Smarter Renting - By Owner Vs Agency

Many vacation property owners turn to seasonal leasing in order to offset some of the expense of owning a second home. These owners have many choices for locating prospective tenants and “booking” their rental property. Two of the more common alternatives are renting by owner and using a rentals agency.

Rental By Owner
For rent by owner has increased considerably in recent years with the growth of the internet. Websites catering to vacation home owners offer an easy and cost effective means of reaching a world wide vacation market. Property owners are able to exchange leases by email, and accept deposit through Paypal. Properties get booked and vacation owners retain more of their rental income. This doesn’t mean there aren’t pitfalls to renting by owner.

The most common problem that arises from by owner rentals is maintaining the property from long distances. Most vacation home owners rely on neighbors and friends to keep an eye on the property. This can usually be remedied by paying for a professional home watch service, but these services aren’t cheap and can cut into the rental income. Many of the problems for rent by owners have are simply due to their inexperience with rentals. They fail to understand how competitive vacation rentals are, or how high renter’s expectations can be.

Renters have also benefited from the availability of literally millions of options for travel accommodations. Renters can now search through endless web pages of rental properties with detailed description and video “virtual tours”. Renters also have the benefit of identifying properties with unique requirements like “handicap accessible” and “pet friendly”.

The by owner phenomenon will most likely continue to grow in prominence. In recent months many owner websites have merged, most notably is VRBO purchase by HomeAway Inc., HomeAway Inc. has already consolidated the leading by owner websites CyberRentals, A1Vacations, TripHomes.com, Holiday-Rentals.co.uk HolidayRentals.fr and FeWodirekt.de. HomeAway Inc. is owned by Austin based company WVR Group Inc.

Rental Agency
With the stiff online competition created by “by owner” websites rental agencies have been forced to adapt to the changing market. Many rental agencies have designed and developed websites that offer many of the features and capabilities of their online competition. In addition, rental agents also list their properties on competing rental sites.

Like real estate agents, rental agents offer a variety of expertise like market valuation, creating lease contracts and advertising the rental. They can also be relied upon to monitor the rental home. Experienced rental agents tend to know how to deal with difficult tenants and are able to recognize potential problems before they arise. Of course the hiring of a rental agent can be expensive, with commissions typical between 10% and 20% of gross rental income.

Rental Hybridization
As the online competition for vacation rentals increases some rental agents have begun to hybridize their industry with the internet. These rental hybrids offer all the benifits of online marketing with services like home watch, and residential cleaning after tenants check out. These hybrid rental companies can offer fee based services or lower commissions.

The vacation home owner has the choice between the “by owner” websites, rental agencies, or the hybrid rental service. For the owner looking for no headache and full service the rental agency is the logical choice. The do-it-yourself style property owner might consider using a hybrid rental service or just listing their property with an online rental website. Either way the online vacation rental industry is likely to only get larger as more people become accustomed to search the internet for the perfect rental home.