Sunday, August 15, 2004
Copyright © Las Vegas Review-Journal

Renting vacation homes can pay off

Many people dream of owning a vacation home but they're not exactly wealthy and are afraid of getting in over their head.

They hear about others who pay for their properties by renting them. What could be smarter than a real estate investment that lets you spend a couple weeks a year in your own slice of heaven?

But the details seem daunting. You've got to find renters, collect rent and deal with complaints and damages.

Don't give up. Vacation homes are no longer just for the wealthy, said Christine Hrib Karpinski, author of the book, "How to Rent Vacation Properties by Owner."

Cut out the "middleman" property management company and you'll not only break even on the mortgage, but turn a tidy profit, Karpinski said.

"I recently saw a statistic that said the average annual income of second-home buyers is $80,000," she said. "That's pretty solidly middle class. So if you're concerned that you don't have the resources to realize your dream, put that worry aside. Where there's a will, there's usually a way."

Karpinski offers the following tips:

• Aim for the magic "17" weeks. If the monthly mortgage payment is less than or equal to one peak week rental, it takes about 17 weeks a year to break even. There are usually 12 peak weeks in a year, enough to pay the mortgage. The five off-week rentals will pay for other costs.

• Make friends with renters and they won't damage the place. When someone calls to make a reservation, take the opportunity to connect with them on a personal level.

"I like to talk to each renter," Karpinski said. "I am friendly and personable, and let the renters know that they are renting my second home. By establishing this relationship, the renters have now transcended from customer to `friend.' "

• Long-distance maintenance isn't as big of a hassle as some think. Hire a maintenance company for a monthly fee or have someone "on call." Karpinski handles problems herself.

"Remember, you're renting to `friends.' Your renters will do quick-solve maintenance themselves and you'll most likely never hear about it. I've never gotten a call for a stopped-up toilet. No, I don't have a clog-proof toilet, but I do have a plunger and I think that the renters just use it. They know I live 400 miles away so they don't call me for minor maintenance. Other issues such as a broken washing machine, electrical problems or leaks from the unit above are real hurdles. I simply call a repairman."

• Consider accepting pets. Vacation properties that accept pets increase their occupancy by 10 percent to 50 percent. It's a great way to increase offseason rentals. When accepting pets, it's OK to charge an additional $20 a night or $140 a week, which is enough to get the carpet cleaned. Rent it for eight to 10 weeks and you have enough to replace the carpet. Also, if people have a dog they want to take with them on vacation, chances are excellent that it's not the kind of dog that causes a lot of problems.

• Use the Internet to find renters. There are hundreds of Web sites devoted to listing vacation properties for rent. They're relatively inexpensive to list a property, as little as $150 a year.

• Be resourceful in finding good help. You'll almost certainly need a cleaning service. Check with your neighbors to see who they're using, or try the local church. Sometimes the pastor will know of someone looking for extra work.