Renting your vacation home? Beware the Dark Side
Filed under: Make Money Fast, Extracurriculars, Real Estate, Health, Recession
Renting out a vacation home is a growing and largely unregulated industry. Pop the place up on Craiglist and a homeowner is in business. The National Association of Realtors reported that the number of second-home owners renting out their properties has increased from 18% in 2006 to 25% last year. And property management companies say that number has risen as the economy has slowed.I understand why. My husband and I own a second home on Lake Erie and the cost of paying the non-homestead taxes and keeping it heated and cooled has soared in the last couple of years. Finding a tenant willing to pay big bucks (or even little bucks) to use it on the weekends we aren't is appealing.
But renting out a vacation home and keeping fun-seeking tenants pleased is no day at the beach. My husband still complains about the beds in the house we rented near Disney World three years ago so we could gather all 17 of us for a Mouse Ears Christmas.
The bed springs stuck through the tops of the ancient mattresses. You had to position yourself carefully, otherwise, when you rolled over, you'd get a puncture wound.
Then there was the lake-front place we rented near Michigan Speedway that smelled like rotten eggs and Valvoline.
And the house in Atlantic City whose owners boasted that it had a "breathtaking" view of the ocean. Well, you were certainly out of breath by the time you climbed three flights of outdoor stairs to the rooftop porch where if you leaned way over the railing, past the neighboring house, you could catch a glimpse of waves a quarter-mile away.
After all this renting from other people, I think I'm not up to the task. It's clear to me that most part-time landlords don't have what it takes to be an innkeeper. I can overlook my vacation home's foibles but I wouldn't be so understanding if the place belonged to somebody else.
Plus, doing the job remotely -- like so many part-time landlords do -- makes the job even tougher. For the last several years, my long-time friend, her 99-year-old mother and I have rented the same condo on the beach in Florida from an owner who lives in Minnesota. Last year, we showed up and the cleaning people hadn't been there. The dirty sheets were piled on the floor. Every dish in the place was in the sink, and the bath -- well, we won't talk about that.
Moving a 99-year-old elsewhere was out of the questions, so after several conversations with the landlord in Minneapolis, he agreed to refund 25% of our rent for the week if we'd be our own cleaning staff. We were still up at midnight scrubbing dishes and making beds. This year, we're staying elsewhere.
When things aren't perfect, appealing to my sympathies doesn't work. This holiday season, I've signed a contract to rent a ski-in and ski-out house for ten of us. In the course of explaining away a small problem with the property, the owner made the mistake of telling me that it saves him 40% to rent to me directly as opposed to going through the real estate office at the resort where we're headed. So, I've cheerfully held him up for my cut of the savings and insisted that he fix the issue.
Here are five other things besides "Honesty isn't always the best policy" that I've learned from renting holiday homes directly and would put in place if I ever become a lake-front landlady.
▪ Install Internet access. It's cheap and persuasive.
▪ Consider accepting pets. Pet lovers will love you.
▪ Make ever sofa a bed. You can never have too many places for people to sleep.
▪ Have a website with lots of pictures -- photos are enticing and reassuring.
▪ Don't nickel and dime the guests. Heating the pool is a business expense and so is hiring a cleaning team.
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Reader Comments (Page 1 of 1)
11-12-2008 @ 2:39PM
DALLAS said...
I once had a friend that said " when traveling, you should always go first class. It doesn't cost anymore,you just can't stay as long"
He also commented that his travel lodging had to be as good as the house he lived in. If not,what's the point in leaving home?
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11-12-2008 @ 3:18PM
karen said...
Our family rents a house every year for either a long weekend or a week. So far, we've only been disappointed once, and it was definitely a bed issue. Owners need to try out the beds themselves and see if they could sleep in them. We had one that only had a sheet of foam on it. Also no propane in the gas grill. I guess you just take your chances. We will continue to rent from absentee owners and keep our fingers crossed.
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11-12-2008 @ 3:51PM
beachlady said...
I am in the business of renting vacation homes and can sympathize with the poor guests who arrive, only to find their vacation home in total disarray. That's unacceptable. My town adopted a "short-term rental ordinance" which mandates long distant landlords must have a local agent to oversee the maintenance of the property. Clean is, and always has been, my highest priority. There is a maximum occupancy law so even though the writer suggests making every sofa a bed, would you really want 20 people staying in the 3 bedroom home next door to you? As for pets, too many people have allergies, it's hard to control barking when the guests are gone and it takes my cleaning staff twice as long to clean. Sorry, Fido!
