A Guide for Vacation Home Owners in Crisis, Part I

By George Volsky, Instant Software - Director of Research

Send your Homeowners my article, A Guide for Vacation Home Owners in Crisis: What Not to Do/Expect If Your Home Is No Longer Affordable

Download HomeOwnerGuideArticle

I just spoke to a manager who is getting calls from homeowners concerned about declining bookings.  She is concerned her homeowners will think she is making excuses if she refers to the “bad economy.”

Homeowners sometimes find it easier to accept unpleasant news if it comes from an expert other than their rental manager.  In last week’s blog I mentioned I would make a homeowner guide available on our website.  After listening to my manager friend, I decided to summarize the homeowner guide to give you an idea of how it might help.

The Problem – Short and Simple.  The Internet, economy and financial markets have conspired to decrease the value of vacation rental homes as investments and to increase their carrying costs.  Many homeowners can no longer comfortably afford the investment. 

Your Options.

• Bite the bullet, dig deeper into your pocket, and risk more losses or
• Sell your home, perhaps for a loss.

Educate Yourself Before Acting.

• Be cautious about “solutions” that could add expense or stress to your life;
• Don’t change managers or try rent-by-owner without finishing this article.

The Problem Has Six Facets—None Controllable by Rental Managers.
Read Attached Homeowner Guide.


When Rents Rise or Fall, they Alter Which Investors Can Own Vacation Homes.  Rents periodically rise and fall. When they fall (the risk investors take), financially stretched homeowners are forced to sell to investors who can afford the carrying costs.

When Must I Sell at a Loss?  When you can’t justify putting more money into the home and your home appears overvalued or financing is unavailable.

What about Self-Management (Rent-by-Owner)?

• Ignore the Hype. You will not “save” money so much as “earn” doing dirty work;
• The Real Challenge. Not advertising and booking but service;
• What Managers Do.  Managers are on-site experts who forestall/fix problems;
• Problems Arise Constantly;
• Service Is Hard To Get. A homeowner can’t get repairs as quickly as a manager;
• Stress.  Renters are difficult and stressful to deal with;
• Reliable Workers. Managers have back-up cleaners and are on-site;
• Good Rent-Owners Become Managers.  Management is that hard;
• Other Problems. Occupancy tax, credit cards, and stress.

There are some other considerations that need to be taken. So, tune back in on Friday morning to read Part II of this article.

Comments

[Philippines property]

Great info in here. Thanks for the information you post.

Deirdre G