Home Away from Home
What to Consider When Renting or Buying a Vacation Property
Home may be sweet, but a second home can be even sweeter — it offers a respite from everyday life in a favorite setting and, unlike a hotel, it provides a more personal space in which to unwind. Whether you’re thinking of purchasing or renting a cabin in the woods or a lakefront condo, there is a property for you in one of the popular Midwestern getaways favored by folks in the western suburbs.
All About Location
Both the location of your getaway in terms of distance from your primary home and in terms of the setting are important considerations. Many people visit a resort community one or more times, forging an emotional connection with the place, which guides their decision making. If you’re looking to buy a vacation home, you’ll want to make sure that the travel time to and from your retreat is comfortable enough that it won’t hinder frequent visits.
Also, take some time to think about what sort of environment you most enjoy while vacationing. Do you like to be in the middle of the action? Perhaps you want a place in the heart of a bustling town where you can walk to shopping and entertainment. Do you crave solitude and natural beauty? A secluded cabin in a wooded setting with plenty of hiking trails might do the trick. Does your family adore water sports, such as boating, water skiing, kayaking or fishing? Then property on or near a lake might be high on your wish list.
Some decisions might be dictated by your budget, but you should be able to find a workable solution. In Door County, as in many popular tourist destinations, lakefront property comes at a premium, notes Scott Bader of the Coldwell Banker Real Estate Group in Fish Creek, Wisconsin, who says buying a home on the water may cost two to three times as much as an equivalent home on several acres without water frontage. “Everybody wants to be on the shore, but not everyone wants to spend that money,” he says. A more affordable option might be a home just minutes from a public beach or water access.
Some might prefer to test the waters by renting rather than jumping into a second-home purchase. For the best selection of summer rental homes, especially if you are looking for a larger place, most in the rental business recommend starting your search early, just after the holidays or in the early spring.
However, if you’re getting a late start, don’t despair — many rental companies are continually adding to their portfolio. Teresa Woods, owner of Visit Up North, in Traverse City, Michigan, which manages 160-170 properties in the area, says, “The sooner you look, the more choices you might have, but it’s never too late to check — there’s usually always something available.”
The considerations about location apply to renting as well. Woods advises prospective renters to communicate their wants and needs to the rental company in order to find the best fit. “If it’s important to you, mention it,” she says. “If you want a home without stairs, if you prefer a sandy beach to a rocky beach, if you have allergies and need a home with air conditioning — anything that’s a must-have — share it with the agent.”
The other important factor is size of your family or group. You’ll want to select a home that not only accommodates you in terms of sleeping quarters but also in terms of gathering spaces. Make sure you are choosing a home with a family room or kitchen to fit the whole group.
“Renting a large home is often the most affordable and comfortable option for families,” says Colin Sanderson, sales and marketing director for Eagle Ridge Resort & Spa in Galena, Illinois.
Sometimes, renting several homes located near one another might be the best choice, especially if you’re traveling with other families or hosting a reunion. Vacation rental companies will work with you to find the best fit — but most of them have strict capacity limits, so trying to shoehorn extra friends and family members in at the last minute won’t work.
To find a home to rent, look for a rental company with a solid track record and positive customer reviews. Jason Milovich, owner of Bluefish Vacation Rentals in Union Pier, Michigan, has a wide array of properties, from one- to 11-bedroom homes spanning a mix of price points. He advises renters to pay close attention to the terms of the rental agreement. For example, most companies will provide linens and towels, and some might include a “starter package” of paper towels and toilet paper, but not all do. “Read the (agreement) details and call or e-mail if you have questions. If you don’t get a fairly quick response, that might be a red flag — what will happen if something goes wrong during your stay?” he says.
Keefe Vacation Rentals in Lake Geneva, Wisconsin, offers more than 60 high-quality properties in southeastern Wisconsin, ranging from one-bedroom condos to seven-bedroom homes. Director Garner McClayton says using a locally based rental company offers several advantages. A local company knows the area and can tell you about restaurants, attractions and events and is also more accessible in the event of an emergency. “We have a 24-hour emergency line in case anything goes wrong,” says McClayton. “Life is not perfect, and neither are vacations. We are here to try to make it as easy as possible for our customers to enjoy themselves.”
Expenses of Ownership
You’ve rented a home in your favorite resort town for several years and you want to make things more permanent. Before you buy, in addition to looking at the mortgage, taxes and other expenses that accompany buying a second home, take time to weigh the day-to-day costs of home ownership in terms of both time and money.
Cutting grass, maintaining the home inside and out, updating furnishings, etc. — these chores and expenses from everyday life will follow you on vacation if you own a second home. If you wish to avoid some of these, you might consider a condo, townhome or other managed property where you pay homeowner’s association or other fees to handle maintenance and upkeep.
Making an Investment
There are typically three types of vacation-home buyers — those who buy solely for their own enjoyment, those who buy to enjoy the home but hope to recoup some of their costs with rental income, and those who buy and rent purely as an investment. Sometimes people buy more than one home in the same area for different reasons.
If you are hoping to offset some of the expense with rental income, there are several factors to think about. Before buying, make sure that the condo or homeowner’s association in the community where your vacation home is located permits rentals.
“These days, most of the condos being built (in Door County) have restrictions on rentals, so if you are buying with the intent to rent to cover some of your costs, you need to be aware of that,” says Bader.
There are, however, many home and condo developments that make it easy to rent. For example, if you purchase a condo or a home at Eagle Ridge Resort in Galena, you have the option to take part in the rental program, says Sanderson. There are currently 200 rental homes available at the 6,800-acre property in Galena Territory — everything from a one-bedroom condo to a six-bedroom home upwards of 10,000 square feet.
Ron Morales, owner of Waya Rentals Vacation Company in New Buffalo, Michigan, currently manages 35-40 upscale rental homes in the Harbor Country area. A large number of his renters end up investing in homes of their own. “I always tell people to buy something that feels comfortable for their family — and then consider the rental piece,” says Morales, though he notes that larger homes with specific amenities tend to book more quickly. “Places with pools and more than three bedrooms go first,” he says, “And those on land or in private settings are among the most successful.”
Weather also influences rental prospects. McClayton notes that, especially for clients in areas with a short season, rental income will likely provide a nice supplemental income but won’t cover all the costs of home ownership.
Managing Your Property
If you’ve decided buying and renting out a home is the route for you, think about how involved you want to be — managing a rental can be quite a bit of work. Do you want to field calls in the middle of the night if the water heater goes out? Be responsible for marketing your property to potential renters? Create and execute your own rental contract? If not, it may make more sense to sign on with a company that rents homes in your area. “Some homeowners want to be more hands on, but we are here to cater to their needs and take care of all the details,” says Milovich.
A rental management company will charge a commission, such as a percentage of the rental cost, to take care of all aspects of renting your home. It simplifies the process for owners and can also result in greater earnings, as the company is often able to secure more bookings than an owner who goes it on their own. The rental company can also help navigate state and local legislation regarding rentals, which has recently become more extensive in response to the burgeoning online rental marketplace.
If you do decide to pursue renting out your home, you can still enjoy it whenever you want — just designate certain dates to be blocked off for your personal use and get ready for a great vacation!Edit Module