The Business of Pleasure

Cashing In On Your Vacation Home

Wondering how to make the most of your assets in a time of economic downturn? If you own a second home and only use it once or twice a year, why not convert it into a cash-making machine? You could take a hands-off approach and rent your property through a management company, but according to Christine Karpinski, author of HOW TO RENT VACATION PROPERTIES BY OWNER (Kinney Pollack Press , 2007), if you cut out the middle man and use a little ingenuity you could cash in big time.

Here are some tips from Karpinski to make it work:

Aim for the magic “17 weeks” and the bills will take care of themselves. If your monthly mortgage payment is less than or equal to one peak week rental, and you rent approximately 17 weeks per year, you will break even on the cost of your property. Usually there are 12 peak weeks in a rental year. So if you rent these 12 weeks, you will have enough revenue to pay your mortgage payments for the entire year. Other costs, including bills for your phone, power, cable and association dues; are paid by your earnings from approximately five off-week rentals.

Talking to renters yourself is “damage insurance.” The obvious reason to cut out the middleman is, of course, money. But the other reason, says Karpinski, is that you get to control who rents your vacation home—an informal brand of “damage insurance.” “I like to talk to each renter,” she says. “I am friendly and personable, and let the renters know that they are renting my second home. By establishing this relationship, the renters have now transcended from customer to ‘friend.’ 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.”

To find renters, rely on the Internet. “There are hundreds of websites that are devoted to listing vacation property renting by owner,” says Karpinski. “They are pretty inexpensive to list your property—only around $150/year. I guess you can say it’s like a classified ad that you take out on the Internet. I have found listing on three to five sites to be 100 percent effective in renting my places.”

When writing your description certain words get results. Karpinski offers a list of her favorite vacation property descriptors to include in ads. Examples are clean, peaceful, romantic, spacious, classic, cozy, private, inviting, rustic, warm, secure/security, and well-appointed. “You’ll notice that beautiful, nice, spectacular, and magnificent were not on my list,” she points out. “These words are so over used-especially in titles—that they just don’t have impact. Use them sparingly.”

Consider accepting pets. Vacation properties that accept pets increase their occupancy by 10 to 50 percent. It’s also a great way to increase off-season rentals. When you accept pets, it’s okay to take an additional $20 to $25/night or $140 to $175/week. That’s enough money to get the carpet cleaned after each stay, or rent eight to ten weeks and you have enough money to replace the carpeting! And the best part is this: if people have a dog that they want to take with them, chances are excellent that it is not the kind of dog that causes a lot of problems—otherwise, they would have spent the “pet fee” to board it.

With a little creative thinking good help isn’t that hard to find! You will almost certainly need to hire a cleaning service for your vacation property. Here are two suggestions:

ONE
Visit your property on a weekend and go outside when most renters are checking out. Your neighbors probably have a cleaning service. Talk to your neighbors’ cleaners and see if they want to pick up a side job. (You can stagger your check-out time so they can clean both.)

TWO
Another good resource for housekeepers is your local church. Sometimes a pastor will know of someone who is looking for extra work. It pays to be resourceful.