You vacation at the beach and would love to make it your home when you retire? Did you know you can purchase a retirement home with IRA funds?
The downside is that you can’t live in it until after age 59 ½ , but in the meantime, vacation rental guests can be helping you buy your dream home.
Allow a broker experienced in both real estate sales and vacation rental management help you decide the best property for you. The first step is to transfer your regular or Roth IRA into a self-directed IRA account. It will be overseen by a custodian such as Fiserv or PENSCO Trust Co. With the IRA funds, you can then make a down payment on your dream retirement home. You need to be able to pay all expenses for the retirement home out of the income. With the exception of legal fees, you are not allowed to use non-IRA funds to pay expenses of the home. You can use other IRA funds to pay expenses that come up.
You, your children, your parents, spouse, grand-children and their spouses cannot stay in the home, with or without paying rent. Most other relatives can rent it, though.
You are not allowed to manage the property yourself, so a property management company will be needed.
“It’s a good way to diversify your investments,” says Will Holland, president of San Diego Sunset Vacation Rentals and Real Estate. “Over the long term, real estate always out-performs the stock market. In beach areas, where the land to build is limited, the demand will only go higher.”
by Suzanne M. Perez
Do you love your San Diego vacations and long for a second home at the beach? Buy that second home and let it help pay for itself as a vacation rental, suggests Will Holland, president of San Diego Sunset Vacation Rentals and Real Estate.
“Beach area homes are in high demand, so they don’t get hit with the down side of the real estate market to the degree other segments of the market are affected,” says Holland, who bought his first beach area home in 1999.
Vacation rental owner Pam deDomenico says she invested in a beach property in order to provide retirement income. “It was for the income, plus to have a great vacation spot to share with the children and grandchildren,” she explains. “It’s only a good investment if you consider the value of personal use and property appreciation,” she adds.
Jim Fox and his wife Marcie enjoy getting away from their Washington home in the winter to visit family in San Diego. “A vacation rental fits right in,” he says. “We have a place to stay when we visit; it’s an investment with equity growth, and the rental income makes the payments.”
You need to work with a broker who is experienced with both real estate sales and vacation rental management so you can understand the ins and outs of vacation rental ownership. “Look at your goals, both short-term and long-term,” Holland advises. If your goal is to have positive cash flow immediately, a large down payment may be necessary or some elbow grease with a fixer-upper. If you can cover a negative cash flow you can buy more with less down, knowing that renters are helping you build equity and pay for the vacation home that you can use whenever you want.“
Location, location, location—you have to have a desirable location,” advises vacation rental owner Sara Siebrand. Her property is 20 minutes from her home and she loves having a place at the beach. “It’s a labor of love,” she explains. “Having a house at the beach is wonderful. It’s rented out most of the time, but when we are there, we are working on it and having fun at the beach.”
Siebrand said her property is mainly an investment, but is also a hobby. “It’s fun,” she says. “We like to make it a total ocean experience so it’s decorated all nautical. We have a guest book and we love it when people write what they liked and what they did while they stayed here.”
Beach area properties range in price, but good bargains and fixer-uppers are still to be found. Holland lived in his first purchase for a year while he renovated it. It has provided a positive cash flow ever since.
If extreme make-overs aren’t for you, there are plenty of condos and homes to choose from that are ready for occupancy. “It’s really the broker’s job to help you sort out your priorities then offer you options,” Holland says. “A good broker can help you estimate the costs of maintaining your rental and the potential income.”
Beach front and bay front properties are most desirable and will bring in the highest rents. “You can expect to pay less for a home or condo a little farther from the water, but it will also bring in lower rents.” In general, you need to decide what your goals are and what you can afford,” he says.
Income on a vacation rental is taxable, but you can claim deductions for many of the expenses, including management fees, advertising, maintenance, depreciation, as well as interest and property taxes. Depending on how much of the time you and/or your family members use the home, the rules for deducting expenses change. “Be sure to talk with your tax professional about the rules regarding second homes and vacation rentals,” Holland advises. “Tax codes and constantly changing and only a tax professional can keep you fully informed."
