Money is, as always in life and business, a sword with two blades; the one who pays wants to see the smallest number possible at the end and the one who earns wants to see a real big number. Vacation rentals are business and needless to say: the same principle applies. It is not easy to satisfy all parties and requires a lot of negotiation and maneuvering. All the recent changes in the real estate market created a buyers’ market with a wide selection of houses for sale and many owners, unable to sell for what appears to be reasonable price, have decided to rent their homes out to vacationers to make some money.
Owners who rent their homes out to vacation guests usually expect, rightfully so, to make up for maintenance costs. A home, that’s rented out successfully, about three-quarters of the year, will most likely generate the monies to pay for the monthly maintenance, taxes, and services e.g. lawn- and pool care. Can one make money by buying a home and renting it out to vacation guests in Florida? Probably not when you think of getting rich, but if you plan to enjoy your home during your vacation and generating money to sustain the house when you are not there you have a deal.
One of the main services Sanford Realty, Inc. offers other than assisting clients with buying of selling houses is Vacation Rental services. The vacation homes in our program are rented out to vacation guest from around the world who expect first class accommodations. Rental fees are another hot-topic and the same rule applies: realistic does the trick! With a wide variety of vacation homes on the market, price and quality of the home you want to rent out must be more attractive than its competitors.
Our recommendation is to look at the competition and beat them! Most renters, if given the choice of similar homes, will book the home with the more realistic price. It does not make much sense to put a vacation home on the market overpriced if another similar one could be rented for a lesser price. This is called the “sparrow in your hand is better than the pigeon on the roof” principle; a high price on the paper doesn’t help you but a lesser value in your pocket can. A lesser amount of money in your hand will pay bills better than no money at all.
Our rental fees are per week but monthly rates benefit renters who rent for a longer period as many snowbirds do during the winter months. All monies, rents and deposits, are held in escrow as law requires and taxes are paid accordingly.
Rent can be paid in cash but also in American Express Traveler checks or per cashier’s check; the important part is, that all rent monies must, per law, be put in escrow if the home owner is not the one who collects the monies. As soon as there is a third party involved in the handling of rent monies escrow is required and there is no way around that.
All monies are than split up accordingly by the Rental Agency or Brokerage and distributed out of the escrow account: the owner gets his share, the agency gets their percentage or commission as negotiated, and taxes are paid. Monies generated from rent can, according to law, not be commingled with private monies; a person who does not hold a Real Estate Brokers license is not legally permitted to collect rent monies.
By the way, Vacation homes can be run as a business here in Florida.