Jocko

Melissa--

I just noticed that you have a rental on your website for $3,500/wk that is also listed as on the market for $1,000,000 on zillow.

This seems like a more realistic listing price/rental rate for the cape to me.

But again, if you have any 100x or less ratio listings, I'd love to hear about them.

Thanks - Fri Oct 9 2009, 12:46

Mellisa-

Can you identify any properties currently in Hyannis (or anywhere on the cape) that are on the market for $350K that rent for $3500/wk in the summer? If so, I will come down and buy it this weekend (really).

Actually, how about anything that rents for more than 2000K/wk and purchase price is no more than 100x weekly in-season rental rate?

I sincerely doubt your numbers, but if you can identify anything at this purchase-to-rent ratio, I am a serious buyer.

Thanks - Fri Oct 9 2009, 12:35

The only way to make a vacation rental purchase actually cover costs is to have a huge down payment and forget about the fact that your down payment $ might have been earning interest elsewhere had you not used it to buy your "dream" Cape Cod property.

Consider the following monthly costs:

Principal & Interest
Taxes - can be considerable
Insurance - generally pretty high for second homes - say 100-150/mo?
Utilities - do you want to watch TV when you go on vacation?
Services - Cleaning - sometimes this is an extra fee passed on to renters, sometimes not.
Services - Maintenance - i think there is a basic maintenance cost to operating a rental house. stuff will get broken
Services - Rental Fee - usually 10%, or one week's rental fee to the realtor. or maybe you'd like to handle it yourself? ...
Services - Advertising - if you are handling it yourself...

So consider a decently priced cape cod vacation house. is it $300K? $400K? $500K?

I have run the numbers so many times my fingers are numb. It just doesn't work unless you plan on spending most of the summer on the cape and are just looking to offset costs. Even then, it's hardly worth the hassle of opening up your house to strangers.

The only viable plan is to be really really rich- so start working on a scheme to defraud/steal from someone else.

Phew. Had to get that off my chest.

Seriously, "Real Estate Pros"- I challenge every one of you to come up with a legitimate vacation rental home purchase scenario on the cape that makes financial sense. - Mon Mar 2 2009, 14:51

This listing closed in May at 10.1% of list price. Sydney, did you purchase it? Congrats if you did! - Wed Jul 8 2009, 16:13

I am not a professional, but watch the Eastham market pretty closely with an eye to purchase in the 5-600K range.

35 Patrician Lane is one of the nicer houses that has come on the market under 1M in the last couple years. This is the problem- the housing stock in Eastham just isn't that great.

My advice: if you have the $$$ to offer $950K, do it. It is in no way insulting. Chances are, someone else out there has the money and may decide to put an offer in close to list price.

However, I think this place should be listed at $850K. And is probably worth around $800K, given the market conditions and the fact that we are in the worst financial crisis since the Great Depression. If it were me, I would let it sit for a couple months and then make an 800K offer on the assumption that they will negotiate up. It might be insulting, but there are few buyers out there in this range. Better to be insulted with cash in your pocket than waiting out the real estate recovery.

The problem with just taking 10% off the list price these days is that often sellers are unrealistic. Further complicating things is the fact that not much has sold around there lately so it's hard to get a good read on what values are like.

Again, if you have the money, I wouldn't fool around though. That little area (Cole Rd) is very nice, one of the nicest neighborhoods in Eastham in my opinion, and not much comes up over there under 1M.

Have you seen 1600 Samoset? Right next to First Encounter and has a great rental history. Only 689K after a quick 10K price reduction.

Good luck, please post your impressions of the property. - Sat Apr 4 2009, 10:41