Sharonjet09, Home Seller in Guerneville, CA

The house is a 2 bedbroom 2 bath, approx 1200 sq ft. New build 5 yrs old. We would like to know if we should rent it out as a vacation home or sell.

Asked by Sharonjet09, Guerneville, CA Sun Aug 14, 2011

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Kyla Brooke, Agent, Guerneville, CA
Sun Aug 14, 2011
Dear Sharonhet09,
Vacation Homes in Sonoma County are now under the Vacation Rental Ordinance and have specific requirements. In my experience, vacation rentals also need certain types of amenities to be successful. I would need more information to better answer your question. Please feel free to contact me directly.
Your house matters,
Kyla
0 votes
John Arendsen, Agent, Leucadia, CA
Sun Aug 14, 2011
I'm not real clear as to what type of property it is. Could it be a manufactured home in a rental/lease land park? If so it is very difficult to sublet given the rules and regulations that govern most rental communities. Just curious.
0 votes
CJ Holmes, Agent, Santa Rosa, CA
Sun Aug 14, 2011
The decision to sell or rent out a property involves the consideration of at least 4 facts: 1. what is owed on the property (this will help determine if it can actually be sold now without selling short), 2. what income the property is likely to produce as a rental (of any type), 3. what other purchase opportunities might be missed if you rented it rather than sold it, and 4. are you ready to take on "landlord type" liabilities and responsibilities.

If the property can be sold for a net gain, then the questions become how long would it take to sell, and how the net proceeds would be redeployed.

If the property is already upside-down or could only sell for breakeven (pay off everything but no net proceeds - many owners are in these positions), then the choice is more about holding onto the property for some rental income while waiting for its value to increase.

Typically vacation rental companies charge between 30%-50% of the gross rents for their services. Many owners decide to use VRBO.com (vacation rental by owner) which can be an effective way to handle it, IF you are willing and capable of handing the business yourself. Make no mistake, it is a business. You have to accept credit cards, make cleaning arrangements, set a calendar, deal with any maintenance/repair issues or breakage, take on the liability of a renter misusing the property... the list goes on and on.

Vacation rentals are not rented 100% of the time, so in estimating net rental proceeds, be very conservative in your numbers. Estimate income low, and expenses high. That technique will be more likely to give you a realistic idea of what your efforts would net you as a rental. And don't forget to get solid insurance coverage. After the last fiasco in the River area of a deck collapsing with too many non-permitted house guests by the vacationer, you need to be sure to limit your liability as much as possible.

You may decide, like many others, that selling would be simpler, safer and lead to other desirable opportunities.

Best of luck to you in this decision time. Don't hesitate to ask me any other questions you may have. As may be obvious, I have other clients that run their own vacation rentals, and sometimes decide to sell them. cj
Web Reference:  http://www.cjholmes.com
0 votes
Sheila Lawre…, Agent, Sebastopol, CA
Sun Aug 14, 2011
Hi Sharon,
It is true that the county now requires vacation rentals to register and pay an occupancy tax. But you may want to call a rental agency first and have them come out to look at the house to give you an idea of its potential. Russian River Getaways does a lot of business in that area. They have a pretty extensive website too that might give you an idea of rates. You can also do VRBO--Vacation rental by owner, there's also a site for them. There's probably a one or two other companies, but that all I've got off the top of my head.
Best,
Sheila
0 votes
Dave Roberts, Agent, Healdsburg, CA
Sun Aug 14, 2011
Hi Sharon,
The Sonoma County Board of Supervisors has adopted vacation rental guidelines (see link below) that may affect the ability to use this a vacation rental. I would check with the county (or have your real estate agent check) to see if this would be a legal vacation rental before making any final decisions on what to do with it.
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