Buying a Second Home to Rent : The Brennaman Group
The Charleston, SC region is very popular right now for people looking to purchase second homes. Many of these potential home owners are also looking to rent the houses while they are not there to help pay for the costs. If you are in this market, there are some things to keep in mind. One of the first things to consider is the cost of the home. You want to buy a house that is affordable and fits within your budget. Some things that will increase a house's worth are proximity to the ocean, its occupancy cap, and a pool. The more a house offers, the higher the price. Of course a higher cost house will also bring in a higher rental cost. Do the math and consult local realtors and rental agencies to figure out exactly what you can and cannot afford.
Another major cost factor is the home's proximity to Charleston, SC. The closer the house is to the city, the more expensive it will be. The area around Charleston is in very high demand. Places a few miles away could potentially be half as costly as the nearer areas. But you must weigh the pros and cons of being closer or farther away. Since the closer areas are in higher demand, you will be more likely to rent the house. Again, it is a good idea to consider your budget and seek the advice of people who know the market well.
One more serious concern when looking for a rentable second home is the occupancy cap. For instance, Isle of Palms, SC has a maximum occupancy of 12 people for any new construction home. Homes that already have rental agreements with higher occupancy rates are grandfathered into the system. These limits can damage your ability to rent out a house. Something else to be sure of before purchasing is whether or not you will be able to rent out your second home. Some areas have a limit on the number of rental licenses they will allow. If there are no more licenses, then you will not be able to rent your home. This is something that a realtor can help you with.
Once you have purchased a house and gotten the rental license, it is time to pick a rental company. When you are choosing a company to rent your house out for you, make sure that the company is trust worthy. You want a company that is going to look out for you and your renter's best interests and not just their own bottom line. This is especially important if your primary residence is not nearby.
An example of a company you might want to work with is Exclusive Properties. In this video, Mel Miles of Exclusive Properties told his story of how he came to start his rental company. He and his wife started the company after they had bought their second home and had problems with the large rental companies. They were being nickled and dimed for every little repair or replacement. They were even being charged for things the renters broke. They went through a few different companies and still had to do some of the rentals themselves. Eventually they moved into the area and started Exclusive Properties.
They run the business the same way though would want a rental agency to run if they were using one. They do not up charge for house maintenance. They take care of problems before renters get to the house and notify of anything that needs work before it becomes a problem. As of the time of writing, Exclusive Properties has 4 property managers and no more than 20 homes at a time. This way they can make sure that the home is well looked after.
They also take a very hands on and personal approach to dealing with their customers. One of the property managers meets the renter at the home and shows them around the house. They make sure they know how to operate everything and handle and issues personally. Building this relationship increases customer satisfaction and helps to reduce the number of complaints or problems renters have while staying at the house. This is also good for the home owner because there will probably be fewer things broken or damaged.
In this video, Mel also discussed the possible financial and tax benefits of owning and renting a second home. Even if your specific net income may not be positive in all cases, the tax benefits from the depreciation of the house and its contents may more than make up for that. Then again, you may have positive net income from renting which will be even better. You'll be earning both ways.
Buying and renting out a second home can have some great benefits. If you think this lifestyle is for you and can afford it, use the information and tips in this blog to help you make the right decision, and give me a call at (843) 345-6074. The benefits of a good investment can take you a long way forward in your life.