5. There are financial ramifications to consider.

While generating income is certainly desirable, you must evaluate:

• The related tax considerations
• Funds needed to bring a vacation rental house up to rental condition
• Additional costs associated with renting such as management fees, increased utility fees and certain
  maintenance fees.
  
  6. It is important to note that there are regional differences, depending on where your property is located.

• Many vacation rental properties have minimum standards and requirements not only for furnishings
  and supplies, but also for owner usage, preventive maintenance, etc.
• Ask questions to determine the conditions to place your vacation home in the rental program of a
  property management company.

  7. You should also look to see the type of properties that a property management company represents.

• Are those properties similar to your home?
• Are those properties in a similar location?
• Once you determine a short list of potential vacation property rental management companies, be sure
  to set up an interview to discuss your property.
• In certain cases the company may want to preview your home, so be sure to advise them of your
  property’s qualities and conditions prior to interviewing to ensure a good fit between your property,
  the other properties in the company’s inventory and the overall niche of the vacation rental
  management company.

Read Buying a Vacation Rental Home on Oahu Hawaii – Parts 1-13

1. There are certain Advantages and Disadvantages to working with a vacation rental property
management company.

There are some considerations you should make before starting the search for a vacation
rental property management company. Having a professional firm take care of your home
affords you many distinct advantages and disadvantages.

Advantages:

• Someone is local in the event something should go wrong.
• A professional property management firm is on duty 24/7.
• If a major storm occurs, they can assess the condition of your vacation property and take immediate
  steps to repair and minimize the damage.
• Handle guests that are too noisy or disruptive to neighbors.
• Help ensure that your vacation home is in presentable condition by keeping it clean and well
  maintained.
• Safeguards your property and protects your asset.

  Disadvantages: There is a cost for these services. In the end though, there is usually higher cash flow using
  a property manager as compared to ‘by owner”. Every situation will vary.

  2. While this is your property, strangers will use it.

• Can you tolerate the fact that people will use your home and there will be additional wear and tear on
  the property?
• There will be a greater likelihood of damage.
• Professional Professional vacation rental property managers caution that it is important to try and be
  emotionally detached and NOT emotionally invested vacation rental property managers caution that it
  is important to try and be emotionally detached and NOT emotionally invested
• Damage is not acceptable, but must be anticipated.

  3. Once you agree to rent your property with a vacation rental property management company, they should
  understand it is a business relationship with certain obligations.

• The vacation rental property management company will provide you with many services.
• You must expect to deal with maintenance, cleaning, and home upgrade issues.
• Keeping the property competitive in the rental market is as important as having the property available
  for rent.

  4. Once your home is “under management”, the property is no longer available on an unlimited basis to you
  or your family or friends, particularly during high rental periods.

• You should realize that the renting of a property is an agreement with a third party and you cannot
  have access to the property until your guests depart.

Read Buying a Vacation Rental Home on Oahu Hawaii – Parts 1-12

Buying a Vacation Rental Home on Oahu Hawaii – Part 11

Vacation Rental Managers ……… Continued

According to an article found on Start Up Vacation Rental Owners online site, www.startupvrowner.com, the following issues were addressed:

How much $$:

One of the biggest concerns for VRBO rental owners is the cost. Your goal is, of course, to find a management company that has a commission fee that you feel is reasonable for the services that they provide. This depends greatly on the area of the home and the services that are included.

Some important things to look for and questions to ask when doing your research:

Some management companies charge a commission in addition to a management fee. Make sure you ask the company you are interview to disclose ALL FEES in writing. Then, make sure you read the fine print so nothing is a surprise down the road. Strictly speaking about a commission structure, my research tells me that you want to be somewhere between 25-30%. A commission lower than that may cut into their marketing budget ultimately affecting you!

Review all of the different fees that they charge. Some charge a lot, some are more reasonable but may have a higher commission share; it is your job to calculate all of that. You know the old saying that “it takes money to make money”? Keep that saying in mind when you weigh your management company options.

Reservation Agents need to be well educated and strong sales people:

You should have peace-of-mind that, if a potential guest calls your management company, the reservation agent will be able to give the guest accurate vacation rental information about your property. They should be able to really tell them about the property and the great features it has. It’s a good idea to only consider working with management companies that send their reservation agents to visit properties so they get to know the property that they are selling.

Personal Use:

Some property managers dictate to the owners when they can and cannot use their own properties. For instance, they may tell you that you can’t stay in your home for Spring Break, Christmas week, or Fourth of July week. If vacationing at your home is a priority make sure to look for a property management company that does not stipulate when you can stay.

