Recession concerns

Hi Teena

Perhaps I'm missing something but I don't fully understand your concerns here. You say that you will have peace of mind by paying the full amount upfront but that will give you worries about whether the property you want to rent will still be there in 12 months time. I think the advice that you just pay a deposit now and keep your money safe until it's time to pay the balance makes a lot of sense. As far as the issue of losing your deposit is concerned, I'd suggest negotiating with the owner on that point or perhaps taking out insurance.

Hi Teena

Here's a slightly different spin on this for you. Once you have a shortlist of villas for your trip, why not pose this very question directly to each of the villa owners. No villa owner (at least none that I know) would ever consider taking offence at such a question and as far as I can think every villa owner that I do know would be very happy with the opportunity to put your mind at ease. You might get some quite entertaining replies too. [msnsmile2]

As a pointer from someone who knows the villa business reasonably well, I would also disagree with Robert's post (above). The 'some income is better than no imcome' is a phrase I've heard a lot over the past few years. Many of the people I've heard it from are no longer in business. The simple fact of running any business (and a villa is a business) is that if you charge less than what it costs you, you go bust. It happens to banks. It happened to Enron. It happens to restaurants every day. And it happens to villas. And any villa owner who tells you that they are not running a business, and that they are only looking to cover costs, or are only looking for some income ... well ... IMHO, they're already well down that road.

<blockquote id="quote" class="ffs">quote:With respect Robert, if you don't rent out your home (condo?) then there are not inconsiderable additional expenses involved in doing so of which you may not be aware. So your 'bonus' (and more) would be a necessary requirement. If you were to rent out your home, then you would not be able to run it on the same sum as you do currently.

Unless you subsidise your guests' stays, then charging a realistic rent is the only way to keep it in tip top condition for your rental guests. Your saying that a higher rental owner is more vulnerable is therefore misguided. A lower rental owner will not have funds to keep the home up to date nor pay the increased bills that multiple occupancy brings - unless they use their own money as a subsidy - a far more vulnerable position IMO.[/quote]Blott,

I was fully aware of additional expenses involved in renting, even before reading the hundreds of posts on this and other forums on the subject.

You have moved the discussion away from the point I was answering namely that a low rental is no indication that the owner is likely to 'cut and run'.

However to answer the point you raised - the issue is what is a 'realistic rent'.

I have been at pains to point out in earlier threads that many people are prepared to rent out their units at uneconomic rents. However that is very different from what they might consider to be a realistic rent.

If they bought years ago at a fraction of the prices paid later, have no mortgage, and are prepared to subsidise their 'place in the sun' then they can charge a low rent.

I cannot see the logic that determines that these owners, who are not under financial pressure, are more likely to 'cut and run'.

The big problems in Florida housing have come from those who have over-stretched themselves.

I am on the Board of my Condo association and see all the finances. We have had 3 owners all with mortgages of well over $500,000 who have just walked away from the property and taken a big loss! With the $10,000+ property tax bill, condo fees etc - that is real financial pressure!

<blockquote id="quote" class="ffs">quote:Originally posted by Katys Grandad
Hi Teena

Perhaps I'm missing something but I don't fully understand your concerns here. You say that you will have peace of mind by paying the full amount upfront but that will give you worries about whether the property you want to rent will still be there in 12 months time.
[/quote]

I interpreted that as her really saying that she would like to pay for the villa in full so that she knows that this is paid and can concentrate on saving up and budgeting for other aspects of her holiday.

Lots of holidaymakers do this. It may not make much financial sense but psychologically it is good to know that certain things are paid in full and you don't need to worry about them.

The key question would appear to be when she asks if her payment is protected as it would be if she booked through other avenues.

<blockquote id="quote" class="ffs">quote:As a pointer from someone who knows the villa business reasonably well, I would also disagree with Robert's post (above). The 'some income is better than no imcome' is a phrase I've heard a lot over the past few years. Many of the people I've heard it from are no longer in business. The simple fact of running any business (and a villa is a business) is that if you charge less than what it costs you, you go bust. It happens to banks. It happened to Enron. It happens to restaurants every day. And it happens to villas. And any villa owner who tells you that they are not running a business, and that they are only looking to cover costs, or are only looking for some income ... well ... IMHO, they're already well down that road.[/quote]Snapper,
We go through this time and time again!

Firstly you run your villa as a business, others don't!

Secondly,
Take villa owner A with no mortgage and sitting on a capital gain on his property.

Villa owner B with a $300,000k US$ mortgage and is sitting on a large capital loss in property value.

