Owning a vacation home can be a really good investment. As with any real estate investment, you always have to protect your purchase, and one fear most vacation homeowners have is that the renter is going to destroy their property. Here are a few tips to ensure your vacation home is kept in tip top shape.
Download Your FREE copy of ‘How to Rent Your House!
Renting your house is a great way to enter the world of real estate investing, but most first-timers (understandably) have a lot of questions. Fortunately, the experts at BiggerPockets have put together a complimentary guide on ‘How to Rent Your House’. All the skills, tools, and confidence you need to successfully rent your house are just a mouse-click away.
5 Tips to Protect Your Vacation Property Against Renter Wear & Tear
Declutter Your Vacation Home
When you are decorating your vacation home, make sure you do not have a lot of little small trinkets lying around that are fragile. Most of the time, the vacationers who are going to be staying in your home are families who have small children. Make sure that anything that is fragile is put up on higher shelves or hung higher on the wall.
Use Your Owner’s Closet
If one of our owners has expensive property, such as a nice juicing machine or an Xbox, we put these items in their owner’s closet for them and deadbolt the door. These are items that unfortunately a vacationer might take home with them. The key is to make sure that the vacation homes are nicely equipped, but more expensive items should be put away. After all, someone is not renting your place because it has a nice juicing machine.
Beware of Your Price and Who You Are Renting to
During the slow season, it is easy to drop your nightly rate to the floor just to get guests in your house, but you need to be very careful with this strategy. Lower prices usually bring less than desirable guests.
A few years ago, Disney World was offering free meal plans for guests who stayed at their properties during September and the first part of October. To combat this, we dropped our rates to the floor, and this proved to be a big mistake. It’s not that the guests beat the houses up, but they were always looking for a discount. I even had one guest who called me and complained that the traffic was so bad getting to Orlando that they did not get to the property until after midnight, and he wanted that night refunded back to him since he did not stay in the house on that day.
If you are renting the property out yourself, make sure you know about who you are renting to, and don’t drop your rates to the floor just to produce some income. It doesn’t make good business sense for guests to pay you $500 to stay in your house if they do $600 worth of damage.
Charge a Higher Security Deposit
Most guests know that they are going to get their security deposit back so they are usually not that worried about putting up $500 to $750. I suggest you have the guests put this amount on a credit card and then also have them sign a rental agreement, which spells out specific reasons why they would not get their security deposit back. I have heard some owners say they want the security deposit in form of a check or cash, but I have found that this does hamper your bookings, as most families do not have an extra $500 to $750 just laying around in their checking account.
Another thing you might consider is charging every guest a property protection fee. This fee is a non-refundable fee charged to the guests prior to them staying in the house, and it works just like insurance. It covers any accidental damages done to the property up to $500. The fee ranges from $50 to $75 per rental. Most management companies have gone to this model, as it is a much easier on the accounting department.
Have an Introductory Letter to the Guests
I strongly suggest having an introductory letter written to each guest laying on the kitchen counter for them to read once they get to the house. This letter can be a simple form letter with a picture of the owners of the house, and it should tell the guests that you hope they have a great time in your vacation home. The letter should also explain how much you love the house and the pride you take in it. We have found that guests typically take better care of the house when they feel they have some type of connection to the owner.
All in all, most guests will take care of your vacation home, but there is always that 2% who do not respect anybody or anything.
How do you keep your properties in tip top shape?
Leave your comments and tips below!