Byline: Michele Lerner, SPECIAL TO THE WASHINGTON TIMES
Worries about a slumping economy might suggest that buying or renting a vacation home is the last thing on the minds of most consumers, yet 2009 was a good year for vacation home sales, according the National Association of Realtors. Perhaps recession fears led more families to invest in places where they could escape the news and relax a little.
The National Association of Realtors 2010 Investment and Vacation Home Buyers Survey reports vacation-home sales rose by 7.9 percent in 2009, while primary residence sales rose by 7.1 percent. Statistics show vacation-home prices rose by 13 percent in 2009 after three years of declines.
The Realtors association's chief economist, Lawrence Yun, commented on the survey, saying, The typical vacation-home buyer is making a lifestyle choice, with nine out of 10 saying they intend to use the property for vacations or as a family retreat.
Just one in four vacation-home buyers plan to rent their properties to others, while 26 percent intend to use the property as a primary residence in the future.
Resort areas at beaches, lakes and mountains in Virginia, West Virginia, Maryland and Delaware attract Washington-area residents, many of whom eventually opt to a buy a vacation home for their personal use. Now that the vacation-home market seems to be improving, some of them are opting to sell these homes or actively market them for short-term rentals.
Christine Karpinski, director of the Owner Community for HomeAway Inc. and author of How to Rent Vacation Properties by Owner, recommends that vacation-home owners, whether they have rented their homes or not, provide an estimate of rental income potential to prospective buyers.
Every vacation-home owner should talk to a local property management company if they have not rented out their home in order to find out the possibility for rental income, Ms. Karpinski says. That information should be included in the marketing materials for the home. Not only will the pool of people who can afford to buy the home be larger, but the possibility of earning rental income will factor into the comfort level of every potential buyer. Even if someone has no intention of renting their home, they will view rental income as a safety net.
Ms. Karpinski suggests that vacation-home owners offer to rent their property to prospective buyers at the standard price for a week, but with the written promise of a rebate of the full rent at settlement if the renters choose to buy the home.
In many ways, marketing a vacation home is similar to selling a primary residence: Location, price and condition are the main factors that influence how quickly a home sells and whether it sells close to the asking price.
The proximity of a home to the ocean, whether it is oceanfront or within walking distance of the beach, influences how popular it will be for short-term rentals and for sales, says Marie Cahill, a broker at Connor Jacobsen Realty in Bethany Beach, Del. For sales, though, oceanfront property is typically priced at over $1,000,000, so that may actually slow down sales a little.
Ms. Cahill recommends that vacation-home sellers have appraisals before putting their properties on the market. This will provide a professional opinion of the appropriate sales price. She also recommends that sellers pay for home inspections so they will be able to anticipate requests from potential buyers for repairs. Ms. Cahill says all sellers should have their homes staged to make them more appealing to buyers.
While those are recommendations she makes for both primary and second-home sellers, she says, vacation homes need to be marketed according to the season.
If you are selling a vacation home, it will typically be bought by someone who lives within a two- or three-hour drive, Ms. Cahill says. You need to figure out how to reach those buyers. In our area, we have buyers from the District of Columbia, Northern Virginia, Maryland, Philadelphia and even New York and New Jersey.
Ms. Cahill says in-season, which for Bethany Beach is the summer, vacation-home owners can market where the home is located.
Vacationers typically pick up the local paper and will look at homes on a rainy day or just on a whim, Ms. Cahill says. If you want to sell your home, you need to think like a vacationer.
The Bethany Beach market picks up in the spring with buyers who want to have a home for the summer, and in the fall with buyers who spent time there in the summer and are ready to buy.
Vacation homes need to be marketed heavily on the Internet in the off-season to reach buyers from other areas, Ms. Cahill says.
The National Association of Realtors reports that the typical vacation-home buyer purchased a property that was a median distance of 348 miles from their primary residence and 34 percent were within 100 miles.
Ms. Karpinski recommends marketing vacation homes specifically on vacation-home websites, such as VRBO.com and HomeAway.com, because buyers sometimes can find websites that list property by county confusing since it can be difficult to identify the true resort properties.
In order to make your home stand out on the Internet, whether it is for a short-term rental or to sell it, you need to pay a professional to take excellent photos and you need to make sure your home is colorful, Ms. Karpinski says. "This is a little bit different than marketing a primary home, when sellers are typically told to make everything neutral.
For a vacation home, buyers are usually looking for a home that is decorated for the location. If it's a beach home, they want to see beach colors and decorative items. For a ski cabin, they will want something more rustic but perhaps with warm primary colors or quilts. People want to know they are on vacation.
Unlike in standard home sales, Ms. Karpinski says, furniture, decorative items and even household items such as cookware and silverware often convey to the new owner of a vacation home.
It is important for vacation sellers to recognize that even if they want to keep some of their nice things from the home, it can be a selling point to include the furnishings, she says. They may even want to deliberately purchase some fun items, such as a margarita maker for the beach house, to make it appealing.
For sellers who have enjoyed a steady stream of income from short-term rentals, Ms. Karpinski suggests marketing the property as a business rather than just a home.
Vacation-home sellers can offer to e-mail past guests with the new owner's contact information or pass along potential customers for the property, Ms. Karpinski says.
Whether selling the home or marketing it for rental income, vacation-home owners need to consider the type of people who might want to buy or rent the property.
If the audience will be families, then the owners might want to add a high chair or portable crib to the property or even a few toys, Ms. Karpinski says. If the community or the home is more appealing to couples, then it would be a good idea to put in a king-size bed, since a lot of people prefer one if that is what they are used to at home. Owners should anticipate the needs of their renters or buyers, because the little things add up to make a place more appealing.
Vacation-home owners considering marketing their homes for short-term rentals will need to decide whether to work with a property management company or rent the homes themselves.
Ms. Karpinski says, There are risks and rewards to renting on your own or working with a management company. The main reason to do rent-by-owner is that property management companies will typically take a 40 to 50 percent commission on the rental income. However, renting on your own does require significant work on the part of the owners.
While many specific steps need to be taken for a private rental, Ms. Karpinski says, there are three crucial elements to a rent-by-owner arrangement: finding a trustworthy, excellent housekeeper to maintain the property; developing high-quality marketing materials, and having the time to answer e-mails and phone calls about the property.
Someone who prefers to be hands-off would be better off hiring a management company, Ms. Karpinski says. But I truly believe that by getting a security deposit, requiring the full payment 30 days in advance and speaking directly with potential renters, the process can work very well for vacation owners.
Whether you are marketing your home for rental income or you are ready to sell, vacation-home specialists agree that the effort you put into making your home clean and appealing to vacationers will pay off in more frequent rentals or a higher sales price.
