Author Topic: Renting out an island house for the weekends  (Read 7455 times)

Skinnyneo

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Renting out an island house for the weekends
« on: February 14, 2012, 06:50:55 PM »
My family owns a nice house on an island in Washington state.  It was left to us by my grand father and it's something I really want to keep in the family.  However my grand mother, the current owner, wants to sell it as it's a drain on her budget and the house really only get's used about once a year when I come to visit the States (I live in Japan).  I have started to pay for half of the expenses to make it easier on my grand mother but I want this place to start generating some income for us.

In my mind the best case scenario is to get this place rented out as a weekend getaway.  I like this idea for a few reasons.  As a weekend getaway we can still use the house when I come visit or whenever a family member requests it.  With people only in it part time there is less wear and tear on the house.  I hope that because people would be there for only short periods of time they would treat the house with more care (maybe I'm wrong about this). 

Personally I would like the house to be paying for itself at least, if not generating a bit of a profit for us.

The problems.  Like I said I live in Japan and not physically around.  My mother, and step family are however they all have full time jobs, families, and not much time to be looking after a house.  I have no experience in renting out or advertising a place for rent whatsoever.  In addition I don't know much about property management companies, who to trust, etc...

So I'll ask the MMM forum, what's the best first step I can take to get this wonderful place generating some income?  Are weekend getaway properties a viable option or should I be looking at renting this place out full time?  Is it possible to manage a property from over seas?

Thank you, and I really appreciate any feedback.

arebelspy

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Re: Renting out an island house for the weekends
« Reply #1 on: February 14, 2012, 08:22:42 PM »

So I'll ask the MMM forum, what's the best first step I can take to get this wonderful place generating some income?  Are weekend getaway properties a viable option or should I be looking at renting this place out full time?  Is it possible to manage a property from over seas?

I wouldn't try to manage it yourself overseas, especially not a short-term rental.  A longer rental (year+ lease) could be done, I suppose, but even that would be difficult.

How big is the nearest town?  Could you advertise in their newspaper, or something to that effect, looking for a property manager/handyman to hire?

The other issue though is that if they are dishonest, you won't have any way to know.  They could very well tell you it's rented for only 2 weekends when it was actually rented 6, and just pocket the extra cash.  So it's tricky.
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MMM

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Re: Renting out an island house for the weekends
« Reply #2 on: February 14, 2012, 08:46:43 PM »
Sounds like a neat dilemma!

First of all, if you mention the location, you might find someone right on this blog who is familiar with the area. The "Mustachian Marketplace" category might even serve to find customers (heck, even I might be one someday, as I love visiting the Pacific Northwest!).

Secondly, VRBO (Vacation Rental By Owner) and AirBnB, as well as the closest branch of Craigslist might be good places to advertise it for rent. The Craigslist would also allow you to find the property manager/handyman.

I've considered remote vacation rentals several times in the past. I think that technology now makes things easier for remote owners. For example, you can fit the house with an internet-enabled locking system and thermostat and even cameras which will allow you to monitor and control conditions inside or outside the house from abroad. This would ensure that there was no funny business going on and help reassure you as well.

arebelspy

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Re: Renting out an island house for the weekends
« Reply #3 on: February 14, 2012, 08:50:39 PM »
I love the idea of cameras, but how do you make it not creepy or invading the privacy of the renters?  It's an intriguing idea I'll be thinking about though.

A property manager in the area is going to depend on how big the island is, thus my question about the largest town nearby.

Here's another thing to consider: what about selling it, sticking the money into something that will generate income (say, dividend stocks, or whatever your flavor of choice is), and using that generated income to vacation there and rent a place while you're there?

You may make even more money doing it that way than keeping the house.  I.e. if the proceeds from the sale generated 10k/yr, and you could vacation there for 5k/yr, you suddenly gain an extra 5k/year.

