VRBO’s presence and success is growing dramatically. What is VRBO? VRBO is www.vrbo.com or vacation rentals by owner online. The website is a relatively no frills but highly effective portal for over 90,000 vacation homes available for rent worldwide. In the past 15 years many websites were incubated to link resort property owners and their potential renters. One very successful one started right here in Mammoth. But VRBO appears to heading towards becoming the granddaddy. Many owners and renters utilize more than one site, but VRBO is rising to be the primary choice.
In Mammoth, owners of condos and homes go about offering their properties for rent. The owners pay VRBO a fee to advertise their properties including a photo gallery, extensive description of the features and benefits, rental rates, availability calendars, etc. Potential renters get to view and compare properties and emails and phone calls are often exchanged. Negotiations can occur based on conditions (not likely for prime times.) The potential renters get scrutinized by the property owners (one of the favorite aspects for many owners.) And there is no management cut like with a major reservation company (35% to 55% in most cases.)
It’s not for everybody. But it is becoming increasingly and incredibly popular for owners and renters. Owners typically collect the rents as well as security deposits and a cleaning fee prior to the stay. Many newcomers to the program emulate the style and systems of existing, successful owners (each market, like Mammoth, has different issues.) And a whole new level of industry is evolving and growing in Mammoth to serve the needs of owners and renters. Beyond the basic absentee homeowner services and snow removal, a specialty menu of “concierge” services is available to suit the needs of owners and renters––from daily housekeeping to mints on the pillows to pet services.
Part of the popularity of VRBO is driven by simple economics. Owners of vacation homes are looking for more net cash flow and are willing to be part of the process to earn it. Even negotiating rates during the “off season” periods can produce solid revenue––sometimes renting for weeks or months at a time. The renter is taking advantage of the process and benefiting economically too. The system even allows owners of properties to trade times in their resort properties. And email is a superior enabler in the process.
All of this stirs up the old debate of nightly (transient) rentals in single-family homes here in Mammoth. When the Town incorporated in 1984, the ordinance prohibiting nightly rentals in the single-family neighborhoods was rapidly put in place. This is very unlike many (most) mountain resort communities where freestanding homes are prized rentals and large bed tax generators. (The Town of Mammoth runs on bed tax.) The Town knows all of this is going on and is certainly in a quandary. Policing and enforcing this activity is an enormous task. On the other hand, what municipality doesn’t want tax revenue––especially the kind they don’t have to share with anyone else? And some of the local bureaucrats still remember all the Town staff layoffs and downsizing of the 1990’s.
So can the community continue to miss this economic opportunity? One of the problems is that second homeowners don’t get to vote in local elections. And some owners feel they have “legal” ways around the ordinance. Recently, someone forwarded me a copy of a letter from a law firm in Jacksonville, Florida that was sent to the City Attorney for Sedona, Arizona. Apparently, this law firm has successfully overturned a similar ordinance in the City of Key West and are joining in the fight of a similarly proposed ordinance in Sedona. They claim that they have been successful in proving that these types of ordinances are “constitutionally defective.” They assert that such an ordinance violates the property rights laid out in the Constitution.
The convergence of demand for greater cash flow in Mammoth properties, the desire for increased Town bed tax revenues, and the growing popularity (and usage) of the Internet and websites like VRBO, is likely to bring this debate to a head. There is no doubt the renting consumer loves renting single-family homes. Or maybe the Town will just leave the second-home owning and renting attorneys alone and we’ll just continue to muddle through. Stay tuned. I think this is on the verge of coming to the forefront. And slower economic times tend to drive these sorts of things out of the closet.
13 thoughts on “The VRBO Phenomenon, and Where It May Take Us.”
I have a holiday home and I’ve used VRBO.com for 6 months and have had great success. I have received 12 enquiries and 4 of these have become confirmed bookings. I have also advertised on HomeAway.com but I have not had any enquiries from that website yet.
As well as using these sites, I’ve just created my own website for my holiday home. I used the build-your-own-website service called Rent8 – http://www.rent8.com. It took about 2 hours to add my property details and photos. I had my first enquiry last week!