One piece of advice Siebrand offers, is “you have to a have good management company.”
“The key to success with a vacation rental is having a good management group handle it,” Fox agrees. “When we bought it in 2002 we were with another management company and it wasn’t doing anything.” Fox later signed up with San Diego Sunset Vacation Rentals and saw his rental income grow.
Holland agrees that it is important to have a qualified management company, unless you want to make your vacation rental your full time job. “When I was ready to make my beach area home a vacation rental, I looked for a management company that would market it the way I thought it deserved,” Holland explains. “When I couldn’t find one, I decided to market it myself. It quickly became a full-time job, then a business.” San Diego Sunset now manages nearly 70 properties and offers full real estate services.
There is a lot more involved in marketing, maintaining and managing a vacation rental than a long term rental, Holland says. The money you pay to a professional management company will come back to you many times over in increased tenancy, fewer headaches and hours saved doing bookkeeping. “Unless you really want to be the one they call when the toilet is stopped up or the barbecue won’t light, get a management firm.”
Not all management companies are alike. Be sure to ask how they market properties; what services they provide to owners and guests; what are their office hours; how accessible are they to owners and/or guests; how do they ensure guests will return year-after-year?
There is a lot of help and solid advice available for people longing to own a beach area home, says Holland. “If you really want a beach vacation home, don’t assume it’s out of reach,” advises Holland. “Go for your dream.”
by Suzanne M. Perez
SAN DIEGO—"Have a Blast" in San Diego with the discount card recently introduced by San Diego Sunset Vacation Rentals and Mission Beach Magazine. The new discount program provides area visitors with discounts and free services at 17 Mission Beach and Pacific Beach area businesses, San Diego Sunset President Will Holland announced this week.
“The ‘Have A Blast Pass’ program is a cooperative effort to help promote area businesses and to provide added value to San Diego Sunset Vacation Rental guests,” Holland explained. “It’s a win-win proposition. Additional business is generated for partners in the program, and vacationers are provided discounts and/or free services.”
Each guest checking into any of the 50-plus San Diego Sunset Vacation Rentals receives a "Have A Blast Pass" along with a list of participating businesses and what they offer. A listing of "Have A Blast" partners and the discounts or free services they offer is also published in Mission Beach Magazine, according to Holland.
The pass offers discounts on surfing lessons, pizza, recreational rentals, beachwear and sandals, jewelry and a long list of other goods or services. For example, Segway of Pacific Beach will honor the "Have A Blast Pass" with a 10 percent discount off any two-hour Segway rental. “Where You Want to Be Tours,” which was recently featured in Mission Beach Magazine, offers $3 off walking or bike tours or $100 off a scavenger hunt.
“If you just want to save some money on dinner, use the pass for $5 off dinner at Guava Beach Bar & Grill,” advises Holland, “or order Pizza at Rosaria Pizza and get a 10 percent discount.”
If what you are really looking for is a beauty treatment, Mission Hair & Nails offers a 10 percent discount off a manicure and pedicure, then cross the street for a 10 percent discount off a pair of sandals. You won’t be done until you head to Mission Beach Cleaners and Tanning for a free tanning session with any fluff and fold service. Top the day off with a jewelry purchase at 10 percent off at nearby Chris’ Jewelry.
“The ‘Have A Blast Pass’ also allows San Diego Sunset guests unlimited free access to the Powerhouse Gym in the Promenade Shopping Center, and free use of San Diego Sunset’s business center, free Wi-Fi, as well as free bike, boogey board and horseshoe rentals,” Holland explained.
“The Pass has been well-received and well-used,” he said. “It’s been a good partnership among a group of area businesses that benefits them and benefits our guests.”
For more information about becoming a “Have A Blast Pass” partner, Holland encourages businesses to contact him at email@example.com. There is no cost to participate in the program, just a commitment to offer great service and a discount or free service to San Diego Sunset guests, he said.