Something you may want to look into if renting it doesn't work out.
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MMM

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Re: Renting out an island house for the weekends
« Reply #4 on: February 14, 2012, 09:53:13 PM »
I was assuming the camera would be on the exterior of the house, just to monitor the grounds and the front door, much like they have in apartment buildings. That wouldn't be too creepy as long as the vacationers were told about it.

Your suggestion of selling the house and renting freely is also great. Skinnyneo should definitely run the numbers on that too, factoring in the time involved in owning, maintaining and managing it.

That's why I still don't really want to own a vacation rental - the numbers usually work out in favor of just renting one instead of owning and renting it out, except in the case of things like South Florida beachside condos -  where the purchase price is currently very low, but vacation rentals still fetch quite a bit on a weekly basis.

Skinnyneo

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Re: Renting out an island house for the weekends
« Reply #5 on: February 15, 2012, 03:50:07 AM »
I wouldn't try to manage it yourself overseas, especially not a short-term rental.  A longer rental (year+ lease) could be done, I suppose, but even that would be difficult.

How big is the nearest town?  Could you advertise in their newspaper, or something to that effect, looking for a property manager/handyman to hire?

The other issue though is that if they are dishonest, you won't have any way to know.  They could very well tell you it's rented for only 2 weekends when it was actually rented 6, and just pocket the extra cash.  So it's tricky.

It's located on Lummie Island which has a population of about 1000 I think.  The closest big town is Bellingham which has about 70,000-80,000 people. 

The idea of adding managing this place from over the Pacific on top of my already busy life makes me want to crawl into a turtle shell.  I'm thinking a property management is the way to go.  Of course I want the place to make a buck or two but even if it just starts breaking even I'll be happy.  But the point about honesty you bring up is valid.

Sounds like a neat dilemma!

First of all, if you mention the location, you might find someone right on this blog who is familiar with the area. The "Mustachian Marketplace" category might even serve to find customers (heck, even I might be one someday, as I love visiting the Pacific Northwest!).


Secondly, VRBO (Vacation Rental By Owner) and AirBnB, as well as the closest branch of Craigslist might be good places to advertise it for rent. The Craigslist would also allow you to find the property manager/handyman.

The house is on Lummie Island which for those who might not know is probably about as northwest as you can get and be on an island.  Until you hit Canada of course.  I'll try your advice once I have a clearer picture of what I want to do (and of course discuss with with G-ma!)

Craigslist never fails to be a goldmine for connecting with people, and yet I always overlook it!  I'll have to check this out.

Here's another thing to consider: what about selling it, sticking the money into something that will generate income (say, dividend stocks, or whatever your flavor of choice is), and using that generated income to vacation there and rent a place while you're there?

You may make even more money doing it that way than keeping the house.  I.e. if the proceeds from the sale generated 10k/yr, and you could vacation there for 5k/yr, you suddenly gain an extra 5k/year.

You bring up a good point.  I don't actually own the house myself so I can't ultimately make any final decisions on selling it or where those profits would go.  If it were sold I think the money would go to my G-ma and then eventually to the kids and grand kids.  Personally for me I don't want her to sell it as it was a place my G-pa really wanted to leave to his daughters and grand kids, plus the view is just amazing.  I also think as it's an island residence the value is only going to go up in the next 10 to 20 years as those kinds of properties become more scarce (this is nothing more than my gut feeling).  If it didn't have sentimental value I would look for other options.

My big problem is not physically being there.  I make pretty good money here in Japan so the money I am putting into the house isn't hurting me much (it's only been two months that I have been helping too).  But it is still money.  I'm also looking at trying to hit semi retirement in 5 years and perhaps full FI in 10 years and a house that is paid off on a beautiful island wouldn't be a bad place to spend some life energy.