Nice try Paul. I am inspired by your optimism. I am sure a lot of people in your circle think you are a great guy. And the others avoid you and your circle, like they avoid watching the show Barney the talking Dinasaur. It is as simple as the SUPPLY and DEMAND CURVE…You can not fight it. It has existed since the beginning of time. Know it. It is what determines prices on everything. That means that if there is an extreme over supply of pos condos in Mammoth, and they sold at prices way above rents and incomes. Prices will come down further than when this bubble started. Rents will drop in extreme also, because there will be many owners, who rather than face the music and loose big now, they will continue to bleed and rent out their place for pennies, then give the renter bad vibes because they made a bad decision. Just walk away and foreclose…Stop lying to yourself. Prices aren’t coming back. It is over. Best you can do is cut your losses now. There are going to be so many empty places there two years from now, that you will get a free stay for buying a lift ticket.
This writer above has not had time to study the dynamics of the mammoth real estate market.all real estate markets are local in nature –but can be influenced by other non related markets.Stay tuned –the mammoth market will gain velocity when we see buyers rushing to pay 1400 dollars a square foot.given 3 months you will see the evidence.
As a potential buyer in Mammoth, I will give you an outsider’s perspective…
First of all, any of you hard core negative doom-sayers – you are blind, deaf and stupid – and unfortunately not mute. May seem harsh, but I mean that sincerely. Your posts drive away potential buyers. Your posts further hurt the economy of Mammoth. That is a fact, Jack.
I keep reading headlines that say something like, “Is America Heading to Recession?” Those headlines scare the crap out of consumers and fuel the fire of a recession. You are doing that to your town. You are making matters worse.
If you do some serious reading about this potential recession, and I’m talking read many, many experts opinions – not just one article on yahoo or someplace – you will see that there are many experts who believe this housing slump is nothing like the last one. This housing slump is due to people making poor mortgage decisions – not major unemployment. This market cannot be judged by the past. This market is its own separate entity. That said, there is still no crystal ball as to what will happen, but I assure you none of you can see into the future. And to flip out and panic and spew your panic all over the internet – only causes more panic and contributes to the problem.
If there is a big fat recession like in the 90’s I will tell you what I predict – not know for sure – but predict. I will tell you a conversation I had with my brother during that recession. My brother worked for a large restaurant chain on the East coast. He designed the computer system used in their restaurants. I asked him if the recession was hurting this big restaurant chain. He said no, because the people who could no longer afford to eat out were replaced by the people who ate at more expensive places. So you may lose on the giant behemoth houses, but the more reasonably priced condos, houses still could have life with buyers, if you don’t frighten them off.
Again, that recession in the 90’s was caused by lack of jobs. There are people who still have lots of money. And I PREDICT if the market drops up there in Mammoth a bit more, there will be people out there buying because they know it will go back up. Be grateful for those “vultures.”
Here’s the other thing nobody’s mentioning, it is a fact that there is a housing shortage in LA. And the population is going to double in 30 years. You might think that’s a long way away, but think of the numbers in just ten years. May seem like a long way away, but of yourself ten years ago – seems like yesterday, huh? My point, more and more people drive up housing prices, and it won’t be long until LA is so overcrowded that people will be begging for a second place or a rental away from it all.
It ain’t over for Mammoth people. It’s just a slump that will turn around when all this fear subsides.
Now I have a suggestion for Mammoth to help keep money moving.
Like the post suggests – ALLOW NIGHTLY RENTALS IN HOMES!
There are many financial benefits to doing this. Real estate agents will sell more houses. I as a potential buyer do not want nightly renters, but it is a hell of a lot less scary buying up there if I knew I had that as some sort of income back up – if I needed it.
Now when more real estate is sold, yes agents are making money, and all the people who count on their livelihood from real estate – from construction guys (as many houses are outdated) to assistants in offices… But there are other financial benefits – I assure you many families don’t want to rent condos so they go elsewhere. So when you open up to all those renters – you will create, of course, more money in stores, restaurants, etc. But most importantly IN TAX REVENUE.
And one of the things I suggest you do with that revenue – offer reasonable fixed rate loans to people to update their condos. More income for the town, and if people don’t pay back,the town owns the condo. It’s win-win for the town of Mammoth because…
READ MY NEXT STATEMENT TWICE:
Mammoth does not have a reputation for being a 5 Star resort – and never will – because 90 percent of the condos and townhouses look like trailer homes in Arkansas. I would not stay in a place for free that’s outdated. It’s depressing. Want to rent your empty crappy condo? Make it seem like a quaint cabin in the woods even though it’s one of a hundred units. I guarantee you that’s what people want. And that’s what will rent over all else. And if you want to sell, how times do you need to be told people want to buy “turn-key.”
Town of Mammoth give incentives to people to update.
