It's a good time to make up for the equity you lost in that second home by turning it into a vacation rental property.
All signs point to a jump in travelers looking for the home-away-from-home style of accommodations found in vacation home rentals.
Conversion (vacation rental lookers becoming vacation rental bookers) improved by 16 percent over December 2009 and 31 percent over November 2010. This trend indicates that consumers are shifting from shopping to buying, said Steve Reich, Senior Vice President of Sales at LeisureLink, which tracks queries for vacation rentals, timeshare resorts and boutique hotels.
Not quite sure how to make the transition?
Here are some tips from HomeAway.com, one of the nation's largest vacation rental portal dedicated to some 500,000 privately owned listings with information for travelers and property owners alike.
In order to make sure renting your second home to vacationers is as profitable and easy as it can possibly be, you must first make sure all of your Ts are crossed and your Is are dotted, says Christine Karpinski, HomeAway's director of the Owner Community and author of How to Rent Vacation Properties by Owner: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment (Kinney Pollack Press, $26.00).
• Check local regulations. In New York City, effective May 1, 2011, apartment rentals for less than 30 days will be outlawed. The new law is designed to improve the quality of life in traditional residential apartment buildings, but it will pretty much wipe out legal vacation rentals in the Big Apple. Your home also could be subject to any number of laws and regulations as well as homeowner association rules.
• Decide to do-it-yourself, or not. Renting by owner isn't for everyone. You'll have to handle marketing, booking, bookkeeping, banking answering inquiries, handling complaints, etc. It could take up to an hour a day or more during the busy season, Karpinski says.
• If you can't hack it, hire a property manager. Get references from area neighbors, shop around and determine what chores a property manager will or won't perform, including maintenance, housekeeping, advertising, guest interviews, etc.
• Decide how you’ll handle the maintenance and cleaning. Do the chores if you leave nearby and need to save the cash, but be prepared to keep your property pristine. Unkempt properties is one of the biggest complaints, Karpinski says. If you live too far away or prefer to hire someone to do these chores, find reliable cleaning and maintenance services in the property's area.
• Price it right. Know what other properties in the area are charging and price your property competitively. Check both vacation rental properties similar to yours as well as local hotel rates. Know the peak season and off-peak season, as well as holidays, school schedules and other periods when you'll need to adjust your rates.
• Set up a payment system. You'll need a way to track and record income and expenses. Your choices are online and off and run the gamut from a handwritten ledger to software like QuickBooks. Make it easy to accept payments by setting up a credit card merchant account and perhaps a PayPal and or Google Checkout account. Also welcome cash and checks.
• Develop a marketing strategy. Your marketing strategy should consider the type of renter you want to attract - families, couples, seniors, college students or others. Stage your home for photos, write a description and list your amenities. Set aside a budget for marketing your property and divide it between online, print, and other media for advertising. At the end of each year, evaluate which marketing effort creates the highest return.
• Fill the pantry. Provide all the utensils, cookware, beverage containers and basic groceries guests are likely to need. Likewise, have sufficient bedding and linens, including extras in the closets. Consider the latest appliances and electronics - washer, dryer, flat screen TV, alarm radio/stereo, even a video game console and high-speed Internet connection, especially if you plan to cater to families.
• Develop a screening system for potential guests. Schedule phone conversations with potential renters to ask them about the length of their stay, the number in their party, and ask if they will be bringing children or pets. Tell them the property is your second home, encourage them to feel comfortable and they will be encouraged to take good care of it.
• Load up on area information. Create easy-to-read, check-in, check-out instructions, directions to your property and directions from your property to the best area attractions, events and other attractions. Provide a book of instructions for appliances and other property elements, as well as emergency and maintenance contacts sheet.
• Press for feedback. Word-of-mouth is marketing at its best. Leave comment cards or a guest book in the home for feedback. Don't leave it open-ended. Ask specific questions including, What was your favorite part of your vacation? What didn’t you enjoy? Was anything missing in the home that you needed during your stay? Feedback also helps you evaluate your efforts and make any necessary changes.