What kind of things should one look for in a property management company?

arebelspy

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Re: Renting out an island house for the weekends
« Reply #6 on: February 15, 2012, 06:35:16 AM »

You bring up a good point.  I don't actually own the house myself so I can't ultimately make any final decisions on selling it or where those profits would go.  If it were sold I think the money would go to my G-ma and then eventually to the kids and grand kids.  Personally for me I don't want her to sell it as it was a place my G-pa really wanted to leave to his daughters and grand kids, plus the view is just amazing.  I also think as it's an island residence the value is only going to go up in the next 10 to 20 years as those kinds of properties become more scarce (this is nothing more than my gut feeling).  If it didn't have sentimental value I would look for other options.


In that case, shouldn't it be your grandmother's decision?  Or, if you want to keep it, you would be paying all the expenses?

I realize I don't know your relationship with your grandmother, but it seems a bit unfair to ask her to keep this property that belongs to her, ask her to pay the expenses (or even half, as above), and then use it.

Taking over all expenses seems the right thing to do.  And then, hopefully, getting it rented to cover those expenses and then some seems the Mustachian thing to do.  And of course giving her the extra profits (which she may even let you have, since you're doing the work of dealing with a property manager, etc.)

Just a moral issue to consider, money aside.

In any case, I think you're right about the property manager being the only way to go.

Do you have any other friends in the area?  Maybe they could manage it, at the cost of letting them stay there free some weekends...
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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richschmidt

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Re: Renting out an island house for the weekends
« Reply #7 on: February 15, 2012, 10:20:02 AM »
You bring up a good point.  I don't actually own the house myself so I can't ultimately make any final decisions on selling it or where those profits would go.  If it were sold I think the money would go to my G-ma and then eventually to the kids and grand kids.  Personally for me I don't want her to sell it as it was a place my G-pa really wanted to leave to his daughters and grand kids, plus the view is just amazing.  I also think as it's an island residence the value is only going to go up in the next 10 to 20 years as those kinds of properties become more scarce (this is nothing more than my gut feeling).  If it didn't have sentimental value I would look for other options.

My big problem is not physically being there.  I make pretty good money here in Japan so the money I am putting into the house isn't hurting me much (it's only been two months that I have been helping too).  But it is still money.  I'm also looking at trying to hit semi retirement in 5 years and perhaps full FI in 10 years and a house that is paid off on a beautiful island wouldn't be a bad place to spend some life energy.

It sounds to me like you ought to buy the place from your grandmother.  She wants to sell it, and you want to own it.  Then you can rent it out, etc.  Perhaps you'd find a good local property management / vacation rental company first, just to find out what kind of income and expenses you might expect.

Skinnyneo

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Re: Renting out an island house for the weekends
« Reply #8 on: February 15, 2012, 07:04:03 PM »
In that case, shouldn't it be your grandmother's decision?  Or, if you want to keep it, you would be paying all the expenses?

I realize I don't know your relationship with your grandmother, but it seems a bit unfair to ask her to keep this property that belongs to her, ask her to pay the expenses (or even half, as above), and then use it.

Taking over all expenses seems the right thing to do.  And then, hopefully, getting it rented to cover those expenses and then some seems the Mustachian thing to do.  And of course giving her the extra profits (which she may even let you have, since you're doing the work of dealing with a property manager, etc.)

Just a moral issue to consider, money aside.

In any case, I think you're right about the property manager being the only way to go.

Do you have any other friends in the area?  Maybe they could manage it, at the cost of letting them stay there free some weekends...

It sounds to me like you ought to buy the place from your grandmother.  She wants to sell it, and you want to own it.  Then you can rent it out, etc.  Perhaps you'd find a good local property management / vacation rental company first, just to find out what kind of income and expenses you might expect.

I probably should have been more clear in the op.  My G-ma isn't actively trying to sell, and I am in no way trying to change her mind one way or another.  We have talked about it and both agree at the moment trying to rent it out as a vacation house is the most advantageous plan.  In addition it's not that she is actively searching for a buyer or that she needs the money.  She knows that the market is down right now and selling it would not be profitable at this time.  Plus she also wants a place that the family can get together at or that any member of the family can use at any time.  When or if the time comes when she is trying to sell I would be the first one with a bid.