And also with the housing rental money absolutely spend money on charming up the exterior. Mammoth is dumpy, but there’s so much potential for it not to be.
And to those condo owners afraid of houses taking your renters, there will always be people who don’t want so much house – couples and skiers who just want to ski. Families want to open the door and play in the snow and feel as if they’re in a home away from home.
And you big corporate guys who are afraid of home rentals and condo being updated – I think you know that your high-end condos are shooting for a different client market and again – if the reputation of Mammoth is changed from 70’s dump to charming mountain town – it will only benefit you.
So… that’s my outsiders perspective – something I think some of you need.
The only thing that will save Mammoth is for prices to drop 65% accross the board. This will create a GREAT MIDDLE CLASS. Something that most unselfish people will want. But lets never once or ever believe that greed filled americans want that. You paid 300k for your mammoth condo…You don’t want the guy you buy beer and subs from buying the condo just like yours for 110k. Then have it appreciate at 2% for the next 12 years. You know why, because that guy or gal that makes a sandwich for you is not a human being to you. And if this housing correction causes them to have the same amount of wealth as you, which will finally bring stability and create a huge middle class. Obviously you will be much poorer and they will have a much better quality of life. But you don’t want that…Cause you are special…and they are shit. THIS IS THE WORST HOUSING CRASH SINCE THE DEPRESSION….If you on the wrong side of it, your quality of life will drop…But be happy others will come up..And that will be a much bigger Middle class. YOu are from a ski town. Your image says you should welcome this. Just go hiking. My question to the optimist real estate bloggers is…Why do you think housing prices dropping and the opportunity for people given less than you to live at your quality of life or better is a bad thing? You should be happy that prices will drop atleast 50% and stay there for years. You should be happy that this will even the playing ground and create a huge middle class. (Even if you will lose out bigger than you ever would have imagined) Unless you are the negative ones and the selfish ones. A large middle class is the best thing that can happen. The only thing you are going to do by lying to people into buying now is take aware their opportunity to being in the middle class and forcing them to be poor over the next 30 years due to a bad investment….Think about it that way…The world doesn’t revolve around you because you bought at the peak thinking you were rich and succesful and now that is not the case.
Okay, the last guy who blogged truly is uneducated to what’s going on in the country. Aside from the multi-million dollars homes in Mammoth – all the rest ARE middle class people.
And guy who wants the market to drop 65% why didn’t you put yourself through college and get a good job so you could afford a middle class home? That’s what I did. You didn’t because you probably didn’t want to do the work. Well, it’s not too late. Not everybody has a trust fund that owns in Mammoth. I put myself through school and EARNED my share.
Sorry pal, but the market’s not dropping 65%. Good luck to you.
The Daily Democrat reports from California. “The median price of homes in Yolo County has fallen by 12.35 percent in November compared to the same period in 2006, according to California Association of Realtors report. Yolo County homes are at a median price of $355,000, while in 2006, it was at $405,000.”
This is just the start. All real estate is local, but we did have a national bubble, and we did have a nation wide price decline in housing prices for the first time since the depression. I actually stumbled accross this blog. It makes no difference to me if prices go up 30% in the next year or down another 40% over the next 2 years. I just find it so odd that the mania of unrealistic lies this housing rise has created. I am highly educated in finance and economics (masters). I do find it hard to relate to others who don’t fully understand it. I have zero exposure. It would be nice to see the below middle class be able to catch a break. I think in most of America, just like in prior housing down turns in places like Manhatten, the poor created a true bottom. Now 30 years later, you have individuals who bought one bedroom apts in the 80’s on central park for 70k that are now worth 750k. The apt went for 140k in the late 60’s. Pretty much now, the housing bust is done. Whatever options you had on getting out of your place, disapeared in the last 14 months. Just like everywhere in the U.S…except north carolina and oregon. But those two last of the mohikans will join the rest of the party soon. Being someone who is not exposed to the overall drop everywhere. I will say to anyone thinking of buying to wait. Most likely if you don’t own, it is not because you aren’t educated, as I am extremely…I was given grants and had corporations pay for my education…But, most likely because you didn’t want to make a serious mistake during this euphoria of keeping up with the joneses. I say to those of you who bought. The healthiest thing for you to do is just accept the crash. You can’t stop it. Just move on with your life, realizing you are no longer nearly as wealthy as you thought you were. And you purchase of real estate at the peak years of the bubble will tie you to a debt that keeps you from much flexibility. The only thing you will do is talk someone into making a mistake. And you will look like a liar. The poor people of mammoth will create the bottom of the real estate market. This is a good thing, be happy for them. Invite them over for dinner when they live next door. Just don’t be bitter that you paid twice as much as they did for your place 4 years earlier.
