RISMEDIA, February 18, 2009-(MCT)-Tight household budgets and tenuous job security make it hard to think about getting away this summer. Owners of second homes are strapped too. And that’s creating opportunities for Chicagoans who are willing to drive a few hours and vacation in someone else’s home.
While not all owners are slashing rates to lure vacationers, they are being flexible and adding amenities as they try to generate income and lessen the burden of two mortgages during turbulent times.
Websites and rental companies that specialize in privately owned homes in Wisconsin and Michigan say they’re also seeing more owners opening their second homes to renters, and some are magazine-worthy, regal retreats.
“We’ve added a lot of nicer properties that generally people wouldn’t rent out,” said Chad Kodanko of Door County Property Management in Wisconsin. “People can earn more money renting out a second home than in the stock market.”
Kodanko’s new properties include one home that, in addition to the well-appointed main house and a small tennis court, includes a boathouse with a fireplace, wet bar and sound system. It’s offered at $3,600 a week, takes pets and even has outdoor kennel runs.
Whether the extra sizzle sells seems a matter of chance in a competitive market and during a recession. Some homeowners are trying to improve their chances, posting below-market rental rates.
Take Chicagoan Rick Ezgur, who last fall bought a 4,000-square-foot, four-bedroom, three-bath house with an in-ground pool in Fennville, Mich., about 10 minutes from Saugatuck. Comfortably, the house can sleep eight.
But because he was nervous about whether he’d be able to rent it this summer, Ezgur listed it on two vacation rental websites Jan. 1 as accommodating 16 people and for $3,000 a week. In better times he thinks he could rent it for $3,500 to $4,000 a week.
He already has it booked for every week between Memorial Day and Labor Day except one, and very few of the reservations are for just eight people.
“Instead of being on the lake, I’m a 10-minute drive,” Ezgur said. “Maybe in a better economy, people would spend twice as much to be right on the lake. My goal was just to break even. Now it’ll be a small positive cash flow.”
Cutting prices doesn’t always work, however. Maureen Maloney of Homer Glen isn’t having much luck renting out a five-bedroom, three-bathroom home on Delavan Lake near Lake Geneva, Wis. Last year she rented the house for $700 a night; for the coming season she first dropped the price to $650 a night. Now she’s at $595 a night-and she may give up her past practice of renting the home for a month at a time.
“We want to keep the house. We don’t want to sell it,” she said.
Consumers also can find more accommodating offerings. Hinsdale residents Beth and Mario Bernardi, who bought adjoining rental cottages in Egg Harbor in Door County on Dec. 30, have been pleasantly surprised by the response they’ve gotten to their ads; they allow pets.
Inquiries about vacation homes and the number of homes for rent in the Midwest have been on the upswing, according to HomeAway.com, a website where individual owners can list rental properties.
Last month, inquiries about homes in Michigan were up 23% from January 2007. Meanwhile, the supply of rental properties rose 11% over the comparable period. In southwest Michigan, whose communities include Union Pier and South Haven, inquiries were up 31% and there were 23% more properties listed.
In Wisconsin, popular destinations like Wisconsin Dells, Lake Geneva, Door County and Minocqua saw a 19% increase in inquiries and a 24% increase in the number of properties available.
The phenomenon appears to be taking shape in Chicago as well.
Inquiries about vacation rentals in Chicago were up 161% last month compared with January 2007, while the number of properties added to HomeAway’s inventory has increased 64%. Similar spikes are being recorded in other major markets like New York City and San Francisco.
“It’s a fantastic time for this industry,” said Mike Butler, chief commercial officer of HomeAway Inc. “It’s value on both sides of the ledger. More than ever, owners that bought homes are discovering that they don’t have to sit on them and carry those costs and suffer that financial burden. We’re seeing all sorts of solid offers and special deals.”
That includes doing things to make the properties a better value, such as marketing a well-outfitted kitchen so meals can be eaten at the house instead of at restaurants, and boosting the number of DVD movies available. Some homeowners are even noting that the house comes with a frequent shopper discount card for a local grocery store, to cut down the weekly food bill.
Dan Saunders, owner of New Buffalo Vacation Rentals in Michigan, said he’s hearing more from homeowners seeking to rent their properties because they aren’t using them, they need the income or they’d like to sell but are unable to because of the depressed real estate market. He schools them on how to make their houses appealing.
“What people really want is the amenities of home-Internet access, cable TV access,” he said. “I have had a couple homeowners that now will allow dogs, or now are taking 12 people instead of eight or 10.”
Generally, the larger, well-appointed properties still command top dollar, in large part because there are fewer of them and they are being rented out by a large group of relatives or friends who share the costs.
Meanwhile, rental agents say vacationers have more wiggle room to negotiate pricing on smaller, two-bedroom homes because in a down economy, there are more homes for rent than there are renters.
Traverse City, Mich., resident Jack Nowland is surprised by how many phone calls he’s received about his property, which can accommodate 10 people and includes a catamaran ride for families who book early. He thinks he’ll be able to rent the home for all 17 weeks he offers it.
“I thought, ‘Should I raise my rates this year?’ and I thought, ‘Don’t mess with a good thing,’ ” Nowland said.
Copyright © 2009, Chicago Tribune
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