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Second Homeownership and Interest in Vacation Rentals Continue to Remain Strong through Economic Recession
Posted By susanne On June 3, 2010 @ 3:22 PM In Home Owner News,Real Estate,Real Estate News,Today's Marketplace,Today's Top Story - Consumer | Comments Disabled
RISMEDIA, June 4, 2010—Second homeowners who rent their homes to travelers, on average, generate more than $35,000 in rental income each year, according to HomeAway, one of the world’s leading online vacation rental marketplaces which recently released its quarterly “HomeAway Vacation Rental Marketplace Report.”
On average, second homeowners are renting their properties to travelers 20 weeks a year, and the rental income generated is helping many owners offset mortgage and upkeep costs. In fact, the HomeAway report found 38% of owners generate enough rental income to cover 75-100% of their mortgage. Nearly two-thirds (63%) of owners earn enough to cover at least 50% of their mortgage.
“Owning a vacation property is not just for older Americans or the affluent. Many owners are discovering they can offset the costs of the home by renting to travelers when they’re not using it themselves, and they’re having good success lining up renters by marketing their homes online,” says Tom Kelly, Real Estate expert and author of How a Second Home Can Be Your Best Investment. “The rental income they earn can go toward paying the mortgage, home insurance, utilities and general maintenance.”
According to the HomeAway report, several markets around the country have seen significant increases in new vacation rental listings. For the fourth consecutive quarter, both New Orleans and Austin, Texas appear in the top 10 destinations with the largest increase in new listings. Sunset Beach, N.C. retains its top position from the last quarter and Telluride, Colo. dropped a spot from second to third.
More second home owners turn to renting their homes
Top Markets with Largest Increase in New Vacation Rental Listings:
-Sunset Beach, N.C.
-Jackson Hole, Wyo.
-West Hollywood, Calif.
And despite the sluggish economy, second homeowners in these markets and throughout the country find that travelers are continuing to book stays, due in large part to the value afforded by a vacation home compared with a traditional hotel. Approximately 62% of second homeowners report their bookings for this summer are about the same or higher than last summer.
Now’s the time to buy vacation real estate
Given the success second homeowners have renting their homes to travelers, some are considering buying additional properties. Of the owners who cover 50% or more of their second home’s mortgage with rental income, 38% of them say they had considered buying an additional vacation home within the past year.
“There’s never been a better time in the past seven years to ‘buy low’ with the prospect of eventually ‘selling high,” says Kelly. “Prices are down in just about every location, and mortgage interest rates are hovering at some of the lowest levels in history.”
Coastal areas, mountain and city destinations lure travelers looking for vacation rentals
Whether looking to buy a vacation home or just rent one for a personal vacation, finding the right destination is important. Miami and New York, again, rank in the top five most popular destinations to rent a vacation home this summer, based on traveler inquiries made on HomeAway.com between February and April 2010.
The top five most popular summer travel destinations include:
New York, N.Y.
Cape Cod, Mass.
Myrtle Beach, S.C.
However, when it comes to the fastest growing destinations among travelers, Beverly Hills and West Hollywood reappear as emerging hot spots, growing 119% and 130% respectively–compared to the same time last year in which they had already grown by 239% and 196%.
Emerging travel hotspots
Top 10 destinations with the largest percent increase in traveler interest from Q1 2009 to Q1 2010
Telluride, Colo. (270%)
Marina del Rey, Calif. (267%)
New Orleans (220%)
West Hollywood, Calif. (130%)
Boca Raton, Fla. (129%)
Cambridge, Md. (128%)
South Yarmouth, Mass. (121%)
Beverly Hills, Calif. (119%)
Windham, N.Y. (108%)
Flagstaff, Ariz. (107%)
Home-like experience of a vacation rental also big draw for travelers
If choosing between a vacation rental and a similarly priced hotel, 77% of travelers say they would choose a vacation rental over a hotel because of the home-like experience.
Deals and discounts on top of value provided by vacation rentals
While fewer vacation homeowners are offering deals or discounts this summer (55%) compared with last summer (66%), there are still plenty of deals to be had.
Of those owners who are offering deals this summer:
-43% plan to offer a specific percentage off the rental rate
-44% plan to offer a specific dollar amount off the rental rate
-31% plan to offer a free night with the purchase of a specific number of nights
-24% plan to offer free cleaning services
-11% plan to offer complimentary products or services, such as free tickets to a theme park
-10% do not plan to require a minimum-night stay
For more information, visit www.HomeAway.com .
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