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There is a debate raging around the world right now about the pro's and con's of vacation homes and pied-a-terre's, either owned for personal use, or rented out as an investment, or both. Everything in life has it's pro's and con's. Here is my list:
PRO'S:
1. High demand - and additional demand from those not seeking a full time home - fuels valuations for all properties surrounding vacation homes.
2. These homes generate real estate taxes that benefit all. If not used full-time, they pose less of a strain on local infrastructure, roads, schools, etc that are of benefit to locals.
3. These homes fuel employment: construction, renovation, maintenance, etc.
4. Some areas and buildings impose additional rental taxes and transfer taxes with more income for the locals.
5. People on vacation often spend more on restaurants, shopping and local amenities collecting sales taxes that benefits the locals.
6. Areas that have a mix of locals and visitors makes things locally more interesting for everyone.
7. Those renting out homes for shorter term vacation rentals often maintain the homes better to maintain high ratings and rates.
CON'S
1. Additional demand for these homes fuels home prices for everyone most times. Local wages and incomes may not compete. Removing inventory for long term rentals/ownership deprives inventories which usually fuels pricing.
2. The behaviors of renters or those on vacation can be 'different' than the locals. Some simply do not respect local ordinances related to noise, parking, etc. We have all heard of the out-of-control party houses!
3. Some part-timers don't care for the properties the same way as full-timers.
4. During 'down' seasons, those employed temporarily are left unemployed.
5. Some who own a pied-a-terre do so primarily to avoid local taxes, but use that area to generate enormous personal wealth, depriving the locals of tax revenues that others have to compensate for.
6. Local laws can change, so what is allowed today may not be allowed tomorrow, or cost more. This can either elevate or depress home values.
7. Powerful hotel industry lobbyists see short term rentals as competition and will continue to fight this.
Short term rentals and part time ownership are something most of us are exposed to: knowing the pro's and the cons and being able to message them clearly is valuable. Equally valuable is participating in the local political dialogue to ensure the end result is a win-win-for all.
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Ken interprets market data, staying in constant communication and offering valuable insight that then translates into an informed decision.
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