It is a lot easier to survive as a business if your overheads(mortgage in this case) are lower.

Villa owner A is in a position to undercut Villa owner B in rental.

I raised the issue about my property simply to demonstrate that(thankfully) I am not under financial pressure. i.e. I can, and do, run my property without renting.

I could rent my condo for an uneconomic rent and easily cover my additional expenses, plus a profit to defray my own costs.

Would that make me more likely 'cut and run'?

Robert,

"IMO on the risk of an owner ‘cutting and running’ there are simply no grounds to assume there is any correlation between high rental and low rental."

Agree to disagree:D

I don't have the figures to hand but I believe there was a huge increase in villa ownership and rental properties as prices increased which to me indicates there are a huge numbers of owners bought expensive homes and who need the rent. I believe the majority need to rent out.

The original specific question was answered with ideas about putting the balance in deposit accounts etc. The poster has not yet chosen, obviously is concerned about foreclosures and "may' wish to have some input into why owners may "cut and run" as you say.

If all the properties considered are in the same sort of price bracket then a much cheaper one would worry me. Why take the risk.

Also I don't want this thread to turn into another anti owner/ owners always post the same thing argument so just DM me.

Andrew

I think the original poster has a valid point that she wanted addressing.

She wants to know if her booking is protected in these tough times.

I don't have a home that i rent, so can be independant as i do know the rental market.

Firstly all the owners point to the fact that they are verified regulary (6 months) by this site. What does this actually mean to the potential renter? Does it mean that his site will guarantee bookings and deposits.....no. You may not want to admit this, but other than confirming the house is there and is owned by x owner, what does it mean?

As for Andrew's logic that the home that charges more is a better prospect, this is ridiculous!

Much like Robert quotes, the home that has higher mortgage costs will probably be the first to go if it doesn't get bookings for x amount of weeks. So i fail to see Andrew's logic other than to justify charging higher prices.

I agree that some owners go the extra mile and spend lots on there home and may or may not charge more for the priviledge, but then again the owner in dire straits who can't make ends meet and never invests in the home may also be charging higher rates just because they are greedy.

If i go to buy a new TV, i don't go to the shop with the most expensive, i shop around for what i want and make an educated decision on what i want to spend for the features/quality offered.

Back to the original point, the site try's its best to convince possible renters that they are safe booking on here, but there is no ABTA or ATOL connection and no guarantee's by the site. So the renter has to make a leap of faith with their money.
Before you all comeback, yes i know the leap of faith a villa owner also makes, but this is about the question from a renter.

The best advice has ben given, make your choice, pay the deposit and put the rest away somewhere safe. Then take out insurance in case the worst happens.

As for all the other stuff, its just smoke and mirrors.

I have no axe to grind, infact i look after a home for an owner on here. I just feel the plain facts should be presented.

As to the suggestion of just paying a deposit and putting the rest in an interest account... the villa owners I know are less likely to "cut and run" than some of the banks at the moment (and more honest) !!!
[msnwink]

Three companies that provided travel from UK to Florida - BA, Virgin and TCD. One (TCD) advertised lower prices than the others. Which one went out of business first, causing difficulties to customers who had booked with them?

Hi Tina,

You have asked a very sensible question and as a villa owner who rents their properties it doesn’t upset me at all.

IMHO when renting a villa you should proceed with the same caution you would when purchasing anything. First book your villa from a reputable site like the ones here. Having a villa verified on these sites means the villa does actually exist and belongs to the person advertising it. Unfortunately there have been scams where guests have arrived to find the villa they were expecting wasn’t the one at the address given. Or they were unable to gain entry as the scammer had used the details of a real property without the owner knowing anything about it. With the verification system this can't happen if you book through here.

If you pay the deposit and then the balance when due, preferably on a credit card you will be further protected. You should also take out travel insurance checking that the small print covers you should the villa you booked not be available for your stay.

Finally in life you generally get what you pay for and villas are no exception. There is no official rating system similar to a hotel star rating, so if you want a top of the range villa you should be prepared to pay a reasonable amount for it. After all you wouldn’t reasonably expect a room at the Hilton at Motel 8 rates! The rental market in Florida is extremely competitive and offers incredible value. Personally as an owner I would rather have fewer rentals at a fair rate than pack my home back to back with guests paying peanuts just to make ends meet. That way I am able to keep my home in tip top condition and I can keep upgrading it.

Have fun choosing the home for your stay, by using your instincts and common sense I’m sure you won’t have a problem and will have an amazing holiday.