Rental Properties: The Good, The Bad and The Weird
Owners and prospective buyers of Lake Tahoe real estate will often contemplate whether or not it is valuable to consider doing vacation rentals or putting their property on a long-term lease. Vacation rentals are generally defined as any rental for a period of 29 days or less while long-term leases are normally considered to be for any length of time between 30 days and one or more years. Many long-term leases are structured with an initial rental period of one year followed by either a one year renewal or a change to month-to-month tenancy.
Generally speaking, long-term rentals will generate a higher and steadier flow of income than all but the best vacation rental properties. However, doing vacation rentals still provides you with the opportunity to use your property a significant amount of time during the year when it is not occupied.
Anyone who has rented their property for a long period of time will usually have stories to share about the good, the bad and the weird situations they have encountered over the years. While it might seem nice to rent your property on a one year lease and avoid the turnover that occurs with vacation renters, finding a great tenant can sometimes be a challenging experience. Not every tenant on a long-term lease is going to treat your property with kid gloves or maintain it in the pristine manner that you deliver it to them on move-in day. If you can find a tenant who enjoys maintaining your property with the same care and pride of ownership that you have, then it can be a win-win situation for everybody.
Good tenants will keep a property relatively neat and clean, report repairs and problems in a timely fashion and will not offend the neighbors by creating any type of nuisance. They will also pay the rent on time every month and sometimes even handle minor repairs on their own without troubling the property owner. When it comes time to renew the lease, it’s much easier for property owners and rental agents to feel encouraged to continue with a good tenant who has shown a high degree of responsibility during the previous year of the rental agreement.
But not every tenant falls into this category. Some renters will treat the property with slightly less concern than a cheap motel room. It’s not unusual for a less than stellar tenant to ignore reporting repair items to the rental agent or property owner for months at a time thereby reinforcing the old adage that an ounce of prevention is worth a pound of cure.
What started out as a small leak from the drain pipe under the kitchen sink can turn into an expensive repair job when that trickle of water makes its way through the floor and into the ceiling below or down into the adjacent walls. And that’s just for starters. Occasionally, after a tenant moves out property owners will discover all sorts of damage including holes in the walls, doors yanked off their hinges, broken appliances, torn or stained carpets and even the disappearance of furniture or appliances. And then you may hear stories from the neighbors about the auto repair shop, puppy mill or meth lab that you were not aware of. We even know of one tenant who was breeding giant Burmese pythons in the basement.
If you are thinking of renting your property on either a short-term or long-term basis it’s good to have an understanding of both the positive and negative factors affecting your decision. While the extra income is nice it has to be weighed against the possibility of extraordinary expenses and additional repairs that may result from permitting others to occupy your property. It’s impossible to be absolutely certain upfront whether a tenant will be good, bad or simply weird. But engaging the services of a professional rental agent or property management firm can go a long way towards making it a positive and rewarding experience for everyone involved.
Weekly Real Estate Update
Statistics gathered from the Incline Village MLS on 5/5/19
Houses Condos PUDs
For Sale 80 32 5
Under $1 million 10 27 4
Median Price For Sale $2,995,000 $559,000 $558,000
YTD Sales 2019 35 46 17
YTD Sales 2018 54 57 19
New Listings 9
In Escrow 9
Closed Escrow 10
Range in Escrow $432,000 – $3,998,000
These statistics are based on information from the Incline Village Board of REALTORS® or its Multiple Listing Service as of May 5, 2019