Read Buying a Vacation Rental Home on Oahu Hawaii Parts 1-10

Buying a Vacation Rental Home on Oahu Hawaii – Part 10

Vacation Rental Managers

If you own one or many vacation rental homes but you’re not a do-it-yourself kind of person; you’re in luck because there are hundreds of rental management companies that are very capable. Vacation rental property management companies take care of nearly everything! However, the one very important job that you have is finding the rental management company that best suits you and your management style needs! The VRBO business information on this page will help you do just that.

What to look for in a vacation rental property manager:

You will need to find a vacation rental property management company that you trust; after all, you are giving them access to your investment! Finding a company that you trust will take some time with interviewing and research but keep in mind that you are looking for a management company that you can trust and one that you feel fits your style and needs. If I were looking for a vacation rental property management company I would personally be looking for one that will provide the same level of service that I would expect to get if I were the guest!

Where to start:

If you were to get on the internet and search you would find that there are hundreds, if not thousands, of vacation rental property management companies and many specific to your area. But there is one source that makes it all a little easier to sort through!

The VRMA (Vacation Rental Managers Association) www.vrma.com is a great place to start. VRMA represents over 600 property management and associate members in the U.S. The site not only provides a list of accredited management companies but they also provide industry news, stats, upcoming events and plenty of vacation rental info.

Other reputable organizations to check with are your local chamber of commerce and the Better Business Bureau.

Get to know the company:

In the beginning stages be sure to find out how long they have been in business, what kind of a reputation they have, and be sure to find References and accreditations. One of the best ways to get a feel for the company is by speaking to some current vacation rental home owners managed by that company and asking them your concerns and questions. Getting to know your management team is the key to success in the Vacation Rental Industry.

Read Buying a Vacation Rental Home on Oahu Hawaii – Parts 1-9

Buying a Vacation Rental Home on Oahu Hawaii – Part 8

Hybrid Property Management/ Rent by Owner Relationships

According to an article written by a community editor at “Community from HomeAway” an online organization that deals with optimizing your vacation rental business, the following points were made:

Long gone are the days of all or nothing. With more and more vacation rentals open for business each day, property management companies have become more flexible by allowing “hybrid” relationships. You can still rent-by-owner with the added comfort of knowing you have a management company for emergencies or unforeseen problems that may arise. This could be especially helpful if your vacation rental is not near your primary home.

There are several different ways you can use a property manager while renting-by-owner:

• The owner buys and manages online listings, but the property manager’s contact info is listed. With this method you won’t get inquiry or emergency calls from renters at inconvenient times, such as during dinner or in the middle of the night.
• “À la carte” property managers, where the owner only pays for the services they want. Obviously, cost and services will vary depending on exactly what your needs are. For example, the owner handles their own marketing and bookings, and the property manager handles cleaning, maintenance, and keys and charges a flat fee for each. If you’ve had difficulty finding a housekeeper you like in the past, this could potentially be a good solution.
• Full service property managers who charge a discounted commission for bookings generated by owner. This might work well for you if you do not have as much time to devote to renting your property as you would like, but still want to play an active role in the bookings.

Read Buying a Vacation Rental Home on Oahu Hawaii – Parts 1-7

According to a Press Release on Benzinga online streaming news, “Long-time Hawaii Resort Executive Jeremy Sosner introduced Private Homes  Hawaii today, a full-service property management, luxury real estate and  vacation rental company based on Oahu. Integral to the company’s marketing plan  is an innovative, inter-active website, PrivateHomesHawaii.com created as a  one-stop resource for those looking for choice properties in Hawaii, including  Oahu vacation rental homes and Hualalai resort rentals.”

“Presenting the best of what the Hawaii real estatemarket  has to offer, Realtor Jeremy Sosner, founder of Private Homes Hawaii, has  recently launched his interactive website, PrivateHomesHawaii.com. “My site is  mainly intended to be a one-stop destination for Hawaii  vacation rentals, Big Island rental homes, and properties for sale  throughout the islands,” says Sosner.”

Read the rest of the article, “Prominent Business Executive Launches Interactive Website“.

Buying a Vacation Rental Home on Oahu Hawaii – Part 6

Self-Managing (aka Renting By Owner)

According to an article written by a community editor at  ”Community from HomeAway” an online organization that deals with optimizing your vacation rental business, the following points were made:

Today, hundreds of thousands of vacation homeowners choose to rent without the use of a property manager. For many, there are 3 main reasons they choose to rent by owner instead of using a property management company.

• Income. You can make more money by saving the management company commissions and handling the rentals yourself.
• Complete control of who rents your property. By talking to each renter yourself, you can better screen who you will allow to stay in your second home, whereas property management companies might not be as particular.
• Availability of vacation rental websites. Websites like HomeAway.com, VRBO.com and VacationRentals.com have made it extremely simple and cost effective to rent your vacation home without a middleman.

