- The Washington Times - Wednesday, August 2, 2006

I might not be frothing at the mouth while sitting in my vacation rental, but I’m getting close. My bride and I just spent breakfast making a list of why we’ll never again rent this unit at one of my favorite beach communities.

I’ve rented several properties here in the past. That’s why I’m back this year. But this time, the experience has been pretty irritating. It’s not a disaster, mind you. We’re still enjoying the beachfront pool club with tennis courts, Olympic swimming and private beach privileges that come with the rental of $2,000 per week, after taxes, fees and insurance. We also enjoy the views of a lake with plenty of turtles, as well as cranes and other waterfowl.

Yet, when I plop down that much money on a beach rental, I have a certain expectations. There should be remotes for the five televisions, two VCRs and four DVD players that actually work.

I’m just getting started.

There are two management components to investment property that every investor must keep in mind: the investor track and the management company track.

Under the investor track, the individual investor has certain responsibilities, such as providing the furnishings and keeping the property in generally good order. This includes the paint, carpet and decking.

The property management track keeps the property in daily working order for all the visitors who pay to stay in the home.

First, let’s deal with the investor track. A vacation rental can be a cash cow if you set it up right. Purchase with enough cash down so that the rents coming in not only pay your monthly costs — mortgage, insurance and property management fees — but leave enough cash at the end of the month to save up for maintenance and upgrades of the unit through the years.

When investing in vacation rentals, keep in mind it’s as if you’re setting up your own little hotel. The rental not only includes the dwelling, but also all the stuff — furniture, linens, kitchen utensils, and items needed on a daily basis. It also includes the niceties — DVD players, hot tubs, bicycles and gas grills.

In residential investing, you only have to make one renter happy all year. In vacation rentals, depending on the length of the season, you could have dozens you have to satisfy in hopes that they will want to come back again and again.

Don’t be cheap. Cookware from the dollar store will not last long. After the first few uses, the inexpensive pots and pans will look like what they are — cheap.

Purchasing low-end electronics is really a disaster. While you may not want the top-of-the-line in home entertainment, the cheapest components break down very quickly.

Remember, you are renting to people who are on vacation. They will most likely be watching several movies per week. The $49 component will break down like the unit in my daughter’s room, which has eaten up one of her DVDs.

This brings me to the property management track. Once we walked into the house, we discovered in two days various problems with the property and service of the management team:

• Mildew spewed out of the Jacuzzi on its first use.

• Light bulbs were missing throughout the house.

• The hot tub comes on by itself and won’t shut off without unplugging it.

• The garbage disposal was jammed and had to be cleaned of seashells and pebbles to get it to work.

• Out of the eight remotes in the house, only two work. I’ve had to purchase batteries for them and then find out some of them still don’t work.

• The garage is full of debris.

• The outside shower had to be cleaned of pine needles, leaves and twigs before anyone could use it.

• The gas grill is a mess. Maybe now I’m getting picky. What gas grill isn’t a mess? But the igniter doesn’t work, and I’ve purchased a lighter to ignite it.

The owner next door moaned that there used to be two separate companies employed for cleaning and inspecting the properties. Now there’s one that cleans and then sends its own crew in afterward to inspect. This may explain why the cleaning crew put rugs in the washer and left us a note to please move the rug to the dryer.

If you’re going to get in the real estate investment game, you must show that you care about the property. Besides, if you don’t care how it looks when you’re renting it out, then why should the vacationers care to come back?

M. Anthony Carr has been writing about real estate since 1989. He is the author of “Real Estate Investing Made Simple.” Post questions and comments on his Web log (https://commonsenserealestate.blogspot.com/).

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