people jump in too soon, only to realize that this is not the place they want to be.
Before you jump in, make sure you really want to own a vacation rental. If you do, I wish you many years of success and pleasure.