 Can’t take time to get away? Don’t want to feel tied to the same vacation property every year?
If you have held off on your twinges of wanting to invest in a second home because “we’ll never use it enough,” don’t let your inability to block out leisure time keep you from a terrific investment idea. All homes – primary, investment, vacation, retirement – remain one of the few bright lights in our still-sluggish economy, and economists say a slight uptick in mortgage interest rates will not darken the picture for the foreseeable future.
So, revisit that getaway area. Find a spot that makes sense to you and jump in with both feet. It’s an investment that will bring some of most pleasant memories of your life and you won’t have to rent to strangers to make it work financially.
The best way to ensure your sanity, and your second-home’s safety, is to first consider renting only to family, friends, and neighbors. In a capsule, you usually get the renter you know and hopefully trust, who will give you less hassle and who is most likely to leave your getaway in the condition they found it.
Think about it – how many weeks do you realistically have available? Wouldn’t you want to fill your available weeks with somebody you know? Why rent to a stranger who has contacted you off the Internet when the Duffys from the parish church known for their altar-boy kids would die to have the week you can’t use before Labor Day?
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Second-home owners often underestimate the large pool of potential renters created by the number of neighbors and friends near their primary residence and second home. These two separate and independent areas can produce more than enough folks to fill your rental calendar. And, it’s a huge advantage to have personally witnessed how potential renters keep their own home. You’ll rest easier knowing they probably will keep your place in much the same condition that they keep their own home. Conversely, your visit to their home may be the primary reason not to rent to them!
Remember, friends know the going rate and usually expect to pay – so charge them. If your place clearly is on a resort’s 50-yard line, has the best dock, lake-front view, and feather beds, your friends and neighbors will be prepared to pay top dollar for your top spot. (Family sometimes can be totally different matter, but…) If the getaway is in the middle of nowhere with no obvious amenities (besides serenity) and you have never rented it out, at least consider covering your utility and cleaning costs even if “nobody would be using it during that time anyway.”
If you are renting to someone you already know, chances are you probably won’t sign a rental agreement. One of the most important things to do is try and set some ground rules before they move in. Discuss any issues (broken pipes, best place to park the boat trailer, nasty lifeguard at the pool) that you think could arise while they occupy your place. Preparation always helps prevent some awkward situations down the road.
When you’re at the beach visiting friends this summer, write down the REALTOR®’s name on that nearby for-sale sign and call. After all, why should your friends be the only ones having the great memories – and financial reward?
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