How U.S. Homeowners Can Cash in on the Domestic Travel Boom

International forays dominated the travel landscape last summer with Americans venturing to Europe, Asia and other far-flung locales. But this year, staying stateside appears to have a renewed appeal.

Travel specialists report that their U.S. bookings have increased compared to last summer due to a number of factors, including the growing cost and headache of a getaway abroad. Michael Holtz, the founder and CEO of the global travel firm SmartFlyer, for one, said that his domestic business is up 25% compared to last year.

Given this, the time may be ripe to rent your home for the season or at least for several weeks between June and July. Frances Katzen, an agent with Douglas Elliman in New York, said that consumers today, especially families with young kids, are seeking travel options that offer less hassle, and a summer rental is an attractive proposition.

“Sharp inflation costs across the board with travel have contributed to many families staying closer to home and choosing staycations—so instead of spending on a first-class international flight and multiple rooms at a luxury hotel, they might stay local and rent out a highly amenitized mansion that is convenient and has plenty of private outdoor space,” she said. “Wealthy travelers are looking for privacy and exclusivity that oftentimes you can’t get by staying at a hotel.”

There’s no question that short-term and seasonal rentals are well-poised for a solid summer, according to Jonathan Miller, the president and chief executive of the real estate appraisal and consulting firm Miller Samuel.

Short-term stays like Airbnb, VRBO and luxury products like onefinestay tend to rent for two to three times the rent per square foot of a 12-month traditional lease without considering vacancy, he said. Further, they offer the benefit of having access to your home in between short-term stays combined with the attractiveness of generating additional income.

“Travel accommodations continue to be in high demand after the stay-at-home nature pandemic era,” Miller said. “These factors combined make a compelling reason to consider renting out your home.”

However, he cautioned that some vacation markets are over-saturated with short-term rentals, so pricing levels have slipped from previous years. “Do your homework before listing your home to make sure you’re in line with the standard in your destination,” he said. “You want to ensure that your property actually rents.”

In South Florida, for instance, demand for vacation rentals varies significantly depending on the location, type of property and timing—each area and season is different, said Minette Schwartz, an agent with Compass in Miami. Overall, though, this is an opportune time for owners to list their homes for short-term rent.

But even hot-weather locations like South Florida will have prospective travelers hunting for a summer-rental this year.

“In South Florida, typically winter is our high season, and summer is our low season for short-term rentals, but that has shifted recently as a result of continued demand and migration to our area,” she said. “Many people from the Northeast and California who are considering relocating plan a vacation here during the summer to test the waters for a few months while their kids are out of school.”

During the summer months, Schwartz said that it’s all about the outdoors, so beachfront and bayfront properties perform better versus properties not on the water or far from the beach. Emphasizing the outdoor aspects of a property can help attract a tenant.

“When listing your home, make sure to highlight your outdoor amenities—ample outdoor space, a pool, summer kitchen and boat dock are highly sought-after and can demand a premium,” Schwartz said. “People are also looking for the ease of being at a “‘home away from home’ with all the conveniences they would normally have, including a great kitchen and multiple rooms.”

As for when to list, she said that since the demand is from Memorial Day to Labor Day, owners who want to draw the most eyes to their properties should post one to two months prior to summer is best.

Katzen of Douglas Elliman also recommended May as the prime time to put a summer vacation rental on the market.

“That is when most people are ready to make a decision,” said Katzen, adding that until then homeowners should get a pulse on demand and potential rental asking prices as well as understanding the specifics of the local market.

For instance, some buildings and areas do not allow short-term rentals, she said. Further, for luxury homeowners, daily rentals may not be the best option due to the footprint and potential damage to the home from people coming in and out.“It’s important to determine the proper security deposit and insurance for your property and try to keep a house manager on call so that if there’s ever an issue, you have someone there who can handle it and check on the house to ensure the upkeep,” she said. “Always have a service team retained and paid by the tenant to keep the house looking as good as possible.”

If you’re a homeowner and you have the opportunity to rent your home in the summer, do it, said Cindy Ambuehl, an agent with Christie’s International Real Estate in Los Angeles.

“Many residents of big cities, including Angelenos, travel to Europe for the summer, and they can rent to a vetted ultra-high-net-worth family who may want to test out their market,” she said. “It gives the owner the chance to bring in big money on their house.”

Ambuehl said even celebrities in the Los Angeles market will rent out their homes.

Ambuehl shared an example of a recent rental in Los Angeles that she led where the homeowner’s carrying cost was $40,000 a month, but the rental went for $150,000.

“My advice is always to make sure you have double the insurance of the value of your home, truly vet the client and use an agent so all parties are protected,” she said.

Via Mansion Global