What is the VRBO like up on Winni & Winnisquam?

[JasonG]

Wife and I are considering buying small beach homes in the area to rent out.

Since it is very seasonal, do VRBO (Homeaway.com,etc) listings in seasonal properties make sense in the region? By make sense I mean cover the mortgage, expenses, put some back toward the property to pay down the mortgage faster, etc. Not looking to make bank and live off it, just build equity over the long term.

Thanks!

[greeleyhill]

VRBO/Homeaway is very popular on Winni but when you say you are considering small beach homes, do you mean many cottages on the same piece of land or different properties around the lake? Reason I ask is simply from a maintenance perspective. It would be a full time job to travel around the lake maintaining your property. Homes on VRBO can do quite well (cover expenses and then some) but it all comes down to what you pay for the property (more importantly, what your financing costs are) and what you can get for rent. You have to do you homework to see what a fair purchase price is and then, what kind of rent you can get by comparing similar properties on VRBO. It's also worth thinking about the property being a year round rental vs just summer rental. We find that our June/July/Aug rental income gets us to break even, and all the off season income (skiers, pond hockey tournament, fishing derby, snow mobilers, leaf peepers etc) is extra to pay down the mortgage, make improvements and do repairs. Like I said - it's a math problem or more accurately - a finance question. You can definitely make it work but do your homework to understand cost vs. income. We've found it to be an exciting endeavor meeting lots of great people and building investment equity at the same time.

[JasonG]

VRBO/Homeaway is very popular on Winni but when you say you are considering small beach homes, do you mean many cottages on the same piece of land or different properties around the lake? Reason I ask is simply from a maintenance perspective. It would be a full time job to travel around the lake maintaining your property. Homes on VRBO can do quite well (cover expenses and then some) but it all comes down to what you pay for the property (more importantly, what your financing costs are) and what you can get for rent. You have to do you homework to see what a fair purchase price is and then, what kind of rent you can get by comparing similar properties on VRBO. It's also worth thinking about the property being a year round rental vs just summer rental. We find that our June/July/Aug rental income gets us to break even, and all the off season income (skiers, pond hockey tournament, fishing derby, snow mobilers, leaf peepers etc) is extra to pay down the mortgage, make improvements and do repairs. Like I said - it's a math problem or more accurately - a finance question. You can definitely make it work but do your homework to understand cost vs. income. We've found it to be an exciting endeavor meeting lots of great people and building investment equity at the same time.

Thanks for the thoughts on this. We have been looking into this recently with the Myrtle Beach area. But the tourist season there is a bit longer and I think even higher volume. But like anything, I am assuming the smaller cottages are easier to buy/rent out due to lower cost for us and the renters? Vs a $800k home, which I could not swing anyway!

[Descant]

When you buy at Sanibel, Myrtle Beach, etc there is a condo rental program and a management plan. Very little of that around Winni, so you have to be on top of everything yourself. Some real estate firms will do property management, but mostly, in their heart, they are real estate firms, not property managers.
The first year I had a (Weirs) Condo, it rented pretty good for the summer. Nothing in the fall. It was a lousy snow year and we had cancellations and said to ourselves, we won't ski either. Following winters, we rented cheap. long term. Much less hassle, then took the high priced short term folks in the summer.

Lakefront properties can be very price volatile. You really need to buy in a local recession and have some staying power. Not now.
Buy a nice 3-4 family or two, and use the profits to rent a beach house for a couple of weeks for yourself.

[ApS]

When you buy at Sanibel, Myrtle Beach, etc there is a condo rental program and a management plan. Very little of that around Winni, so you have to be on top of everything yourself. Some real estate firms will do property management, but mostly, in their heart, they are real estate firms, not property managers. The first year I had a (Weirs) Condo, it rented pretty good for the summer. Nothing in the fall. It was a lousy snow year and we had cancellations and said to ourselves, we won't ski either. Following winters, we rented cheap. long term. Much less hassle, then took the high priced short term folks in the summer. Lakefront properties can be very price volatile. You really need to buy in a local recession and have some staying power. Not now. Buy a nice 3-4 family or two, and use the profits to rent a beach house for a couple of weeks for yourself.Sickened by a series of promising, young, but thoroughly deadbeat renters, I took a 75% cut, and advertised my lakefront home for a full year—paid in advance.

I got a prompt response, but the renter turned out to be a "kept woman"! :eek: After a year, she eventually moved to a new home nearby, but I'd gained a full year without anxiety.
:look:

.

[BoatHouse]

Wife and I are considering buying small beach homes in the area to rent out.



Good luck finding them at an affordable price. Inventory is very low for "Small houses on the lakes"

[kauriel]

If you will be considering it over the next year I would recommend looking at the rental listings throughout summer to see which one's seem to get rented frequently and at what prices and with what features and amenities. I look at pricing and compare that to calendar availability - lots of availability means few rentals. I also look to see how many reviews there are - more reviews likely = more rentals. You will probably notice most rentals/stays are in the summer. Sept-May is much slower for rentals. Depending on location, bike week is a premium week for many rentals which is good because I find beginning of June to be slow since many are still in school.

[Biggd]

I rented for about 5 years when the economy was slow but the market got tighter and tighter and the prices kept going up and up. We use to have to wait until January to reserve a place because that's when my wife knew what weeks she could take off from work. By then pickings were slim and the best properties were booked.
I finally bought about 3 years ago at the right time. Now everything is up because of the economy. Rentals are high, prices are high, and property inventory is low so I'm not sure if now is a great time to buy. I feel fortunate I bought when I did.

