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Virtually all owners of vacation properties on Sanibel Island began as renters. Their good experiences as visitors helped them to decide to purchase their vacation property. Their experiences as renters have helped to shape their attitude towards renting their vacation property. At the same time, being an owner has probably improved their perspective on renting vacation homes/condos from other owners. The following information is from an owner’s perspective and may be helpful to potential renters (and owners), on Sanibel Island and elsewhere.
Owners and their Vacation Properties:
Those owners who are fortunate/blessed to have a vacation property, usually own “only” one. Into their condominium or home many owners invest much of their money, time and emotions. They enjoy their vacation property even more because of this investment of themselves. Their vacation property reflects their interests and tastes, as people who share a love of Sanibel Island. Most owners do not have the financial means to use their condo or home for a few weeks or months and have it remain vacant for the rest of the year. Most owners want and/or need rental income to help pay the significant costs of property ownership on Sanibel Island. In addition, they enjoy sharing their property with other guests/families who are long time visitors or are coming to Sanibel Island for the first time.
Most property owners want their guests to enjoy staying at their vacation property as much as they do. Their property reflects what they like/want in a beach condo/home. Sharing their property with guests, most of whom they do not know, is a little scary and involves sharing a part of themselves. They want their guests to appreciate having the opportunity to stay in “their home”, and they certainly want them to take care of it as if it were their own.
Many people have the mistaken impression that being the owner of vacation property is a good means to make a lot of money. As most vacation property owners quickly discover, that usually is not correct. In addition to the initial purchase cost, which is a significant investment and/or monthly mortgage payment, there are the substantial property taxes, three insurance premiums (homeowners, flood and wind), property maintenance fees and assessments. It seems that every time the owner turns around, there is another bill related to the vacation property. If the owner just wants to spend four-six weeks on Sanibel each year, it truly would be less expensive and far less hassle just to rent.
Then there are the costs associated with each rental reservation. These costs usually are 30-50% of the total price that the renter/guest sees on their invoice. These costs include payment to the resort, rental management company or property association (10-20%), the Florida/Lee county sales taxes (11%), linen fee, housekeeping fee, reservation fee, security deposit waver fee, utilities and service calls. Trip insurance, which is optional for the renter, is an additional charge paid by the renter. Two real life examples may help to explain this situation even better. For an owner to receive net rental income of $1000 for a week’s rental of their property, the renter/guest will usually pay a total amount close to $1700, and this amount does not include the cost of the optional trip insurance. For a guest to pay a total amount of $1000 for a week, the owner usually receives a net amount of just under $500. Out of that amount, the owner then pays for the utilities and any service calls. Paying the electric bills for air-conditioning in the hot summer or heating in a cold winter will substantially reduce any net revenue. Just one or two after hours service calls will go thru the remaining amount very quickly.
Heating/air-conditioning repair technicians, electricians and plumbers make it worth their while to make after hours service calls to vacation properties and deserve to do so. However, the net result is that some renters end up actually costing the owners money to let them stay at their vacation property. One way for guests to show their appreciation for the opportunity to stay in the vacation property is to be sure to close doors when the air-conditioning/heating is on. This will reduce the utility costs for the property owners. As for service calls, unless the problem is truly an emergency, waiting until the next business day to request a maintenance/repair service call would also be helpful. No owner wants their guests to die of heat stroke or frostbite or have their vacation “ruined”, but some prioritization in requesting “after hours” service may save the owner a few hundred dollars in service call expenses. Ultimately, the owner has to pass along these expenses to the renters.
The purpose of reviewing these costs is not to complain about how “tough” it is to be a vacation property owner, but rather to give an owner’s perspective so that potential guests understand that the owner’s fixed and variable costs of renting their condo/home make it difficult to offer large discounts. Below some level of net revenue, most owners would prefer to keep their property vacant. In addition, the anecdotal experience of many vacation property owners is that those guests searching for the absolute cheapest rental rates are often the ones who show the least concern for the owner’s property. One careless renter can cause substantial damage to the vacation property.
Rental Management Companies:
Relatively few vacation property owners actually live on Sanibel Island. As such, most owners use a service to assist with the rental management of their vacation properties. Except for the resorts, timeshares and some condo associations, many/most of the rental properties on Sanibel Island are managed by Rental Management Companies (RMCs), which can be most helpful, for both the owners and the guests. On Sanibel Island there are a number of excellent RMCs, including Royal Shell Vacations, VIP, Sanibel Accommodations, Select Vacation Properties, etc.
