Tom Kelley: Adding a hot tub can help boost your four-season rental potential
You’ve found the perfect vacation property seller, a tired owner willing to part with his place at a bargain price in a rainstorm. Sellers often are most likely to listen during the off season when thoughts of more maintenance and repair are front and center.
You realize you cannot use the place all the time, and it has four-seasons to lure renters. If you were going to rent it out – perhaps to offset maintenance and mortgage costs – what would be the best thing you could do for the place?
“Add a hot tub,” said Christine Karpinski, the author of “How to Rent Vacation Properties by Owner” and “Profit From Your Vacation Home Dream.”
“It’s a four-season amenity and something people really like to have available even though they might not use it,” she said. “It would probably pay for itself three times over in less than a year.”
Vacation and investment home sales continue to rise, thanks to popular websites like airbnb.com and vrbo.com. Consumers are not only looking to get a foot in the door to a reliable investment, but they are also seeking ways to get a leg up on resort home competitors with amenities like a hot tub.
“What people want and will remember is that the home is pristinely clean,” Karpinski said. “Renters remember crisp linens and sparkling floors and are after a spot where all they need to bring is clothes and food.”
The hot tub addition has been a favorite since Karpinski bought a condominium a few years ago. She rented out the condo, which has a hot tub, and was asked to help find a renter for an identical condo owned by a neighbor. The neighbor’s unit had the same floor plan, exposure and appointments – except it did not have the hot tub.
“The figures showed the unit with the hot tub earned $14,000 more a year in rent than the condo without the hot tub,” Karpinski said. “When I showed the figures to the neighbor, he had a hot tub installed for about $9,000, and he then made close to $14,000 in additional rental income because of it.”
Karpinski said hot-tub maintenance horror stories are overestimated and that high quality tubs with basic features (“heat on, heat off – jets on, jets off”) work best. A maintenance contract from a reliable supplier ensures proper attention for both renters and owners.
Karpinski started the rent-by-owner game nearly two decades ago when she was surprised by the number of renters who wanted to return to her beach condo. She bought another, then another and now owns several.
“Owning a second home is a wonderful idea,” she said. “And many owners approach it from the tried and true aspect of first having a home for their families and profiting second. That’s a sane and reasonable philosophy. No one expects values to double and triple again in three to five years, but who knows.”
According to a new second-home study released by the National Association of Realtors, more than half of vacation-home owners who purchased for personal use (although one-third of those also wanted to diversify investments) stated they planned on renting at least part of the time.
An unexpectedly high number of vacation-home owners, 31 percent, own two or more vacation homes, according to NAR. In addition, 34 percent of vacation-home owners report they own two or more investment properties.
The survey also revealed that two-thirds of vacation-home buyers wanted to be close to an ocean, river or lake; 39 percent wanted to be close to recreational or sporting activities; 38 percent wanted to be close to vacation or resort areas; and 31 percent wanted to be close to mountains or other natural attractions.
Results indicated that the median size of a vacation home is 1,480 square feet and that 29 percent were new when purchased. Sixty-five percent of owners said their vacation property was a better investment than stocks.
Extra cash? Maybe it’s the season to consider investing in a second home with a hot tub … in an area with four-season potential.