Having a Lake Tahoe property manager that is comprehensive in their services and rental program is a first and important step when selecting a manager.  Having the luxury of being billed by only one service, and only having to schedule with one company makes your life a lot easier.  However, having a diversified and multi-tasking company can create room for error – being spread too thin, reliant upon too many people for a smooth operation, and can require a high calber of person to  manage such an operation for not only your home, but the 10’s or 100’s of homes they manage!

When looking for a property manager in Lake Tahoe keep these things in mind.  You want them to make your life as easy as possible, afterall that is what they are there for, but you want them to remain effective, organized, and capable of producing the results.  Results are the most important thing in this industry.  Results give you peace of mind, ensure your guests and home are taken care of, further escalating your success in the business of renting your home.  A broken system produces nothing but broken results.

This dynamic of needing a Lake Tahoe property manager capable of multi tasking, yet not becoming ineffective is something to always consider when interviewing prospective companies and agents.  On that note, when you go to a meeting or invite a manager into your Lake Tahoe property to discuss services, one of the most important things to do is read the person you are talking to – get a feel for them.  Although a well devloped business system, fancy website, nice business card and a guarantee are all nice things when deciding to sign your home over – at the end of the day it all comes down to a hand shake and looking the person in the eye and gauging their authenticity and sincereity.  Moreover, you are reading their capability.  Can this person really handle this amount of responsibility?  WIll this Lake Tahoe property manager be effective in managing my home?  Will they make my life easy and truly be good at what they do?  Will they survive and stay consistent in their committment to quality?

Often times, just reading someone will tell you more than any pages and documents ever can.  Although a bit off track, I felt it was important to mention these concepts when looking for a Lake Tahoe property manager, and the importance of these different elements of such companies.  The bottom line is find one that is diversified to meet all your needs, but capable of doing such and will remain effective in producing the results you are looking for.  I know this all seems common sense, and to most it is, but for those naive to renting a home and looking into this industry for service providers, I hope it can help.

If you have any questions regarding this post and the topic, feel free to contact us at www.VacationRentalAssistance.com.  We are always happy to help owners looking for solutions in this business.  We are also happy to discuss our Lake Tahoe vacation rental property management, cleaning, and hot tub services!

Until then, best of luck and regards!

CF

So the economy has crashed, and we are experiencing a recession – so what is it doing to the Lake Tahoe Vacation Rental Industry?  That’s a good question that many are asking so here are my thoughts as a local property manager with experience working in this immense local industry.

The recession has folk certainly watching their budget more, and cutting back their expenses and unfortunately vacation is one for the expenses that can be avoided.  This is inevitable and it is certainly having an impact on our local industry.  I have spoken with other reservation agents that are several hundred thousand dollars behind in booking fees in comparison to the year before.  But considering the down economy and the uncertainly in this economic climate, there are some things that are working for the Lake Tahoe vacation rental industry.

In fact, I recently read something that said Lake Tahoe was one of the best vacation destinations in this economy.  Why?  Well for one, Lake Tahoe is located to some major population centers.  2 hours from Sacramento, 3.6 hours from the San Francisco bay area, and only 7 hours from Los Angeles.

Many families are no longer traveling abroad, postponing trips to Hawaii, Mexico, Europe and beyond.  Instead, they are often driving to more local destinations in an effort to reduce costs while still ‘getting away’.  In addition, Tahoe offers both winter and summer recreations that are unique to this area.  World-class skiing, and world-class outdoor activities will always lead people here for vacation.  Moreover, vacation rental are quickly becoming a more mainstream way of traveling and lodging, creating a situation where the Lake Tahoe vacation rental industry will continue to triumph.

One factor that should be quickly addressed is that many second homeowners here in Tahoe have turned their property into a vacation rental because of the economy and a need for an additional income.  This has flooded the market with vacation rentals so it is as important as ever to be working with a solid team of local service providers, and do what it takes to give your property the edge it needs to rent well.  That is a topic of discussion for another post.

As a local manager, I expect this winter to be great.  Reservations are pouring in, and the forecasts for the winter are strong, expecting above average snowfall.  This weather prediction, coupled with Tahoe convenient location, and the steadily growing number of vacation rentals are promising factors that this will be a great season here in Lake Tahoe.

CF

As many second homeowner knows, trying to find a trustworthy and reputable management company is like pulling teeth.  It seems like property managers have the same reputation as a poor used car salesman – because the truth is, there are many neglectful, dishonest property managers out there that take advantage of their situation.

Nonetheless, what are your options!?  Even with the the dawn of a new era in vacation renting with companies like VRBO and Home Away that allow owners to market and advertise their homes themselves – they are still faced with having to find someone they can trust as a local resource!

Although it may be a duanting task, we are here to tell you it is not impossible to find a management company with integrity, and better yet, that they are out there!!

