Why your busines needs to do vacation rentals.
Do you own a real estate company? If so what is it worth? The reason I ask this is simple, does your company have any value. The answer in most cases is no because your real estate company is only as valuable as your current sale, that is unless you own the building. So what is your exit strategy? If you plan to retire will you sell your company, live off of savings or have you invested in real estate?
Did you know that last year Wyndham bought two vacation rental companies for 56 and 77 million dollars each? That is over $16,000 per managed property for Wyndham and $33, 0000 per property for Jack Tar. If that number fails to hit home then consider this, in 2009 27% of all homes purchased in the United States were second homes (NAR). If you live in a resort community, obviously that number is significantly higher.
In addition, last year 40% of homes purchased were done so specifically as an investment or as a vacation home according the 2010 NAR Second Home Investment and Vacation Home Buyer Survey 2011. Why? In part because the stock market is still uncertain., Real estate while also uncertain is a tangible asset and over time has always proven to be a winner, you cannot say the same for a specific stock. In addition everyone needs to live somewhere. Furthermore everyone still takes a vacation. It may not be as extravagant as it used to be, but a the number of vacation days the average US family took in US in 2010 was 14 (http://money.cnn.com)
Wyndham and many of their lodging competitors realize this. They also realize that buying and refurbishing or building a new hotel is expensive, even before you open the door. We at Barefoot believe that the future of the vacation industries will follow this pattern. Wyndham, Marriott, Westin and other hotel giants will pick markets, look for the best property management and real estate sales company and walk in with a check. I don’t know many real estate and property management companies out there that would say no to a paycheck that is $7 million. Especially when the lodging company, says look I want you to run it like you have, but here is insurance and a 401 plan for your employees. A call center for after hours, training, linen and international marketing. In regards to the major brands currently like Century 21, Remax, Keller Williams, do you do that for your agents? Do you have the branding that Marriott and Wyndham have? Face it Wyndham is already in real estate sales, the call it time share it is only a matter of time before they franchise their vacation rental, property management and real estate sales product. The difference will be that rentals will no longer be the poor step child, sales will. Think about it. If you manage the property-you are most ideal to sell it. If you have an intimate relationship with the owner-you are more likely to sell or assist that owner in buying. If you have an intimate relationship with the tenant-when they decide to invest in a second home, or move to their dream you will be their choice. This is social media at its best.
All of these reasons should be enough to convince you that rentals are the way to go. If you are still worried that you are not big enough or competitive enough, here’s one last piece of information. Wyndham does not necessarily want the biggest, they want the best within their niche. They want a company that thinks like them, has social media, business plans, concierge, a great value proposition and efficiency that comes from cutting edge technology. When Wyndham bought Resort Quest, they learned from Resort Quest’s failed model, don’t try to standardize. Each market is different, rustic means something different in Gatlinburg Tennessee, than it does in Destin Florida. Embrace that uniqueness but wrap it with efficiency.
Will your company be there to capitalize on these trends? At Barefoot our motto is “Vacation rental software for Visionaries”, and we are curious if you fit this description. If you would like to be a leader in your market, and set the bar that your competition will follow then contact Barefoot Technologies and lets have a conversation.
“Investment and Vacation Home Buyers Survey 2011” National Association of Realtors. Research Division, March 2011