<Number of Owners Who Cover Bulk of Their Mortgage with Rental Income Increasing
- 48 percent of owners who financed their vacation home report they’re able to cover more than 75 percent of their mortgage by renting it to travelers, up from 38 percent of owners just one year ago
- Nearly a quarter of owners (22 percent) say the increase in foreclosed homes has prompted them to bargain hunt for vacation real estate
- 72 percent of owners say bookings for this summer are the same or better than last summer; 23 percent have increased vacation rental rates this year
AUSTIN, TX – May 26, 2011 – (RealEstateRama) — Vacation homes aren’t just for rest and relaxation; they are also a satisfying, moneymaking venture for many owners. HomeAway, Inc. – the world’s leading online vacation rental marketplace – finds in its latest “HomeAway Vacation Rental Marketplace Report” that 81 percent of vacation home owners who rent their homes to travelers are satisfied with the overall experience.
The satisfaction may be attributed to the extra income vacation rental owners generate, which contributes to mortgage payments and other expenses. In fact, 48 percent of owners who financed their vacation home report they’re able to cover more than 75 percent of their mortgage by renting it to travelers, up from 38 percent of owners one year ago. Nearly two-thirds (65 percent) of owners earn enough to cover at least 50 percent of their mortgage. Interestingly, 31 percent of vacation rental owners don’t have a mortgage.
Extra Income, Interaction with Travelers Drives Satisfaction
With the ability to pay off their mortgage, it’s no surprise that 63 percent of owners say generating extra income is what they enjoy most about renting their second home to travelers. On the other hand, 14 percent say sharing their vacation destination with guests is the second best aspect of renting out their home.
“Making some extra money is certainly a perk, but many vacation rental owners also find sharing their home and destination with others to be extremely rewarding – they truly care about the experience their guests have in their homes,” says Brian Sharples, chief executive officer of HomeAway®.
Rental Incomes Goes Toward Property Improvements, Mortgage Payments
One example of the care vacation rental owners put into the overall guest experience is they’re putting the rental income they generate back into their properties, whether it’s investing in home improvements or upgrades.
Lower Prices Drive Vacation Real Estate Purchases
With lower real estate prices in many parts of the country – some existing vacation rental owners are exploring the idea of buying a second vacation home.
About 15 percent of existing vacation home owners say they bought a vacation home because of the decline in real estate prices and another 12 percent said they are interested in buying due to the lower prices – a finding that is largely consistent with the National Association of Realtor’s findings in its 2011 Investment and Vacation Home Buyers Survey that found 38 percent of first-time vacation home buyers decided to purchase a vacation property last year primarily because of low real estate prices.
Nearly a quarter of vacation home owners (22 percent) say the increase in foreclosed homes has prompted them to bargain hunt for vacation real estate, and five percent have even purchased a foreclosed home within the past two years.
Strong Summer Ahead for Vacation Rental Owners
According to the report, 72 percent of vacation rental owners say bookings for the summer are about the same or higher than last summer. In addition, 59 percent say their rental rates are about the same for this summer compared with last summer, whereas 23 percent say they’ve increased their rental rates.
While some owners have concerns that rising gas prices and increased airline tickets will impact summer travel, only 48 percent of owners feel they need to offer special deals or incentives to attract renters this summer, compared with 55 percent of owners who offered deals last year and 66 percent two years ago.
There’s good news, in particular, for those who own vacation homes or are looking to buy in markets where traveler demand for vacation rentals is on the rise. New Orleans has been in the top 10 destinations with the largest year-over-year percent increase in inquiries from travelers looking to rent vacation homes for the past four quarters, while Chicago has made the list for the past three quarters. Amelia Island, Fla., and Wimberly, Texas, have made the list the last two quarters.