Here are a couple tips for homeowners when they go looking for a local management company:

• Look for some reviews! Use sites like Yelp, Merchant Circle, and Google to read reviews about the company.
• Beware of getting referrals from random Real Estate agents and offices as many of them are contracted with rental agencies, etc.
• What is the company’s business model?  Are they spending most their energy marketing to guests, or taking care of their owners?
• What is the size of the company?  How many homes do they manage.  Many companies will brag about how great they are having hundreds of homes, and although this can be a testament of their success, it can also be a sign of their inability to give you the focus and attention you are looking for.  Don’t be afraid of working with a newer and smaller company!

You can find peace of mind

If you can sift through the companies, there is always someone there offering the service you need that has some integrity; you just need to be patient.  When it comes to having someone look after your home, don’t rush!  Just know that there are companies out there, that will earn your respect, will satisfy your requirements and leave you resting well at night that your new cash flowing asset in Lake Tahoe is being looked after properly!

Thanks-

CF

Don’t listen to the naysayers. Rentals can cover your second-home costs if you’re careful when you buy and you follow these 3 simple rules.

By Liz Pulliam Weston

The conventional wisdom is that you can’t make a vacation home pay for itself. Renting out your second home for a few weeks a year can help defray your expenses, sure, but most people find their properties fall far short of making a profit.

One former stay-at-home mom, however, is convinced that most vacation homes can generate positive cash flow, paying for themselves even before the potential tax benefits and appreciation are taken into account.

Christine Hrib Karpinski says she’s built a small empire of profitable vacation properties, along with a sideline business in teaching other people her techniques. She recently self-published a guide, “How to Rent Vacation Properties by Owner: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment.”

Karpinski sells the dream that vacation homes can be affordable for just about anybody who’s willing to put in the time and effort. Her three basic tenets:

• Vacation homes need to be rented 15 to 17 weeks a year in many areas to break even. Karpinski bases that estimate on the assumption that one month’s mortgage payment would equal one week’s rental income in the peak season. More expensive homes would need to be rented longer.

• Internet advertising is essential. You need to reach the widest possible audience of potential occupants to keep your place solidly rented. Karpinski posts each of her properties on three to five Web sites, at a cost of $100 to $150 per property per site.

• Owners need to cut out the middlemen. Management companies take anywhere from 10% to 60% of rental income, making positive cash flow impossible, Karpinski says. She contends that handling rentals and maintenance isn’t that tough, even long distance. The Atlanta resident owns properties in the Florida panhandle, 300 miles away, and is in the process of purchasing another in North Carolina.

“We put $8,000 down on one property in the Panhandle (in 1998), and we’ve probably received $200,000 in positive cash flow and tax benefits,” Karpinski says. “Plus, that place has appreciated nearly $500,000 … and it hasn’t cost us a penny out of pocket.”

(You can write off mortgage interest and property taxes on a second home even if you don’t rent it out; if you do, you typically can deduct a portion of your other costs, such as utilities and maintenance. In addition, you can write off up to $25,000 in rental losses if your modified adjusted gross income is under $100,000. That particular tax break is phased out as your income climbs, and disappears entirely when your MAGI is $150,000.)

Second-home ownership on the rise

Karpinski’s certainly picked a growing market in which to promote her vision. The National Association of Realtors estimates that 445,000 second homes were sold last year, up 24% from 2001, as baby boomers in their peak earning years sought vacation properties (and alternate investments to their faltering stock portfolios). The association believes that nearly 7 million properties nationwide are now second homes.

The vast majority of these homes were purchased primarily for recreation, and only 15% of the owners surveyed rented out their properties even part-time.

That percentage is likely to climb, though, as soaring property values make buying a second home a more expensive proposition, says David Hehman, CEO of Escapehomes.com, an online marketplace for vacation home sales and rentals.

“More and more people are looking to rent to defray costs,” Hehman says. “The economics of owning are a lot harder if you don’t rent.”

Consider less expensive areas

But making a property pay for itself is a whole different matter, Hehman says. In many areas, weekly rental rates have remained flat even as sale prices rise, he says. The economics are better in relatively inexpensive areas such as Myrtle Beach or many areas of Idaho and Montana, he says, but most popular coastal and ski locations have already soared too much in value.

“There are very few (situations) where it’s going to pencil out as a cash-flow positive,” Hehman says.

In a few resort communities, a kind of rental backlash has set in, as year-round residents complain about noise and trash generated by transient visitors. In some Lake Tahoe communities, for example, vacation-home owners now have to pay a fee and obtain a permit if they want to rent out their properties for less than 30 days at a stretch.

“That can really restrict the income potential” of a property, Hehman says, because few busy Americans can afford that much vacation time.

Beware bad managers

Unlike Karpinski, Hehman believes a good property manager is all but essential if you’ll be renting out a vacation property, which typically is at least a couple of hours’ drive from the owner’s primary home. He advises talking to several real estate agents and other owners to find one that charges reasonable fees, aggressively screens potential tenants and stays on top of maintenance and repairs.

