How to Keep Your Vacation Home Rented, Even in Off-Peak Seasons

Some property owners report so little rental interest in the off season, they don't even try to rent out their houses. Others, however, find ways to keep the renters coming year-round - even when their task is made harder, as it is now, by a weakening housing market.
By: Daisy Maxey: The Wall Street Journal Online
There's a reason why it's called the off-season. Some vacation-home owners report so little rental interest during off-peak months, they don't even try to rent out their properties.

Others, however, find ways to keep the renters coming during high, low and in-between seasons - even when their task is made harder, as it is now, by a weakening housing market.

Maureen Regan, who runs Seaside Vacation Rentals, which helps owners rent their vacation homes on southern Maine's coast, among other places, says there's more competition in the market as sales and prices of vacation homes have softened, causing owners to postpone sale plans and rent out their properties in the meantime. Rising monthly payments due to adjustable-rate mortgages also are leading owners to try to rent out their second homes more.

Ms. Regan says she only expects the market to get worse in the short term. So, her York, Maine, business is advising homeowners with rentals to "price aggressively" and to maintain and offer their properties as much as possible.

What follows are some steps vacation-home owners have taken to make the rental season last well beyond the peaks, increasing their income and lightening their mortgage loads.

Drop Your Price, But Not Too Far

Let's start with the most obvious: lower rates.

Typically, owners should knock 30% off their peak rates for so-called shoulder-season rentals -- those that fall between their high and low seasons -- and as much as 50% off peak rates for low-season rentals, says Christine Hrib Karpinski, director of the owner community for HomeAway.com, based in Austin, Texas, an online marketplace of vacation rental properties.

Just before Christmas, inquiries slowed to a trickle for Amy Greener's "Swaying Pines Chalet," an 1,180-square-foot cabin she owns in the Great Smoky Mountains in Gatlinburg, Tenn. Ms. Greener, who advertises on six Web sites for the two cabins she owns, responded by cutting her price and posting the deal as a "Holiday Shopping Special." That move yielded several renters.

"You just have to be creative in the off-season," Ms. Greener says.

In Cape Cod, owners generally slash their off-season prices to the point where a month costs about the same as a week does during summer, says Jeff Talmadge, who with his wife, Joan, created WeNeedaVacation.com, a Web listing of vacation rentals in Cape Cod, Martha's Vineyard, Nantucket and Florida. In the shoulder seasons -- which in Cape Cod would include the first two or three weeks of September, for example - he advises prices should be half what they were at the peak in August.

"That's a big drop in a very short period of time," he says, "but it crosses that Maginot line with Labor Day and the schools firing up. It's painful, but something's better than nothing."

Up to a point, other experts say. It may seem counterintuitive, but Ms. Karpinski, for one, advises owners not to lower their rates too far. That could lead potential renters to think that a home is somehow inferior to others, she says.

Owners sometimes slash their prices early just to get a property booked, when they could have waited and commanded higher rates, says Brian Sharples, chief executive of HomeAway.com.

"There are as many people who are underpricing as are overpricing," Mr. Sharples says. "It's always been fascinating to me how the best properties are always booked a year in advance. In the summertime or at Christmas, if those people held out a bit longer and increased their prices a bit, would they increase their revenue? I'm sure they would. We always get calls from people who want to know if they can find more properties."

Package It

Package deals represent a way to attract interest without appearing too inexpensive, says Ms. Karpinski. When prospective guests inquire about summer bookings, offer to throw in a winter special, too - like half-price for a weekend stay, she suggests.

If business is slow, owners might also consider calling or emailing repeat guests with discounted "VIP" off-season stays, she says. These could be customized as celebratory weekend specials if an owner knows the regulars have a birthday or anniversary coming up.

Go Long

Pinpointing and marketing to specific groups of renters who stay in the area during the off-season can help keep properties booked.

