Big
Bear Real Estate - Investing with a vacation rental
Helping
Turn The Dream of Second Home Ownership Into Reality.
Investing
in a vacation rental can be a very rewarding experience. You can own
an asset that you get to use and enjoy – Big Bear resort real
estate – while that same asset can help pay for itself and appreciate
in value. Big Bear Vacation rentals, also called resort rentals, are
single-family homes, cabins, and condos that are offered for rent
on a short-term basis. This distinctive type of vacation accommodation
has many advantages to the consumer and property owner, and vacation
rental use is strong compared to all sectors of the travel industry.
Big
Bear Vacation rentals offer large living spaces often with multiple
bedrooms, kitchens, and unique floor plans and décor. Many
include their own private outside areas such as patios, decks, and
yards. Also, because of the recent tumultuous events throughout the
world and in the United States, there is a heightened sense of security
in staying at a single-family home or small lodge when compared with
the high profile of large hotels and resorts. In addition, many people
are reluctant to travel far for vacations. Accordingly, resort areas
in the contiguous United States, especially drive-to areas like Big
Bear Lake, are seeing higher demand for accommodations. These factors
have caused an increase in demand for the unique amenities presented
by vacation rentals – especially those located in resort areas,
such as Big Bear, that are only a few hours driving time from major
metropolitan areas.
Vacation
rentals are usually just a second home owned by a private party and
managed by a professional rental agency. Thus, Big Bear vacation rentals
offer a convenient route to owning a second home. And second home
ownership is on the rise.
According
to the 2003 National Association of Realtors® (NAR) Profile of
Home Buyers and Sellers, in the first quarter of 2003, 15 percent
of homebuyers were either buying a second home, owned a second home
or were buying a new primary residence and keeping their existing
property as a second home. According to the 2002 NAR Profile of Second-Home
Owners, nearly one-third of all these second-home owners use their
properties as an investment or income-producing vehicle. NAR further
declares that second homes have been outperforming the stock market
recently. For example, in 2002 the median price of second homes had
risen 26.8 percent in two years, and that is at a time when the stock
market saw diminishing returns.
When
buying a second home the most important thing is to buy the home because
you really want to own and enjoy the property. Making your second
home in Big Bear a vacation rental will help offset the costs of ownership
– mortgage, taxes, maintenance, and other expenses – but
it is unlikely your vacation rental will pay for itself entirely.
And there are ways to improve the profitability of your investment.
Location is the primary factor to consider when looking for a good
potential vacation rental. The best vacation rentals are obviously
located in areas where people want to vacation. Resort areas are the
natural choice. Availability of many activities is important, and
if there are activities associated with more than one season the potential
number of rental days increases dramatically. An area that has skiing,
hiking, biking, shopping, a lake or beach, and boating is a best bet.
And as noted above, a location that is only a few hours drive from
one or more major metropolitan areas is ideal.
The
next most important factor is finding a good property manager for
your Big Bear real estate investment. Finding a professional, experienced,
and successful property management company is easy if you follow some
simple guidelines.
First,
look at what services the management company provides its guests.
Do they provide housekeeping, or does the guest have to clean up after
themselves (and if maid service is not provided, do you want to trust
a guest to do a good job). Is guest check-in easy – does the
management company have a nice office with convenient hours, or is
a key left under the doormat. Are linens, soaps, and other amenities
provided, or does the guest have to bring their own. Remember, the
easier it is for a guest to enjoy their vacation, the more guests
– and rental nights – your house will have.
Next,
how does the management company get those guests. Marketing is what
generates sales, so look at the type and quantity of the company’s
marketing. Are they on the Internet, and is their website easily found
with a simple search. Does the company advertise on television and
radio. Do they use direct mail and print advertising. Do they have
billboards or other outdoor ads aimed at the motorists of the drive-to
market. All of these types of marketing are important when it comes
to filling beds.
Remember,
management fees (the percentage of the reservation that the management
company keeps for its services) vary by area and company. And while
the amount of the fee is a consideration, a higher fee doesn’t
always mean less money to you. So focus on the estimates of how much
money you will net, not on the amount of the fee itself. Often a company
that charges a little more can afford to offer much more marketing
and guests services, and will have higher occupancy rates.
Once
you have found the location and the management company, its time to
find your second home. Remember, make an informed buying decision,
not an emotional one. Rely on the advice and counsel of your chosen
professionals: your accountant, attorney, mortgage broker, and insurance
agent. Find a real estate agent that knows the not only the sales
market, but also the rental market. Ask your chosen management company
for guidelines on what neighborhoods, property styles, and décors
are the most popular with renters. Then use this information to find
a house or cabin that you really want to own and enjoy – and
you’ll be on your way to having a second home that can help
pay for itself while it appreciates in value