The RMC makes the individual property reservations, obtains a signed rental agreement and deals with the financial aspects of collecting deposits, final payments, sales taxes, optional trip insurance, etc. The RMC communicates with the renters/guests and provides whatever information is needed. At the start of the rental period, the RMC checks in the guests and provides the keys for the property. During the rental period the RMC is available 24/7 to respond to any problems or concerns of the guests. At the end of the rental time, the RMC checks out the guests and arranges for clean linens and housekeeping services so that the property will look just as nice for the next guests. For any possible complaints about the vacation property, the RMC provides a means for the guests to express their concerns without requiring direct communication with the owner. The RMC can also mail to the guests any items accidently left at the vacation property.
As such, the Rental Management Company assists the non-resident owners in providing their renter/guests with the services they need before, during and after their vacation. The RMC also advertises and obtains the reservations for many of the property owners. For renters/guests they offer “relatively unbiased” information and comparisons of the different rental properties and help the guests to obtain the vacation property that is best suited for their budget and specific needs. The one possible exception to this last statement relates to the special needs guest. If the RMC does not have an accommodation specifically suited for a special needs guest, there may be a financial incentive not to inform the guest about a property that has the needed features, but is managed by another RMC.
Since the owner pays the RMC’s commission for finding the renter/guest, using the RMC does not directly increase the rental cost, at least not from the perspective of the renter/guest. Although this perspective is technically correct, many owners have more flexibility on pricing with guests coming through their on-line sites than thru the RMC. In reality, if an owner is not paying additional money to the RMC for finding the renter/guest, the owner can afford to offer somewhat better pricing. So, in reality, the renter/guest ends up paying for the services of the RMC, albeit indirectly.
On-Line Vacation Rental Websites:
There are many on-line websites that list vacation properties for rent. The owners pay a relatively modest fee to advertise their vacation property. Such sites include VRBO, Trip Advisor/Flip Key, VacationRentals.com, etc. These sites provide a virtual market place for vacation property owners and renter/guests to connect with each other. In addition, some owners have an individual vacation property website, which often has more information and pictures than are normally available on the larger websites. For potential renter/guests, finding these individual vacation property websites is often a little more complicated. If the larger on-line websites allow links to individual websites, this may be the easiest way to find them. Another option for renter/guests is to use a search engine (Google, etc.) and search for “Sanibel Island” and then the name of a specific condominium complex (Compass Point, Pointe Santo de Sanibel, Sanddollar, etc.) Using these on-line websites, the potential renter/guests can see what properties are available, contact the owners and make their reservation arrangements most often directly with the owner. Although some owners handle their own reservations, the majority of owners, after agreeing on the rental dates and rate, refer the renter/guest to their RMC to handle the business aspects of the reservation.
Without the involvement of the RMC in obtaining the reservation, the owner often has more flexibility in rental rates, due to the reduced/absent cost for the RMC. For those renter/guests that are less familiar with using the on-line websites and dealing directly with the owners, going through a RMC seems to provide a higher level of comfort/security.
Rental Price Negotiation:
Some comments about rental price negotiation may be beneficial. When a renter/guest initially contacts a RMC, there is usually less opportunity for rental price negotiation on a specific property. If a guest does not want to pay the specified amount of rent (plus the additional fees and taxes) for the specific property, there is always another vacation property that is less expensive and may better fit the guest’s budget, if not their desires. When the renter/guest directly contacts the vacation property owner, via one of the on-line rental websites, there is often more opportunity for discussion concerning price, length of stay, etc. Because of the fixed and variable costs, owners can often be more flexible with rates for longer stays.
Having a potential guest request a lower rental rate from an owner is understandable. Most owners should accept such sincere requests graciously, especially in these more difficult economic times. Depending upon many factors, the owner may or may not be able to accommodate such a request. Having a potential guest tell an owner that the vacation property is very nice, but they just cannot afford the rental rate is also understandable. Owners recognize that many people would like more than they can afford. If the owner is able to lower the rental rate, this gives them the opportunity to do so. If not, the owner and the potential guest can move on, and there is no reason for hard feelings.