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11-12-2008 @ 7:56PM
Irish said...
My ca coastal city is in the process of establishing an ordinance governing vacation rentals and i'm likewise in the business. I would love to see what you have. We haven't gone to the council yet and will have to be approved by the coastal commission of course. Cleaning fees are paid by the buyer up front and are mandatory in our company. Beds and furnishings are never misleading and usually seen in advance personally but definetly on our website. If they hate the place on arrival we do our best to relocate them. Given the large number of units we manage the number of problems we/ve had is miniscule - less than 1%. Often we don't realize something isn't working unless a tenant tells us. In that situation we are grateful to find out so it can be repaired . An ounce of prevention has always been worth a ton of cure.
11-12-2008 @ 4:39PM
GIGI said...
I'm in the business of renting vacation properties in South Beach.
I rent mine plus 2 other apts. that belong to friends of mine,and after 3 very successful years I can say with confidence that,while some of this article's suggestions,like proper advertisement and good bedding,the dogie must stay home.
most condo's like mine (it's a condo Hotel) have pet restrictions,not to mention dander which remains in the furniture causing allergies to some.
Next,the issue of having a local service which will be there in case of emergency is the most important of all,as in my case,my service has been known to show up at 3 am after someone lost the key at a club.
While I agree that many things are business expenses,I charge (as do most owners) a small cleaning fee because I simply cannot rent the same apt. the Hotel is renting in the same building for a third of the price and make any money.Sorry but you just can't.
After replacing linens and cutlery and glasses,paying my maintenance fee etc.there is very little left. I have found out that people use the white towels I provide to remove black make up which does NOT come out,not to mention leaving them at the pool etc.
So the cleaning fee is a must.
try being on this side and you'll see that customer service IS paramount but it comes at a price to us the owners.
My promise to the renters is simple,I will provide you with a clean,beautiful apt,with new furniture and comfortable beds,but just enough beds to fill my max. occupancy,after all,I'm not running a tenement,and I don't want 8 people in an apt. that sleeps 4. my high return guest percentage tells me I'm doing something right ,and by the way I have never had anyone complain to me about the cleaning fee,ever!
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11-12-2008 @ 4:45PM
Kathy said...
I rent my several vacation homes. I make it my business to make sure they are clean and nice. I also make sure that the furnishings are as nice as what we have at our full time home - after all these are our vacation homes and we want guest to come back. Guest treat the home as well as you treat the home.
My guest book and the rate of return guest tell me I am doing something right. I hate to see articles like this giving us all a bad name!
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11-12-2008 @ 4:55PM
Beryl said...
We've rented vacation homes in Florida for the past 7 years, and we have never been disappointed.
ALWAYS rent through a rental agency that is local to the place you stay, that way if anything is out of wack they can be there in flash to fix.
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11-12-2008 @ 7:48PM
Pam said...
We rent our own luxury properties located in beautiful Newport Beach CA. We are able to accept dogs (no cats sorry) because we use custom quality slipcovers (white for bleaching) on high end furniture and are able to clean often (weekly if necessary). We can also change out the decor fairly often by simply changing pillows by using white which is more airy and beachy. Of course, slipcovers would not work for most
homeowners as there is a LOT of extra work and expense involved and those that do not live in the area may not have the people to properly oversee this.
Our floors are solid surfaced...distressed hardwoods, travertine, or limestone that makes cleaning easier from beach living, children, and dogs.
We learned from our own experience from a B and B that not all beds are equal or changed out as often as necessary. We both kept rolling to the middle! Our beds are all new/newer and are of the highest quality hotel pillow-tops.
We also charge a minimal for cleaning and are well known for our cleanliness.
Our guests have come to expect a certain level of quality that we provide. That sets us apart from others and keeps bringing them back.
Check us out at: http://www.casadebalboa.com
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11-15-2008 @ 11:44PM
Alice Brown said...
Please be careful of bait & switch rentals. Rented a house on Newport Beach 6 months before vacation. 13 days before I was to go I was told the house was sold . They tried to give me an old home that was not suitable to stay, in for the same price.
My son lives there and went to see both properties. He went to city hall and found out this house was never for rent. We searched the real estate records and found out it was not sold at the time they said. I contacted Attorney Generals in my state and Ca. Nothing could be done . Sent documents to real estate control board . They have no control over vacation rentals.
BBBsaid I would have to go out there and file a Law suit.
I lost almost $2ooo. By the time I would hire an attorney and have to go there again it would have been more costly .After trying to pursue this for about a year I finally gave up.
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11-12-2008 @ 8:40PM
Pam said...
