Renting your vacation home without the help of a property management company could save
you as much as half your rental income.
Christine Karpinski, a self-taught Atlanta, GA vacation property owner who runs a growing
vacation property rental business on the Florida panhandle, says property managers in her
area charge from 40 to 60 percent to manage vacation rentals and along the Florida coast
it's 30 to 45 percent.
In a recent interview, she also said, while cutting out the middleman is a great start,
there's more work vacation property owners must do to reach profitability.
She offered the following tips:
Strive for the 17-week "sweet spot" by renting your property for a minimum of 17
weeks each year. If your property's monthly mortgage payment (including principal,
interest, taxes and insurance) is less than or equal to one peak season weekly rental, and
you rent approximately 17 weeks per year, you will break even on the cost of your
property. The rental income will give you 12 monthly mortgage payments, plus an amount
equal to about five more monthly payments to cover the costs of utilities, homeowner
association dues, maintenance, upkeep and the like.
"It's a formula I came up with and it seems to work if the property costs $5 million or
$60,000," said Karpinski.
Also, limiting the rental period -- even if you rent for 20 to 25 weeks to give yourself
some extra income and financial breathing room -- leaves less wear and tear on the
property and leaves you with plenty of time to trade your property with other investors
for your own vacation elsewhere.
"I've traded my properties a zillion times," Karpinski said.
Make friends with your renters. Karpinski says renting yourself gives you time to
get to know your renters and to let them know you are renting your home. Getting to know
renters and letting them know you establishes a rapport that transcends the traditional
customer-business relationship.
"I am friendly and personable, and I let the renters know that they are renting my second
home. If you stay in a hotel and spill coffee on the carpet, what do you do? But if you
rent a 'friend's' place, how differently would you handle that spilled coffee? My renters
take care of my unit," she said.
Don't hire a management company just to get maintenance services. Hire a maintenance
company for less and pay them a monthly fee to have someone on call. If you live near
enough, handle the problems yourself. Also, provide some basic maintenance tools for
travelers.
"I don't have a special clog-proof toilet, but I do have a plunger and I think that the
renters just use it. Other issues, such as a broken washing machine, electrical problems,
or leaks from the unit above (all which have happened to me), are the real hurdles. I
simply call a repairman. The renters or my cleaning service let him into my unit and the
work gets done," she said.
Be prepared to compensate travelers for any inconveniences by either refunding a portion
of the rent or giving them a percentage off their next stay.
"Preventative maintenance is the best way to avoid problems," she added.
Likewise, don't hire a property management company just to get cleaning services.
Hire a cleaning service. A good way to find a company is to visit your property on a
weekend when most renters are checking out. If your neighbors have hired a service, ask
them if they want to some additional and conveniently-located work. Stagger your check-out
time so the company can clean your place when they are in the neighborhood.
Use the Internet to make it easy for guests to find your property. Vacation rentals
by owner is a growth industry, thanks in large part to the Internet, which not only gives
owners a place to rent, but also makes it easy to search quickly, get a look at the unit
inside and out (with online photos) and to contact the owner. One of the best starting
places is the independent International Real Estate Digest which lists both vacation homes and timeshares. You can also
Google around for websites that host vacation rentals by owner. For the uninitiated, that
means going to Google.com (or any Web search engine) and searching for vacation rentals
services.
"I have found that listing on three to five sites to be 100 percent effective in renting
my places," said Karpinski.
When writing your listing description, use words that get results. "Clean, peaceful,
romantic, spacious, classic, cozy, private, inviting, rustic, warm, secure/security, and
well-appointed," are Karpinski's favorites.
"You'll notice that 'beautiful, nice, spectacular, and magnificent' were not on my list,"
she points out. "These words are so overused, especially in titles, that they just don't
have impact. Use them sparingly," she said.
Other experts suggest describing something unique, unusual or special about your property
to set it apart.
Consider accepting pets. Vacation properties that accept pets increase their
occupancy by 10 to 50 percent, because many traditional types of accommodations don't. The
tactic is also a solid off-season strategy. Collect an additional $20 to $25 or more a
night or $140 to $175 a week for enough cash to get the carpet cleaned after each pet
owner visit. After eight to ten weeks, you could also have enough to replace the carpet,
said Karpinski.
Tomorrow: Yet Another New List of Top Vacation Home Markets
Published: July 27, 2004
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Broderick Perkins parlayed a career in old-school journalism into a
contemporary digital news service that really hits home.
The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services.
The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home.
Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News.
Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake.
He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications.
In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.
Broderick Perkins parlayed a career in old-school journalism into a
contemporary digital news service that really hits home.