Most owners will try to work with guests, if they sense the guest is truly interested in their property. However, if the guest is just fishing for a lower rate to use against another property owner, this is usually not well received. When an owner asks what pricing/discount is being requested, the potential renter/guest is wise to offer a specific rate/price for the rental period. Otherwise, they do not appear to be seriously interested in the specific property and/or ready to make a commitment. As such, the owner may not have the time/interest in further negotiation.
There are many tactless/inappropriate comments that potential renter/guests are wise to avoid. Having a potential renter tell the owner that the vacation property, into which the owner has invested so much, is not worth the asking rental rate is insulting and not constructive. Having a potential renter offer “to give” the owner 50% of the listed rental rate probably does not even deserve a response. Having a potential renter suggest excluding the RMC from the rental agreement and having the owner pass along the saving as a lower rental rate is inappropriate. Such action would break the contract between the owner and the RMC. Having a potential renter tell the owner that they will not pay the tax is also inappropriate and illegal. Such comments usually end further discussion. If the owners are willing to be inappropriate in their dealings with the RMC and/or the state and county governments, why would the renter think that the owners will deal with them fairly? If the potential renter thinks that not honoring a contract or not abiding by the law is acceptable behavior, is that how they will deal with the owners and their vacation property?
If people would like to be treated as welcome guests in the vacation property, they are well advised to treat the owners as their hosts.
General Vacation/Rental Comments:
Most people quickly forget whatever they paid on a vacation and only remember how much they and their family enjoyed or did not enjoy the places where they stayed. Negotiating a low rental rate and having a mediocre or poor vacation time is not very wise. For most renter/guests a vacation on Sanibel Island is relatively expensive, no matter where they stay. The savvy traveler looks for high value accommodations that match their interests/needs, not necessarily the least expensive ones.
Trip Disruption/Cancellation and Insurance:
People make their travel/vacation plans expecting to do what they have planned. However, the unexpected does happen! Accidents, illness, funerals, hurricanes, travel disruptions, job loss, etc. are infrequent occurrences, but are all a part of life. If a renter cannot afford to lose their entire rental cost due to trip cancellation, they are wise to purchase trip insurance to protect themselves financially from the costs associated with such unexpected events. Although the property owner and/or the RMC can empathize with the unexpected and often tragic circumstances that may cause a trip disruption/cancellation, they cannot accept the financial risk for such problems. For this reason most RMCs offer trip insurance, which the renter is able to accept or reject.
Trip insurance policies vary from one company to the next. The renter is wise to review the insurance policy to determine exactly which unexpected problems it covers. Then they must decide if the policy’s coverage justifies (for them) the cost of the insurance premium, which can also vary, but is usually about 7% of the cost of the reservation. Since trip insurance policies usually require the purchase of the trip insurance at the time of the initial reservation or shortly thereafter, it is best to make a decision about trip insurance, prior to making the reservation.
Most owners and RMCs require a significant deposit at the time of the initial reservation to insure that the renter is serious about the reservation and to reserve the property for the rental time period. Payment of the remaining balance is usually due 30-90 days prior to the arrival date. Although trip cancellation policies vary, RMCs may charge a non-refundable reservation fee and/or a trip cancellation fee. If the property is re-rented for the dates of the cancelled rental period, then the RMC should refund to the renter the prepaid amount minus the reservation/cancellation fees and minus whatever difference, if any, there is between the amount of the initial rental rate and the subsequent rental rate. It is always wise for the renter to review the specific cancellation policy of the owner/RMC.
In summary, unexpected events may cause trip disruptions and cancellations. Neither the property owner nor the RMC can afford to lose revenue due to the renter’s trip cancellation. Trip insurance is available to reduce the financial problems associated with such cancellations. If a renter cannot afford to lose their entire rental cost due to trip cancellation, they are wise to purchase trip insurance to protect themselves financially from the costs associated with such unexpected events.
Owner Recommended Do's and Don'ts for Renter/Guests:
Most vacation property owners want their renter/guests to enjoy their vacation as much as possible and will go to great length to make things right for them. Only a small minority of owners and renters are difficult, thoughtless and careless, however this small group of people tends to make the vacation rental process more difficult than it needs to be for people of good faith. When owners find appreciative, caring renter/guests, they want them to return year after year and will usually work with them to encourage their repeat business. When renter/guests find a rental property that they enjoy and responsive owners whom they trust, they are wise to give positive feedback and rent the same property when they next visit Sanibel Island.