Times are tough in the real estate world. Although many industry experts are seeing an upswing, many individuals have been saddled with failing or failed property investments. Booming tourist and resort areas have had fewer and fewer visitors. Vacation rentals, once incredibly popular, sit vacant and are costing a fortune to maintain. One option for owners has been the conversion of these vacation rental properties to long-term leases.
Although this might seem like a ‘no brainer’, there are many issues of consideration. Several homes belong to communities with strict association policies. An investigation into possible penalties for homeowners is absolutely necessary when thinking about long-term rental. Another consideration is property management and maintenance. Lastly, renter search and selection are essential in successful vacation rental conversions.
Homeowner’s associations have been viewed as lifesavers— for some, and the ‘bane of existence’ for others. If the association is a helpful support structure, it is generally interested in seeing that the entire community does well. Check the details for regulations and stipulations that the association might have, like: the number and size of pets allowed, services that must be maintained and how often and renovation and remodeling limitations. Because many of the communities were designed as short-stays, convenience, instead of durability, were the focuses. There may be a need to upgrade and remodel to accommodate a renter.
A property management company maintains most vacation rentals. These companies charge hefty fees for things like: rent collection; landscaping services and waste removal. Owners may want to consider including that cost as part of the monthly or bi-annual rent. A consultation with local realtors will give clues for reasonable amounts for the community. The goal may be for the simply cover the cost of the mortgage and not seek a huge profit. Another option is to move to owner management. Although there is greater responsibility, the cost-savings might be worth the extra runaround.
Finally, finding the right renter for the property is crucial. Not unlike other rental properties, conducting a thorough check will allow greater discernment. Only the individuals with clear credit histories, strong references from previous landlords/managers, and those who are gainfully employed and show themselves to be very responsible, should be considered. Owners would be wise to select an individual who would treat the property with care and respect.
With fewer and fewer families having the extra incomes to enjoy the use of vacation homes, owners can find themselves riding out the economic downturn wave or reacting in a way that keeps them financially solvent. As home sales finding similar challenges, the idea of converting short-term vacation homes into long-term leases, is not only practical but also protective. Options are available for those willing to step into the adventure. Adventures are not new to vacation homeowners…the initial purchase was the indicator. Choose wisely!