For example, while owners of bayfront and oceanfront real estate in San Diego can find renters year-round with no problem, properties a block or so off the waterfront are a bit more of a challenge, says Greg Flaherty, chief executive of Penny Realty in San Diego. Owners of such properties have found a solution, however: They offer school-year rentals to college students from September to May, at which point they revert to regular weekly vacation rentals. Renting to college students isn't for everyone, but those who do are much more likely to remain occupied, Mr. Flaherty says.

Similarly, owners who can rent by the week during July and August in Cape Cod may have to consider six- to eight-month rentals in the off-season, says Ms. Talmadge. Scientists or students spending time at nearby Woods Hole Oceanographic Institution in Woods Hole, Mass., or relocating families seeking temporary housing often present good opportunities, she says.

But it's important to be very careful with longer-term rentals in general, which offer a much greater risk of damage or other problems, the Talmadges warn.

"It's very different from having an individual or family in your home for one week," Ms. Talmadge says. "We advise [owners] to do the necessary background checks to be sure that someone in their home for any number of months is going to be a good tenant and take care of the home."

Welcome, Little Creatures

Owners should also consider dropping restrictions against children and pets during the off-season, and making their homes baby- and toddler-friendly, says Ms. Karpinski.

"People with very young children are more likely to travel off-season, because they're not constrained by school schedules," she says. A high chair or a portable crib aren't expensive additions, but can drastically increase off-season bookings, she says.

Vacation properties that accept pets can increase their occupancy by 10% to 50%, Ms. Karpinski says. A woman she spoke with, for example, had a nice cabin in the mountains in Colorado, but rentals were slow. Though the cabin was within driving distance of three ski resorts, it was not close enough to advertise that fact, Ms. Karpinski says. Once the woman began accepting pets, though, the bookings flowed in.

An added bonus: Charge an additional $20 to $25 a night for pets, as most owners would have to spend that much or more on pet-boarding fees.

Be Amenable To Amenities

Improving your house with creative amenities that help visitors wile away the time in the quiet off-season can make the difference between a cranky, bored guest and a satisfied one, experts say.

Off-season in Maine, fireplaces are a big draw, and visitors will choose a house that has a washer and dryer over a comparable house that doesn't, says Seaside Vacation's Ms. Regan.

In hot, sunny markets, those who can add a pool to their property should, says Mr. Sharples in Austin.

Nor should owners underestimate the importance of Internet access, he adds. "For many people, if the home doesn't have it, they're not going to rent it," he says. "It's not just a swing factor."

At the lower end of the price range for adding amenities, it doesn't have to cost much to "winterize" your home, Ms. Karpinski says. She suggests adding thick, warm comforters, fleece throws on the sofa, spice-scented candles on tables or countertops and winter treats like cocoa mix and marshmallows, spiced apple cider or ginger cookies in the kitchen. Put up a Christmas tree in November, set out a collection of seasonal DVDs, such as "Rudolph the Red-Nosed Reindeer" or "It's a Wonderful Life," and place a toboggan in the closet, she suggests.

Extra Pairs Of Eyes - And Hands

Whether to manage a vacation property yourself or hire a management company is one of the biggest decisions an owner faces. Vacation-home owners live an average of 220 miles from their property, and 34% live more than 500 miles away, according to a survey by the National Association of Realtors. That can make maintaining a home and responding to emergencies difficult, if not impossible, especially in the off-season when travel can be dangerous in some areas.

And no matter whether they're managing the property themselves or paying a management company, for some owners, renting in the off-season may be more trouble than it's worth, Ms. Karpinski warns.

"In upstate New York, in the Adirondacks, some of those roads are barely passable, and there are worries of pipes freezing," she says. "But you have the positive side, too, because you do have eyes and ears on your property during those seasons. If a pipe freezes and breaks, do you want to hear about it right away or discover it months later?"


- Ms. Maxey is a special writer for Dow Jones Newswires in Jersey City, N.J.