[MeredithMan]

Last spring, we were seriously considering buying a place on/near the lake as purely a rental/investment, (we would never use it or have emotional attachment to it). We zero'd in on a water-access ranch that was listed for just under $400K. It had a rental history of somewhere in the $1200-1500/week during the summer, if I remember correctly. It was kinda a dump and needed a fair amount of work, although I distinctly remember the realtor saying to the effect of, "renters don't care...don't waste your money sprucing it up..." :eek::eek:

Bottom line is that even at 100% rented from say the end of June till early Sept, we would still be just shy of covering the mortgage, taxes, insurance, and other misc costs, (and that would've been with $100K down payment). Perhaps there'd be some rental money in the off-season, but in terms of our analysis, I did not count on that coming in. Perhaps as well, there'd be the increase in the value of the property over time, but in the end, I figured that I would keep my $100K in a portfolio of stocks and that would yield a better return with a lot less headache of dealing with renters and another property.

We walked away without making an offer, but amazingly, the place sold within a week of being listed at full list price!

I think it's a totally different story, however, if you are buying a place to be your family vaca place/2nd home that you just happen to rent out part of the summer to help with the expenses. In this scenario, maybe it's worth not covering the costs via rental, because you are making memories and most likely keeping the place long-term.

[Descant]

Lots of good experience here. Also buy or go the library and look at "Landlording" by Leigh Robinson. There are other good books on rental management and how to "do the math".

[Biggd]

Last spring, we were seriously considering buying a place on/near the lake as purely a rental/investment, (we would never use it or have emotional attachment to it). We zero'd in on a water-access ranch that was listed for just under $400K. It had a rental history of somewhere in the $1200-1500/week during the summer, if I remember correctly. It was kinda a dump and needed a fair amount of work, although I distinctly remember the realtor saying to the effect of, "renters don't care...don't waste your money sprucing it up..." :eek::eek:

Bottom line is that even at 100% rented from say the end of June till early Sept, we would still be just shy of covering the mortgage, taxes, insurance, and other misc costs, (and that would've been with $100K down payment). Perhaps there'd be some rental money in the off-season, but in terms of our analysis, I did not count on that coming in. Perhaps as well, there'd be the increase in the value of the property over time, but in the end, I figured that I would keep my $100K in a portfolio of stocks and that would yield a better return with a lot less headache of dealing with renters and another property.

We walked away without making an offer, but amazingly, the place sold within a week of being listed at full list price!

I think it's a totally different story, however, if you are buying a place to be your family vaca place/2nd home that you just happen to rent out part of the summer to help with the expenses. In this scenario, maybe it's worth not covering the costs via rental, because you are making memories and most likely keeping the place long-term.We rented a real 3br log cabin on lake Winnisquam 5 years ago and the Lady that owned it lived there all winter then moved out and rented it for June, July, and August. She had a friend in Concord that she went to live with in the summer and would come up every weekend to clean the place for new renters. 12 weeks at an average of $2500 a week = 30K, not bad but you give up the best season of owning a waterfront house. :confused: I'm sure the rent has gone up since then. It was a real nice place, probably worth close to a million by now but she had owned it for a long time. I guess her husband built it but he had passed away.

[JasonG]

Lots of insight here. Thank you!

[TiltonBB]

I have a rental house in Gilford on Winnipesaukee. I have been renting it out since 2003 using this site and Craigslist for advertising. It is always full in the summer when it is rented weekly, and I have had good luck finding one renter for October 1, through Memorial Day every year. The winter monthly rate is less than half of the summer weekly rate. The vast majority of the renters have been decent and respectful and the problems have been minimal. At this point over half of the summer renters come back every year so there are not that many weeks to fill.

One thing (and I may be wrong about this) is with a rental property your real estate taxes become a business expense. It is my belief that, despite the new limitation on the real estate tax deduction, you may be able to deduct beyond that limit depending upon the percentage of time you use the house. I would certainly check with an accountant.

[Geneva Point]

JasonG, the answer to your question is "no". On a cash flow basis, you'll put in more money than you get over the long term. Tax benefits may help but not much. The prime rental season is just too short. You'll only be able to build equity from market value increases over time (if any). Lake houses of all sizes are generally not good business investments.

[greeleyhill]

They must have had a bad experience... You can't just go out and buy any old property, expect to rent it and have everything work in your favor. You have to be patient, find the right property at a fair price and know what to expect for rent. f the math doesn't work out, keep looking, there are properties out there that will work! If you're able to use it for yourself from time to time then even better. How many listings do we see on VRBO all over the world? Hundreds of thousands? That many people can't be wrong.

[Biggd]

A friend of mine bought a beautiful log cabin up in Franconia Notch for $250K and he rents it out all year long on a weekly basis and does real well. He has a company take care of the cleaning and the rentals and still makes good money. He bought it purposely as an investment and him and his wife only use it themselves when there is a vacancy. But it's no where near a lake.

[JanN]

As someone who has rented for many years on the lake and have friends who do also, I think renters DO care and I wonder about a realtor who would say something like that.

We had rented at the same place for years, watched the owner neglect its upkeep to the point where we had to move on, found another great place where the owner does care and that makes all the difference to us!

Just sayin'...

[joey2665]

JasonG, the answer to your question is "no". On a cash flow basis, you'll put in more money than you get over the long term. Tax benefits may help but not much. The prime rental season is just too short. You'll only be able to build equity from market value increases over time (if any). Lake houses of all sizes are generally not good business investments.

I completely disagree. This is a very wide sweeping statement. I know many people who successfully rent their lake homes with good quality caring tenants. As far as equity increase, that all depends on when you buy and sell subject to the economy and market. I have sold two homes is the area and did fairly well.