A bad property manager can be a nightmare, however. Consider the experience of Gayla Berry, who hired a property manager for her first vacation rental, a condo in Destin, Fla., a six-hour drive from her home in Jackson, Miss. The company rented the property for far fewer weeks each year than Berry needed to break even and once let the condo to a group of rowdy young people who set off the sprinklers in the master bedroom.

“The property manager kept telling me they’d take care of the damage,” Berry says. “When I finally went down there, the beer cans were still in my condo.”

What really irked her, though, were high bills for carpet cleaning and minor repairs, such as $25 for cleaning a VCR head, on top of 30% commissions.

“It’s like they try to nickel and dime you to death,” Berry says. “You wonder if one of their brothers or sons owns a carpet-cleaning business, and you don’t even know if the carpet’s actually being cleaned.”

Your purchase price is critical

With Karpinski’s encouragement, Berry fired the property manager a few years ago. Last year, she purchased a second unit that she also rents. Berry says she invests an average of five hours of work a week placing Internet ads, handling e-mails and taking care of any maintenance issues.

Both properties are booked solid through the summer and more than pay for themselves, Berry says.

“I don’t have a mortgage on the first (condo), but my yearly expenses like taxes, insurance, light bill, phone bill and cleaning are $6,000, and the rents (total) $22,000,” Berry says. “Even if I had a mortgage, it would be paying for itself.”

But again, the price you pay for your property is critical. Marti Swift of Louisville, Ky., owns two units in the same Destin complex and both break even, but prices have nearly doubled to $550,000 since she bought her second unit last year.

Even by managing the properties herself and keeping them rented 75% of the year at $1,100 a week, she couldn’t find a way to make a third purchase in the complex work, so she’s bought two cheaper properties elsewhere.

Still, what started as a way to afford a vacation home has become a part-time business, Swift says, and she credits Karpinski’s help in making it possible.

4 big questions to ask yourself first

If you’re considering buying and renting out a second home, ask yourself the following questions:

• Are you ready to do the research? You’ll need to come up with a lot of numbers, including an estimate of how many weeks the property is likely to be rented and all your monthly costs (including, but not limited to, mortgage, insurance, property and sales taxes, advertising, maintenance, repairs and cleaning). Talk with a number of real estate agents and other owners in the complex or area about their experience with rentals so you can more accurately gauge the demand and income potential.

You’d be smart to get a tax professional’s help to sort through the potential write-offs and what they could mean for your bottom line. You’ll also need to research any local laws, covenants or property restrictions that could affect your ability to rent the property.

• Are you willing to give up the use of your property during the peak season? This is the conflict that keeps many vacation homes from being profitable. Demand for your property is likely to be the highest in the weeks your family most wants to be there.

• Are you willing to put in the necessary work? You’ll be the one posting advertisements, answering e-mails and phone calls, screening tenants, hiring cleaning crews and calling plumbers. You may need to make some unscheduled, last-minute trips to the property if there’s an emergency (although Karpinski says most problems can be handled over the phone).

• Can you hold on if things get tough? Real estate prices are booming in most resort areas, but there’s no guarantee that trend will continue. If appreciation slows or even reverses, it could take many years before your property rises in value enough to offset the substantial costs of buying and selling the property.

These days, many second homeowners are looking to get their dollar to go a little far and cut back some over head.  Second homeowners are looking at the once frightening option of renting their second home out to travelers from around the world.  This option is enabling owners to turn their home from a liability to a cash flowing asset, which many of us are looking for right now.

With the internet marketing movement, several owners now have the ability to market their properties from the comfort of their homes to owners form around the world.  Companies like Vacation Rentals By Owner (VRBO) offer hosting services to homeowners in which you can pay a yearly fee and upload a personal listing to your home for travelers around the world to see.  For less than $1000 a year you can earn tens of thousands a year in booking fees.

Although companies like VRBO make renting your second home a cost effective solution, owners are still faced with many challenges such as coordinating cleaning, hot tub services, quality control and on call services for their guests.  Nonetheless, VRBO has created a situation here owners can do some of the work themselves (placing ads, marketing, etc.) and employ a local resources and save them self 20% + in management fees!  In this economy, full service property managers are hurting because owners realize with as little as a couple hours a week can save thousands a year!

So – our advice for you!?  Find a local company that can help you manage your bookings and offer quality control for you and your guests while you sit back and manage a several thousand dollar cash flowing asset from anywhere in the world so long as you have an Internet connection and a phone.  Another company that is about to rise up into this industry and offer a new service for owners fit perfectly for the future of this industry is Vacation Rental Partner or VR Partner.   Vr Partner, like VRBO is primarily targeted for owners looking to manage their reservations themselves without the headaches of processing credit cards, managing an availability calendar, and cont

acting all the parties involved to make a booking go smoothly and problem free.  Unlike VRBO though, VR Partner offers many solutions to vacation rental industry service providers!

Its a tough world out there, but with a little bit of research, and some honest service providers, you can create a comfortable situation for managing your home!  Best of luck

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CF