Thursday, August 10, 2006

Your White Mountains Vacation Home - Renting it Out

So you say you want to own a second home—but you just can’t quite afford it? Many people can and do accomplish the dream of a second home by buying and then renting the property out to vacationers. It’s a simple strategy, and one of the smartest ways to make your second home mortgage payment with hardly any problems at all.


When it comes to success with vacation rentals it’s important to prepare a plan of attack-- you really must know exactly what you are doing, or best scenario for you, work with Realtors like Pam & Bruce at Century 21 Sunshine in the White Mountains—people who really know the White Mountains Arizona market, know what other people find appealing in vacation/second home cabins, good value for dollar, and many other market factors. More than likely there will be potentially hundreds of other vacation rentals in the White Mountains of Arizona. It’s a big area, and one of the most popular vacation destinations in the Southwest. So, you’ll want your vacation rental to be competitive not only in features and prime location, but in price, too.


The best way to determine price points on rentals is by examining other similar properties in the area. And be realistic about this! Don’t buy too big and price yourself out of the vacation rental market. You’ll be sorry.


Bruce & Pam, “Your White Mountains Realtors” are a great resource for your pricing. Our Property Management Division has a long experience with owners of vacation homes—and we can guide you very well on price points.


And don’t forget the Internet if you are trying to get information on vacation rentals. Search any one of a number of sites that list vacation homes for rent, and then compare the prices.


In addition to how much rent you charge, you will also need to give some good thought to the time of year that you are renting-- that will have a lot to do with how much money you can hope to make. The White Mountains of Arizona offers vacationers near year-round vacation opportunities, in all seasons; but summer and winter will be the big bookers. When vacationer traffic is the highest, you can command top dollar for your property.


In the White Mountains of Arizona, an owner can make money renting out vacation rentals during off peak months, too; but the rental return will be slightly less than the peak months. But if you are not going to be staying there, you might as well try to rent it out! After all, any money that you get is better than no money at all!


And don’t forget to decide how long you will rent your property out for—weekly, monthly, etc. Take a look at your own schedule and finances to determine what’s best for you.


Being a success with vacation rentals is achievable. Knowing the details of renting out vacation properties is the best way to make sure you have relatively few problems making enough money to cover your second mortgage!


And, buying a vacation rental in the White Mountains of Arizona can be a great way to get involved in the real estate industry. Many people decide that this method of investment can be much more profitable than other methods of investing such as foreclosure investing.


Avoid snap decisions that result in a property you’ll have trouble renting. Think BUSINESS, not fun. And, as always, “Ask A Realtor”— good, market-savvy Realtors, such as Pam & Bruce can be the most important weapons in your arsenal!


So, remember:



1. A vacation home is not one that you will live in year round. Don’t necessarily look for features that you would like in a home—this is a vacation property. Rustic, cozy, a simple “home away from home”. Look for features that people who rent vacation homes and cabins would like. This includes an eat in kitchen, pull out couches, decks/patios, tall trees, some privacy, and proximity to White Mountains lakes, streams, parks, activities, etc.


2. Make scrupulously sure that you do not overextend your budget. This is advice to follow whenever you buy any property. Never make a purchase that you cannot afford.


3. A vacation home is a great way for you to make additional money, but remember there will be out-of-pocked expenses, and time to invest. If you plan to manage the rentals yourself, be prepared for a job. Maybe consider putting a little buffer between you and your renters by hiring a property management outfit to take care of it for you. If you do plan to go that route, factor those costs.


Consult a tax professional about tax consequences. Most experts advise that you should buy a vacation home for pleasure - not as an investment.


If you rent out a vacation property most of the year, the IRS will only allow you to occupy the property for two weeks out of the year without affecting its investment-property status.