A higher supply and the housing slump mean the already affordable fall season for vacation home rentals will be an even better bargain this year
Back from summer vacation? Need another one? Beach and mountain vacation rentals are always more affordable in the fall season than in the peak summer or winter months. And this year, expect deals to become steals.
"It has always been the case in the off-season that owners are going to be a lot more flexible with price," says Brian Sharples, chief executive of vacation rental Web site HomeAway.com. But in 2007, even the summer has turned out to be a renter's market in some spots, as higher inventory and increased competition leave many owners in a position where they have to negotiate.
"My perception is that the reason there is lots of good stuff out there has much to do with the fact that there's just a lot of new supply," Sharples says. "There is so much inventory coming to market that there are places available at the last minute."
More Rentals, Fewer Renters
The reason for the increased supply is twofold. A vacation property construction boom over the past few years has boosted the number of vacation homes out there—44% of vacation homes purchased in 2006 were new, according to the National Association of Realtors. Now falling home values have made renting out a home for extra cash a more appealing option.
"When everybody felt good about appreciation they didn't even need to rent," says Sharples. "Now that people have started to get concerned about valuations, we're seeing a lot more people moving into the rental market." HomeAway.com was launched in June, 2006, with 60,000 properties in 90 countries, and now has 95,000 properties in 100 countries.
In the ski resort town of Stowe, Vt., Annette O'Brien rents out her primary residence—a five-bedroom house with mountain views—about 90 days a year, in part to help pay a staggering $13,000 a year in property taxes. This year O'Brien says she plans to discount more than usual. "So far I would say demand has been slower," she says. "My inquiries are a lot less than they used to be."
A Family Affair
It's not Martha's Vineyard, but Stowe is even busier in the summer than during the peak winter ski season of December and January, O'Brien says. Families spend weeks hiking, biking, and horseback riding against the scenic mountain backdrop, enjoying the milder weather and avoiding the crowds of beach resorts. Between the peak summer and winter seasons, kids go back to school and rentals become cheaper, and this fall could turn out to be the best bargaining season in years.
"Basically all the rentals have been slower because there are so many now," says O'Brien. "Everyone is going to drop their prices in September and October. You can get a really good deal after the eighth [of October], and there's still plenty of foliage left."
Since renting a house for a vacation is usually a family affair, the peak seasons for rentals are directly related to school schedules, making July, August, spring break, and the weeks surrounding the Christmas holiday the busiest times at most mountain and beach resort areas. Ski areas remain popular in January. The off-season generally starts after Labor Day and runs through November, picking up again in the spring.
September, sometimes referred to as the "shoulder season," can be an ideal time to vacation, especially along the Atlantic seaboard where the air and water are still warm but the prices have cooled. "You get out of August and into September and you'll find a tremendous amount of availability in Martha's Vineyard, Nantucket, or the Carolinas," says Sharples. "I've actually been to Nantucket in September and it was wonderful because you could park and have the shops to yourself."
Tips for Deal-Seekers
Finding a good rental deal in the upcoming off-season may not be much of a challenge, but it still helps to know how to get your full money's worth. Pay attention to local school-district schedules and avoid renting during break periods, says Christine Karpinski, author of How to Rent Vacation Properties By Owner and owner of vacation rentals in Florida and the Tennessee mountains. Many southern schools begin in August and have a fall break either in the last week of September or the first week of October.
"The second and third weeks of September and the third and fourth weeks of October are going to be great weeks to find deals in Florida, Georgia, Myrtle Beach and Hilton Head, S.C., the Tennessee mountains, Branson, Mo., and the Ozarks," Karpinski says. "And historically, the first week of November is the cheapest week." The Gulf of Mexico is still relatively warm at this time, she notes.
Dealing Yourself Out
To maximize the luxury factor, you might also want to look for rental homes advertised as "an eight-bedroom for the price of a two-bedroom," Karpinski says. Sometimes owners lock off bedrooms and rent a house for less, but you still get luxurious amenities such as a living room with cathedral ceilings and a spacious bathroom with Jacuzzi tub.
Remember, there is always room for negotiation in the off-season. Just don't push it too far. Many people who own second homes don't need to rent them out, and have just come out of their busy season with a lot of money. "Don't ask 'what is the best deal you can give me,'" Karpinski advises. "If your objective is getting the best place for the cheapest amount I don't want that kind of renter in my property. But it's okay to say, 'Hey, is that your best price?'"
Click here to see where to find the best deals for fall vacation rentals.