Martha's Vineyard Real Estate : Is Buying a Home and Renting it Out to Help Cover Costs Still a Good Idea?
With the increase in inventory and the decrease in prices for home sales on the Vineyard, potential buyers for second homes are asking some tough questions. Is buying a second home and renting it out for part of the season still a good strategy? What's happening to vacation rental rates?
We asked six real estate brokers to assess the current rental market and offer their ideas and expertise.
Abby Rabinovitz, Tea Lane Associates: While many owners reduced rental rates in 2009, some have reinstated 2008 rates for the approaching summer season and the rates are holding up at this point. Rental inquiries are strong. Renting out for part of the season remains a solid strategy for homeowners to deflect some of the costs associated with ownership here.
Art Smadbeck, Priestley Smadbeck & Mone: Rental rates are holding up somewhat. Seasonal renting can still offset significant expense but, as before, it probably won't cover the expenses that would include a full mortgage (75% loan-to-value ratio). It's still a good strategy.
Julianna Flanders, Flanders Up-island Real Estate: Rental rates are still holding their value. In the down-Island area with lower-priced homes, buying and renting might be a great way to afford a house but I don't see it as a strategy up-Island.
Neal Stiller, Cronig's Real Estate: It makes great sense for vacation homeowners to rent out their homes for a portion of the summer season, as a majority do. These rentals can pay for taxes, insurance, and contribute towards the mortgage. The rental market is still strong but owners must price their homes competitively or they won't get rented.
Sheila Morse, Island Real Estate: Buying to rent is still a good idea. Rentals are still strong and rental income can help offset the costs of owning a second home, but cannot cover all expenses. Homes that are well maintained and clean rent well but there are a lot of rental properties. Some tenants want to negotiate. A savvy owner understands that taking a lower price is better than having an empty week.
Lisa Stewart, Lighthouse Properties. The economic downturn has affected the rental market as well. There is a lot more inventory and the season has really shrunk to about eight weeks. Tenants are much more choosy about price, location and especially quality of the homes they rent. People are booking much later and for shorter stays. That being said, good quality homes with desirable amenities are booking easily when priced competitively.