I wouldn't say she has given me free reign but I am currently the only one trying to make this work and she is very open to having me manage this project.

Unfortunately I don't have any friends back home with any experience in this kind of thing.

I'm getting a little side tracked however.  My main concern is trying to arrange all of this over the internet.  Or rather get as much preparation done over the internet as I can and really get the ball rolling when I come back for a visit this summer. 

Other than finding a property management company I can trust is there any other advice people have?  What is a good way to take payments?  Other than Craigslist or local papers are there good places to advertise?  What kinds of insurance would or should I be looking at?  What are things I should avoid? 
« Last Edit: February 15, 2012, 07:07:50 PM by Skinnyneo »

fire

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Re: Renting out an island house for the weekends
« Reply #9 on: February 23, 2012, 10:57:47 PM »
I think MMM mentioned the best places to advertise already  http://www.vrbo.com/ and http://www.airbnb.com/.  I don't own any vacation rentals unfortunately, but I have used VRBO a few times to find places to stay on vacation.  The last time I used it was to rent a condo in Puerto Rico for a weekend.  The owner lived in New Jersey, all the payments and communications were handled online, and he had management locally in Puerto Rico to manage the property and deal with cleaning up after renters left.  I think with a good management team in place locally it shouldn't be too hard to manage remotely thanks to the internet. 

Skinnyneo

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Re: Renting out an island house for the weekends
« Reply #10 on: February 24, 2012, 12:09:03 AM »
I think MMM mentioned the best places to advertise already  http://www.vrbo.com/ and http://www.airbnb.com/.  I don't own any vacation rentals unfortunately, but I have used VRBO a few times to find places to stay on vacation.  The last time I used it was to rent a condo in Puerto Rico for a weekend.  The owner lived in New Jersey, all the payments and communications were handled online, and he had management locally in Puerto Rico to manage the property and deal with cleaning up after renters left.  I think with a good management team in place locally it shouldn't be too hard to manage remotely thanks to the internet. 

Thanks for the tip!  I'm registering on vrbo as we speak.

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Re: Renting out an island house for the weekends
« Reply #11 on: February 26, 2012, 04:23:23 PM »
Another idea is to scour the VRBO websites mentioned previously for properties in the area of your island home.  You will probably find other property owners who you could contact and get feedback re: property management companies.  There is a good chance that one of these local residents may want to make some extra income as a property manager.

Skinnyneo

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Re: Renting out an island house for the weekends
« Reply #12 on: February 27, 2012, 12:45:52 AM »
Another idea is to scour the VRBO websites mentioned previously for properties in the area of your island home.  You will probably find other property owners who you could contact and get feedback re: property management companies.  There is a good chance that one of these local residents may want to make some extra income as a property manager.

Good point bdub!  I'm working my way through getting registered on that site.  Have you every done this before?  I'm just a bit worried about a conflict of interest however.  For example a customer contacts him to rent my place and the PM says "It's full (even if it isn't) but check out this (his) place!" 

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Re: Renting out an island house for the weekends
« Reply #13 on: February 27, 2012, 05:29:47 AM »
The San Juan Islands are very popular with sea kayakers (I am considering a weekend kayak trip there myself for this summer). When you are ready to start renting, I recommend sending an invitation out to all the sea kayaking clubs you can find.

Skinnyneo

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Re: Renting out an island house for the weekends
« Reply #14 on: February 27, 2012, 11:58:58 PM »
The San Juan Islands are very popular with sea kayakers (I am considering a weekend kayak trip there myself for this summer). When you are ready to start renting, I recommend sending an invitation out to all the sea kayaking clubs you can find.

That's a great idea!  When Ski to Sea rolls around it is always super busy.  Appreciate the input!