By Suzanne M. Perez
SAN DIEGO—In an effort to provide a resource for Mission Beach and Pacific Beach vacationers, and promote the Mission Beach and Pacific Beach areas as a vacation destination, San Diego Sunset Vacation Rentals has begun publication of Mission Beach Magazine, announced San Diego Sunset President Will Holland.
“We wanted to accomplish two goals – draw vacationers to the Mission Beach and Pacific Beach areas, and to offer them a guide of things to do while they are here,” said Holland.
The third issue recently hit the stands, with 10,000 copies being distributed in a variety of ways. Distribution stands are placed throughout the area and partner business also distribute the magazine, according to Holland. “Each guest of San Diego Sunset Vacation Rentals gets a copy when they check in,” he added.
The Spring/Summer 06 issue of Mission Beach Magazine includes articles about area golf courses, Balboa Park, San Diego Zoo and Mission Trails Regional Park. Articles also give tourists information on charter fishing trips and a San Diego tour company.
“The map inside each is a great resource for visitors because it shows a detailed map of the Mission Beach and Pacific Beach areas,” Holland said. “The map also shows the popular bike path that takes you around Mission Bay, surf spots, grocery stores and trolley stops.”
The magazine also pictures and describes the 50-plus vacation rentals managed by San Diego Sunset Vacation Rentals. “The same information is available on San Diego Sunset Vacation Rentals web site, www.SanDiegoSunset.com, but a lot of people like to page through the magazine and read about the rentals, rather than surf the net,” Holland said.
Current and past issues of Mission Beach Magazine can also be viewed online at www.missionbeachmagazine.com. “As we grow as a business, we want to have the magazine grow also,” Holland said. “We really want to highlight the great vacation lifestyles of the area with supreme photography and informative stories.”
Holland encourages anyone who would like a copy of the magazine, or is interested in advertising, to contact him at firstname.lastname@example.org. “We have had a lot of very positive feedback on the magazine from both vacationers and area businesses,” he said.
by Suzanne M. Perez
SAN DIEGO—Have you ever been on vacation and had some immediate business to tend to, only to find out that your hotel charges an exorbitant price to use its business center? It happened to San Diego Sunset Vacation Rentals President Will Holland, which is why he has a business center that is free for his guests.
“When people go on vacation, they can’t always leave their work at home,” he said. “They need to be able to log onto the internet, link into a wireless network, and send faxes. They shouldn’t have to pay extra for those simple services.”
As an innovator in the local vacation rental business, Holland saw a need and decided to fill it. “When my wife and I started looking around for a vacation rental company to handle our own vacation rental a few years ago, we weren’t happy with what we found,” he explained. That’s why he and is wife, Ikuko, started their own. “We saw companies that charged both the owners and the guests special fees for one thing or another. They didn’t offer basic needs like a business center and internet access. They didn’t even offer free nursery rentals, much less free bicycle and boogie board rentals.”
Holland had a vision of a vacation rental company that would be full service with the emphasis on the “service.” He is proud to offer his guests free use of a business center, as well as free recreation and nursery rentals. He refuses to charge extra for the services that he says should be included in a vacation rental stay, like cleaning fees, reservation fees and damage waivers. “What’s this about charging to make a reservation?” he mused. “Isn’t that what the company is already getting paid to do? It’s not a good deal if you are getting charged all kinds of special fees and it’s even a worse deal if they can’t provide you with free Wi-Fi and a free space to take care of business.”
A vacation rental can be the most economical way to take a vacation, but watch out for those extra charges, he warns, and make sure you will be provided what you need, like access to computers, the internet, faxing and printing capabilities.
Guests at the 50-plus Mission Beach and Pacific Beach area vacation rentals Holland manages, also get free access to a fitness center. “We want to be the company that provides vacationers more than a rental unit, we want to provide a vacation experience,” Holland said.
by Suzanne M. Perez