One of the great things about owning a home in the Hamptons is your ability to rent it out. Yes, for some it’s a cash cow and can help off set most of your yearly expenses in just 3 short months. But you better know what you’re doing. If you rent to the wrong tenant or your house isn’t ready, you could end up making less than money than a romantic comedy with Katherine Heigl and Nicholas Cage.
So what do you need to know and how do you get the most money possible for your rental? Well luckily Hamptons Chatter is here to tell you.
Price it Right – This is my rule of thumb… if you just bought your house and it’s decorated and well maintained, you can expect about 4-5% the cost of the property for the Memorial Day to Labor Day period. 50% of that should be counted for the August rental. For example, your Restoration Hardware decorated home you just bought for $1,000,000 should rent MD-LD for $50k or $25K for August. This is not a hard and fast rule. If your house is a few years old, ask an agent what they think would be a good rental price. It’s also not a science so adjusting the price as you get close to the season may be needed.
List your property properly – First off, keep it as an open listing. Unless you’re renting your home for $250k or more, most companies won’t even take an exclusive rental and that’s not a bad thing. Agents are no different than anyone else and they’re looking to earn a living. So if it’s between a $100k rental that’s an exclusive rental where the agent will have to give a chunk to the listing agent or an open listing where they get the lions share, which one do you think they’re going to show? Most rental listings in the Hamptons are open listings, so keep yourself competitive. But also know, unless you tell your agent to share the listing you’ll need to make sure every company has your home and at the right (same) price!
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Get the house ready to go – If agents are starting to show your house, it should look like your tenants are moving in tomorrow. Reduce the clutter around the house, make sure all of your photos and personal Nick-knacks are stored away and please, please, please keep it neat and clean. Also, less is more…. if the house is overloaded with furniture that’s not a plus for most tenants, it will only make the property feel crowded and full.
your house if there are dirty dishes are in the sink and pet hair on all of the sofas (nobody wants to live in someone else’s dirt). “Clean” is also a key word when it comes to decor. Busy patterns or tons of floral bed spreads, pillow cushions or curtains will overwhelm some potential tenants. While you’re taste may be good, it might not be for everyone. That’s why Do not show Baskin and Robbins has 31 flavors but you don’t need that many colors!
Make it and easy show – While I don’t suggest leaving a key under the mat (that’s a really bad idea for a number of reasons). You have to make sure agents have easy access to your property. Customers run late… HELLO, IF THINK YOU’RE IN THE HAMPTONS AND YOU DIDNT HIT TRAFFIC YOU’RE ONLY IN SHIRLEY…. and sometimes agents run late too so if it becomes to difficult to coordinate they’ll move on. The best way to control access and make sure you get shown is to drop a key off with your local broker. They’ll keep the key locked up and log who borrows and uses the key. You could also buy a lock box or better yet buy a digital remote system where you can grant access to your home via your cell phone. My personal favorite is the KEVO system, which you can buy easily enough on Amazon.
Get professional photos – If you want a good laugh, go through one of those “home for rent -by owner” sites. Would you rent some of these homes? I didn’t think so. Bad photos are a home owners biggest enemy. My advice is hire a professional photographer (call any agency they’ll recommend who to call) and then share these photos to all the agencies. You have to spend money to make money and this particular expense is a no brainer to me.
Finally a few last points about “Hamptons Summer Renting” – if you use an agent to rent your house you’ll need to pay the commission and in most cases it’s 10% of the term of the lease. It might seem like a lot but most agents screen their customers or get them via referral. You’ll be less likely to get a bad egg tenant. Also, most leases require that tenants will maintain the property while in residency, so make sure they use the folks who know the house… your housekeeper, your lawn guy, your pool person, etc.
Also, if you live in Southampton Town make sure to get a rental permit. It’s not easy to do but it will protect you in the long run if you have problems with the tenant.
Now remember, I couldn’t cover everything in this brief posting but I hope its a helpful start. I also know not everyone will agree with my advice so feel free to post what you think.
