Vacation Income

In January, many folks look to make some extra income and focus on a goal other than losing weight or reducing their carbon footprint.Right after the turn of the New Year, some homeowners start preparing their homes to rent out as vacation rentals for the spring and summer.“Nowadays because of the economy, everybody is looking for a way to capture a new revenue stream,” says Paul Aubin, president and owner of Newport Beach (Calif.) Vacation Properties. “They already have an asset.”To attract vacationers who prefer homes to hotel rooms, homeowners can work with a vacation rental agency or market properties themselves through websites such as VRBO.com or ITrip.net.Barbara O’Hara Hamilton, a Southern California real estate broker, regularly rents out two properties of her own as vacation homes. She said screening prospective renters has left her with no complaints.“I’ve never had any problems,” Hamilton says. “Nothing broken, nothing stolen. People are usually very respectful.”Hamilton started using her first property — an upper unit in a duplex in Corona del Mar, in the Newport Beach area — as a vacation rental after she experienced trouble with a full-time tenant who rented annually, she said. Now she markets the unit as a weekly vacation property. Hamilton said she’s making more income, upwards of $6,800 on a fully booked month, much more than the $1,600 per month she netted when the property rented annually to one person. The business has proved so lucrative for Hamilton that she is now renting out a house in Dana Point, Calif., as a second investment property.“It has just been a win-win,” she said.About 40 percent of vacationers who rent Hamilton’s property are visitors from other countries. Since the rental agency handles the property, it is turned over and cleaned in between renters while Hamilton collects her income.Homeowners can potentially make more extra income in a shorter period of time if they rent their home out during peak seasons.Aubin says the return is “between 20 percent and 30 percent more annually with a vacation rental than if you were to rent it out to one person the entire year.” Homeowners often can net more income from weekly vacation rentals than monthly ones, he said.“The myths out there are if you go with weekly rentals, your house will be destroyed,” he says. “That’s not the case.”Aubin’s company screens incoming rental inquiries, checking out potential renters to give homeowners peace of mind that their home won’t be mishandled.He says his company typically gets a rush of people looking to rent out their properties in early January. With the spring break market starting in late March and lasting through the end of April, homeowners need to start now to get homes listed and ready to rent to vacation renters.“If you’re a homeowner and you’re trying to prepare your home and market it for those time periods, you really need to get it up on the websites in January,” Aubin says.—Establish a possible financial forecast. How many weeks out of the year will it be rented out and at what rate?—Apply for a business license with the city.—De-personalize the home and remove clutter.—Remove personal items and confidential files and papers.—Ensure the home has Wi-Fi internet access.—Stock the kitchen with the appropriate tools and cookware; stock bedrooms with an extra set of linens.—Remove medications and personal toiletries from the bathroom; provide beach towels.—Prepare an instruction sheet for home electronics.—Inform neighbors that the property will be rented out for a period of time.Cleanliness and amenities — modern bathrooms, king-sized beds, wireless Internet access and hardwood floors — increase rental rates, Aubin says.“The expectation isn’t too different than when people are buying a house,” he says.