Alice,
Sorry to hear of your issue with (I am assuming) a local realtor with vacation rental listings. Again..we manage and own our own properties. If you did not stay and the property that you agreed in writing to rent was cancelled by them...I do not understand how they legally could have retained your deposit??? I am curious to know the details.
By the way..I get plenty of calls from people that rented from both realtors and homeowners on popular sites that have had the same thing happen...told the house was sold...they did get their money back ..but had to scramble for a new rental. Usually it is too late to find anything of quality (we have been booked every time I got a call)..especially if it is for peak times.
Read reviews from actual guests. Also check for calendars. Chances are if the property does not provide both (if available on sites) than there may be some issues.
Of course...word of mouth is the best!
11-12-2008 @ 8:00PM
John said...
I've rented a vacation home in Hawaii and 3 in Key West. All were as described. Infact the house in Hawaii was nicer than the pictures showed. One house in Key West had too many annoying signs (one lamenated and on the shower wall) advising us of the high utilities cost in the Keys. "Take short showers, try not to use the a/c, turn off lights". Gimme a break. For what I paid, that a/c ran night and day.
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11-12-2008 @ 8:08PM
Dorine said...
Be careful when Renting in Wellfleet Ma. We rented there this summer and the owner kept our security deposit saying we did not leave the place as clean as the house rules. We left it cleaner than we found it. We bantered with her for a while and then decided she needed this money more than we did. I think this is a scam she pulls all the time to keep peoples deposits.
she said we left a mop on the deck. It was there when we got there. She seemed unreasonable and unstable and I was happy
to be rid of her. Take pics of before and aft. Rent with care.
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11-12-2008 @ 10:46PM
Tom said...
We rented a place that advertised a coastal view. The only problem was that you had to look over the balcony and stretch your neck to see the ocean. The picture on the web site showed a panoramic view and was taken from a different condo at the same facility. It was very deceitful and I was very angry after traveling 1/2 way across the US to have a long awaited vacation.
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11-13-2008 @ 12:28AM
Ali said...
There was a clause in the contract that said if the home
became unavailable they could replace it with something equal.
They sent the contract to my work and said I had to reply within 24hrs. Was under a lot of pressure at the time and probably thought this was standard.
My gut instinct told me there was something not right about these people. I should have paid more attention to it.
My son thoght I was being paronoid. Sometimes we give our adult children to much power.
If you go on-line to Califonia Beach Resorts it is a beautiful web site . Looks very legit . They are just con men . I doubt if any of the more upscale properties they show are available.
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1-08-2009 @ 1:54PM
ken said...
I own a home in Sugarloaf Key, Florida. How do I researched the legal aspects of renting my home..?
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1-09-2009 @ 11:14AM
Sandy Nelson said...
My husband and I have been renting our two vacation homes in Bryson City, NC (Smoky Mountains) for ten years. They are vacation homes and not cabins. They are beautifully decorated and immaculate. If we could sell our homes, we would, because ten years is too long to be in the rental business. Unfortunately the market is saturated with second homes for sale in this area of western NC.
This is what we have learned in ten years of renting by owner:
1. It is just as easy to rent to two people as ten. Why in the world would a homeowner make every sofa a bed? You have to establish the maximum number of guests you can comfortably sleep in beds and stick to it. The more guests you have the more wear and tear you have.
2. No smoking and no pets (and no exceptions).
3. The more people tell you that they will leave your home better than they found it, the more suspect you should be.
4. Even though we don't allow pets, our thoughts about children are this...we would rather have four dogs than one toddler. Parents do not discipline their children when they are on vacation. Could go on and on about this.
5. The libraries and restaurants in town have computer access. The idea is....get them out of your house. They are on vacation. Give them all the information they need to enjoy all the activities your area offers.
6. Even though we have hot tubs, if we had this to do all over again, we " intensive and guests tend to not follow our instructions for use. Therefore, you have mechanical problems.
7. We live 3 hours away from our vacation homes. With a very good housekeeper and a very good handy man we keep our homes in excellent condition. We also have a large hand in the upkeep of our homes. Maintaining them is "work" intensive.
8. Our rental income pays the expenses on both homes. It does not cover the "improvements" that we feel need to be made.
9. There are many good websites to advertise renting by owner. The best ones are vrbo and homeaway. For us, they are a godsend.
10. Research the vacation rental business thoroughly before you buy a second home with the idea that the rent you receive will pay for it. There is so much more to it than the $$$$. The biggest negative we have is that vacationers do NOT take care of your property.
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