When Karen Logan received zero offers on her Lake Tahoe home last year, she decided it might be a better idea to rent it out instead.
“I’m retired, living on benefits, so I need the extra income,” she told us.
Logan’s 3-bedroom lakeside home now rakes in $1,800 each month, and sometimes $1,200 per week during holiday times. She’s waiting until the summer, when she plans to put her house back on the market to see if any prospective buyers will be interested.
“If it doesn’t sell by September, I’ll probably be renting it out again,” she said.
Logan isn’t the only one who has to rent out her vacation home. More and more Americans are doing exactly the same thing, either because they don’t want to sell their homes for a loss, or because they simply can’t find a buyer. By doing so, people can pick up a few extra bucks whilst waiting for the vacation home market to recover.
Of course, the result of all this is that there has been a deluge of new listings in the vacation rental market, which means rents are staying low and Americans have wide ranging options when it comes to their holidays.
The market for vacation homes is doing even worse than the regular market, with sales down 50% from their 2006 peak. In 2010, it was reported that the median sales price for a vacation home had dropped to $150,000, down 26.5% on what it was five years ago.
At the Sunburst Beach estate in Northwest Florida, things are not doing any better. Almost 20 of the estate’s 80 homes are currently listed for sale. “However, we’re lucky to sell more than two or three in a year,” said a downcast Sunburst owner Steve Howard.
So instead, vacation home owners are resorting to renting rather than just doing nothing.
“It’s the right thing to do. In these difficult times a change of tactic is necessary,” explains Brett Williams of Agate Bay Realty Lake Tahoe, who is acting as Logan’s property manager.
According to Homeaway, the online vacation rental service, paid listings on the site increased by 22% in the last year, totaling 527,535. They also said that vacation home owners can earn around $35,000 annually from renting their properties out.
Many travelers, and especially families, prefer renting homes because they are a lot cheaper than hotels, say Homeaway. A five bedroom home in Florida can be had for between $150 and $200 a night, while the same rate would only afford rooms in a relatively low-end hotel.
Vacation properties also offer more space, more privacy, and more amenities, Homeaway said.