Read Buying a Vacation Rental Home on Oahu Hawaii – Parts 1-5

To be Continued………..

Buying a Vacation Rental Property on Oahu, Hawaii - Part 2

Answers to frequently asked questions from current and prospective vacation rental owners about buying vacation real estate.   According to a series of articles written by a community editor at “Community from HomeAway” an online organization that deals with optimizing your vacation rental business, the following points were made:

#Q: Is vacation real estate a good investment?
A:Owning real estate is like investing in blue-chip stocks. Real estate very rarely loses in the long-term, especially in vacation markets. Real estate has almost no socioeconomic boundaries. The average middle class family owns at least one piece of real estate. You don’t have to be a millionaire to invest. With a little money down and good credit, most people can reap the benefits. The best part of investing in real estate is that we’re using someone else’s money to help cover or at least offset the costs of owning our vacation property.

#Q: Is now a good time to buy a vacation rental home?
A:Despite the current economic conditions, it might actually still be a good time for you to invest. Of course this is a personal decision, but in many markets vacation homes are still a solid investment if you’re in it for the long-term.

#Q: Where can I buy a vacation rental that will cash flow?
A:This is a tough question to answer because everyone’s financial situation is a bit different. In addition, different vacation home buyers will be interested in different vacation destinations and have varying levels of dedication to marketing and managing the rental. The key to finding a rental property that will cash flow is to research both home prices and average rental rates in areas you’re interested in. Other factors for rentability include location within the market, size, condition, amenities, and curb appeal.

#Q: How much can I expect to make in rental revenue from my vacation rental each year?
A:It’s hard to make a sweeping statement that will apply to all homes and homeowners. That being said, vacation rental homes tend to bring in around 5-15% of the home’s value in rental revenue annually. For example, a property valued at $250,000 can bring in anywhere from $12,500-$37,500 in annual rental revenue. The exact ratio of revenue to home value depends on your region and the level of effort you put into marketing and managing your rental.

#Q: How can you predict if a market will appreciate over time?
A:Property value growth is an important consideration when buying a vacation rental because most vacation home owners are in it for the long-term. You’ll make money with rental income, but it would also be nice to know whether you’re in an area where homes are appreciating. Your real estate professional can obviously shed some light on the current market conditions and how property values have increased or decreased in recent years. You’ll also want to do some research on your own by studying values of other homes in the area. Most counties will allow you to review property tax records and parcel data online. This will enable you to examine how the taxes have increased or decreased over the years, and also the changes in the value of the home (or homes in the area). In addition, you’ll want to research the homeowner’s association to check for hidden fees or special assessments that could factor in to the price of the property you’d like to purchase.

#Q: Is it better to buy a vacation home in a popular vacation destination or in a more remote area?
A:Where you buy a vacation rental will likely depend on your budget and your personal preference. A cabin or cottage in a more remote destination will probably cost less, but could be more difficult to rent. A home in a more popular destination will likely cost more, but in the end may be easier to rent.

#Q: What are the best places to buy vacation rental properties?
A:The best place for you to buy a vacation rental is in a market that your family enjoys and will want to visit every year. If you buy a house you love in a location you love, chances are there are other families out there that will love it too, and you get to enjoy it when you’re not renting it out.

#Q: Is it better to buy a vacation rental that is close to my primary home or farther away?
A:There are pros and cons to each. If you are nearby, you can more easily deal with maintenance and upkeep, but also will feel more inclined to drop everything and drive to your vacation rental if there is a problem. If you choose to buy somewhere farther away, you’ll be forced to rely on others. The key is to hire competent housekeepers and maintenance people.

Read Buying a Vacation Rental Property on Oahu, Hawaii – Part 1

Continued……………….

Buying a Vacation Rental Property on Oahu, Hawaii - Part 1

You’ve always dreamed of owning a vacation home. After all, real estate is a smart investment, and what investment could be better than one that lets you spend several weeks a year in your own little slice of heaven?

Problem is, you fear getting in over your head. Your biggest concern may be that of cost. You know that many vacation homeowners pay for their properties by renting them, but the details seem daunting. How would you find renters? Deal with damages? Clean the home from 200 miles away?

Don’t give up on your dream.  Vacation Rental income can cover your second-home costs with good management and marketing.  And, you still can use the property when you wish, for your own vacations!   Although most of our clients prefer to utilize the services of local Vacation Property Management Companies with proven track records of successful, vacation properties and happy home owners, there are a few who want to consider managing and marketing the property on their own, particularly those who don’t live too far away.   So, it may be worthwhile looking at the two options (and actually a third) more closely.  

Before we do that though, let’s look at some Frequently Asked Questions about Buying a Vacation Rental Home.

To be Continued………..