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It seemed like a great idea twenty years ago. You’d buy that condo in Hawaii, vacation here as often as possible, then someday sell your primary residence and spend your Golden Years basking in the sun. Now, ‘someday’ is here and—lo and behold—you’ve changed your mind. You have grandkids you don’t want to leave, all your friends are nearby, and frankly, the idea of nonstop sunshine with no autumn leaves or snowfalls has lost its luster. You’d hate to sell your vacation getaway, but keeping up two homes has gotten too pricey for comfort. Is there a solution?

‘Absolutely yes,’ says Christine Karpinski, director of Owner Community for HomeAway.com (Home Away.com) and author of two books on vacation renting (details at the end of this article). ‘Renting out your vacation home allows you to have your cake and eat it, too.’

Many seniors find themselves in this position, she adds. Yet, changing lifestyle trends, combined with a rising cost of living, have led many to reconsider the fate of their vacation villas.

Here are five reasons why you might consider renting out your vacation home:

• Circumstances have changed since you made your retirement plans. Maybe grandchildren have arrived on the scene and you can’t bear the thought of moving hundreds of miles away from them. Or your parents are in poor health and need you nearby. Or your spouse has passed away and retiring to Waikiki was his idea, not yours.

‘Life rarely turns out how we planned’ notes Karpinski. ‘It pays to be flexible and keep your options open.’

• You’ve suddenly realized there’s no place like home. Maybe there are no dramatic life circumstances keeping you from moving to your ‘dream destination.’ Renting your second home out during the time you are not staying there makes it financially feasible to keep both homes.
It’s the perfect balanced solution.

• You’ve decided to retire from retirement. It is not unusual for people to test-drive retirement and find that it’s just not for them.

‘When people decide to postpone retirement, they may also postpone moving to their retirement home,’ says Karpinski. ‘Even if they do retire and then rejoin the workforce either full-time or part-time, they may not want to live in the city they associate with retirement. It’s a psychological thing.’

• Your fixed income hasn’t kept up with your lifestyle. Admit it. Even when you’re happy to give up the daily grind of your job, losing the paycheck that comes with it can be pretty painful. Factor in inflation, rising taxes, and unexpected ‘new’ expenses, and you may find that what seemed like a manageable cost of living five years ago doesn’t seem that way anymore.

‘If you have a mortgage on your second home, renting it out only seventeen weeks will cover your mortgage payments for an entire year,’ Karpinski says. ‘If it’s paid for free and clear, only five off-week rentals will cover costs like bills for your phone, power, cable, and association dues. All the rest is profit!’

• You’re currently renting your vacation home through a property management company, but you’d like to make more money. Ditching the middleman may be the way to go. Property managers simply charge a hefty fee for their services. In fact, as Karpinski’s books point out, you have to rent ten more weeks with a management company to end up with the same amount of money you’d make renting-by-owner. And with the growing popularity of vacation home rental websites like HomeAway.com, finding renters is surprisingly easy.

And here’s a surprise: people who try renting-by-owner often end up liking it so much that they pour their earnings into another vacation home. In fact, a recent survey by the National Association of Realtors® found that some 55% of vacation homebuyers said they were likely to purchase another property within two years.

‘Who knows: becoming a vacation rental property owner may become your encore career,’ says Karpinski. ‘Buying and renting out vacation homes is addictive. I’ve done this for years and I can’t imagine ever not doing it. It’s more than a way to make money. It’s a richly rewarding way of life—at any age.’
 
Christine Karpinski is a consultant/advisor and author of How to Rent Vacation Properties by Owner, The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment (Kinney Pollack Press, 2007) and Profit from Your Vacation Home Dream: The Complete Guide to a Savvy Financial and Emotional Investment (Kaplan, 2005). 

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