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Rice Law Office Blog

This blog reviews important legal issues including: personal injury, employee compensation, workers compensation, discrimination and wrongful termination.

National Homeownership Month

National Homeownership Month

In 2002, June was declared National Homeownership Month by President George W. Bush, building upon the focus given to home ownership by the Clinton Administration beginning in 1995. The pride in homeownership here in the US, however, runs deeper than the last two decades. The ability to own your own home, if you work hard, is central to the American Dream. President Clinton began his campaign to extend homeownership in the US month 20 years ago—as we hit the halfway point in this year’s National Homeownership Month what is the state of progress in building American home ownership?

Today, homeownership in the US sits at the lowest rate since 1989. The homeownership rate fell to 63.8% in the first quarter of 2015, and has declined steadily since peaking at 69.2% in 2005. Much of the decline can be attributed to fallout from the 2008 financial crisis, and the housing bubble which helped drive the financial collapse. Americans have been cautious since then, and many families are only now recovering enough to consider buying a home.

There are, however, reasons to think that homeownership is poised to make a comeback. There are nearly 2 million more renter households than there were this time last year, and eventually, some of these renters are likely to become homeowners. Renting is often the first step towards homeownership. Vacancy rates for both rental apartments and owner occupied homes also fell from last year.

Progress has been slow, and while a huge turnaround is not likely around the corner, the future for American home owners should be bright. When President Bush first established National Homeownership Month in 2002 he said “where homeownership flourishes, neighborhoods are more stable, residents are more civic-minded, schools are better, and crime rates decline.” This is still true today.

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Tips for Renting Your Vacation Home

Tips for Renting Your Vacation Home

Renting your second home can provide significant income, and the opportunity to earn rental income plays a part in most decisions to purchase a vacation home. Average vacation home rentals earn nearly $30,000 annually, which is a lot, but renting out your vacation home isn’t always easy. Here are a few tips for making the process as smooth (and lucrative) as possible.

Know the costs.  Know the rental rates, and compare that to your monthly mortgage.  Include estimated costs for marketing, cleaning, repairs, and maintenance.  Make sure it will be a profitable venture, as that’s the point!Know how much time you’re willing to spend.  Be prepared to spend a lot of time managing the property if you don’t want to use a full service management company.  Management companies charge a premium (often 20%), but it saves you a lot of time and headaches.  Understand that if you do it yourself you have marketing, inquiries, booking, and housekeeping to manage.Pay for marketing.  It’s a chunk of money (often upwards of $1000) but it pays in returns. Especially in areas where many vacation homes may be available think about how your home will stand out. Your rental home won’t earn you any income if nobody knows its available!Know your tenants, and be specific about your guidelines.  You may want to set some ground rules, like a minimum age requirement, maximum number of people allowed, and rules regarding pets. Having this clearly laid out will head off concerns here before they arise.  Its also often worth doing a credit and criminal check on your renters.Be prepared to deal with accidents.  Even with the most responsible tenants its best to assume some damage will occur. Requiring security deposits is one way to mitigate this risk. You may also want an insurance policy that covers damage caused by renters.  If your current policy doesn’t cover renter damages, you may want to switch.Create a guest-host dynamic.  Its much more productive then landlord-tenant, and your renters will like you more, give a better review, and treat your home better.

If you’re interested in renting your home for some additional income, you may want to reach out to an attorney to make sure you’re maximizing your return and minimizing your risk!

 Photo courtesy of Wikimedia user Mark Crawley under a Creative Commons Attribution 2.0 Generic License.

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