The post below is a guest blog written by a friend of mine who owns a property management company. They specialize in high end properties and I have clients who use them as their property management company. The clients are very happy with their services. Of course, you will want to do as they did, and interview several companies first.
I have one thing I want to add to his post, coming from the Realtor perspective: If you would like to do a Tax Deferred 1031 Exchange and roll the gain from your current second home into your new one without paying taxes on it, renting it for a while could be to your benefit. It may allow you to defer the taxes on the gain from your current vacation home that you do not rent, into a new one that perhaps you hope to retire to. It does mean changing the status of your property for 18 months or so, and it would also mean renting the replacement home for a while too. Talk to your tax advisor to see how it might work in your particular situation, but it may be worth it financially to rent your home, even if you would rather not. A little pre-planning goes a long way!
Here are Mark Waldman's reasons to consider renting your home:
If you own a high-end vacation home, you've probably already thought about whether or not to rent the home while you're not there. For many second homeowners, this makes financial sense. But for other owners, the decision isn't necessarily financial. However, there are many reasons why you need to consider renting your high-end home - and many reasons why a reputable property management firm can actually help you take better care of your property and maintain (or increase) its value. Here are just a few:
· Unoccupied homes suffer more damage - Think about it. Mountain homes, in particular, are vulnerable if left unoccupied for long periods. Freezing water pipes are a concern. There's potential damage from violent storms and snowfall. Wild animals can also be a nuisance. If no one looks in on your home for months at a time, even a small problem can turn into a large and expensive one. · That "warm, welcome" feeling - Just about any home feels better if it's occupied regularly. It's a subtle difference, but one that you can notice.
· Forget the myth about renters "trashing" your home - Your high-end home is going to attract high-end renters - people that appreciate the finer things in life, like your beautiful vacation home. Actually, renters help maintain your property's condition and value by quickly alerting the management company of problems that need to be fixed. · Regular cleaning - Another benefit of renting your property is that, after every rental, your home receives a thorough cleaning and dusting. When you do use the property yourself, you'll walk into a clean, fresh-smelling home - rather than starting your vacation with a mop and a feather duster.· Peace of mind - Knowing that your vacation investment is being cared for by a good property management company is a tremendous benefit - whether you live 100 miles or 1,000 miles away. · Managing your investment. Your vacation home is an investment. Your other investments - stocks, bonds, funds, etc. - most likely have managers that watch them to make sure they are earning you the maximum return on your money. A good property management firm will do the same for your vacation property investment.
When you're considering a property management company, there are many factors to consider, including the company's reputation, maintenance and cleaning staff, and commitment to marketing your home to reliable, high-end clients. Ask around. Talk to other owners in the area. And make sure you talk to several firms - it will become obvious which management companies possess the professionalism to help you take care of your investment.
Mark Waldman is the owner of Summit Mountain Rentals, which specializes in high-end vacation properties in Frisco and Breckenridge, Colorado. Mark also owns the Hotel Frisco, voted "Best Lodging in Summit County" by Summit Daily News readers in 2003, 2005, 2006 and 2007. For answers to your questions on managing you vacation property, call Mark at 1-800-383-7382, or e-mail, firstname.lastname@example.org. Also, be sure to visit their Web site at www.summitrentals.com.
Please note that the above photo is of a home in Waterdance, and it is not for rent or sale. It is simply a photograph of a home that is very representative of homes in the area.
Blog updated: The box about not having permission to post incorrectly is confusing to me. I do have permission to post this information, even though I did not write it. It is not copyrighted...just to clarify the red X below! I am posting this "pointless" post anyway, as I think my guest blogger had good information to share.