This is the final outcome. I just want this all to be over. I am tired of hearing about it. It is a simple subject to figure out. I am just tired of people lying. Lies ruin peoples lives.
All of your comments have holes. The super pricy places in Mammoth will survive easier. The super rich will not be as affected as the middle class.
Believe it or not, in 2001 many analysts thought California real estate was getting soft and was poised for a modest correction. I know that sounds silly considering the meteoric rise in house prices from 2002 through 2005, but remember by mid-2001 California real estate was into the 5th year of appreciation which began in earnest in 1996. So from historical standards and considering the thumping we took in the early 1990s…..banks, builders and investors were starting to get a little nervous because of slowing sales and falling “affordability” (I’m mostly referring to SoCal).
Well, just as it looked like the market was going stumble, we got hit with 911. I vividly remember talking with bankers and developers who were very concerned that the terrorist attack and accompanying confusion would surely sink what was already a softening market. Obviously that was not the case…why???…….well, what we underestimated was just how very aggressive the Fed would get in quickly slashing interest rates to historical lows. The next surprise (to the upside) was just how absolutely STUPID the financial markets would get in lending money to anyone who could fog a mirror. I think it’s safe to say that the extraordinarily lenient loan programs were what really sent home price to the moon. Yes, historically low interest rates did get us off the launch pad, but it was the “exotic loan programs” that broke the market free from traditional economic benchmarks (like the California Association of Realtors revising their affordability index to reflect the new lending environment…what a joke that turned out to be).
Anyway, now that it appears we’re headed back to traditional lending practices, I got to believe much of the appreciation from 2003 on will eventually evaporate like froth on your favorite ale. So, what does that mean???
Heck, all we have to do it look at Paul’s ReMax web page to find out. He shows the annual median Condo prices for Mammoth from the year 2000 on, which are below along with the link(thank you Paul).
2001: $199k (remember the market was starting to wobble)
So…my bet is $350,000.
I know…some are going to point out that we have lots of new upscale product that will help keep the average price up or that inflation over the past five years alone will require higher pricing (i.e $200k income is the new $100k). Some might even find comfort in that now even the Loon is kicking the dollar’s ass, so foreign investment is sure to help bolster the market. Even with all that, I say nope….markets need to purge and therefore we can count on a spanking.
Besides, if prices do go back down to $350k…that’s only a 37.5% decline from the peak ($560k). Considering the median condo price exploded over 100% from 2000 ($225 to $560)…it ain’t such a big deal, so Cowboy Up (I hate that saying). Wilbur
Wilbur, You are a shephard among sheep. You have everything exactly correct. It is simple right. Why do so many have a hard time understanding? Maybe it is emotional..
Only question I have for you is…America the great consumer is now headed into unchartered territory. What happens when everyone in the country’s biggest asset drops in value? This hasn’t happened since I don’t know when….Wait i do know…it was, let me see, how do I put this….THE DEPRESSION. This should be the biggest worry to owners and renters. Lets not turn this into the dem vs rep. We are all in this together.
Pain Street USA: ’08 housing outlook
The forecast is for a longer, deeper home-price slump than previously expected, with double-digit declines in many markets.
By Les Christie, CNNMoney.com staff writer
December 21 2007: 4:56 PM EST
NEW YORK (CNNMoney.com) — The United States is deep in its worst housing slump since the Great Depression, and according to a new report, it’s not going to get better any time soon.
In a new survey, Moody’s Economy.com says many metro areas will record losses of 20 percent or more during the downturn, with the national median price for single-family homes dropping 13 percent through early 2009. Factoring in discount offers from sellers, the actual price decline would be well over 15 percent.
Eighty of the 381 metro areas covered by the report will record double-digit losses, according to the report. Most of the worst-hit markets are in once high-flying areas, such as California and Florida.
The steep losses were bound to arrive sometime. Throughout the housing slump, which began in the summer of 2006, experts kept expecting prices to tumble, but it wasn’t until recently that they dropped substantially, according to Mark Zandi, chief economist for Moody’s Economy.com.
“There has been a sea change in seller psychology since the subprime shock this summer,” he said. “Sellers now realize they have to drop their prices to make a sale and prices are coming down very rapidly in some markets.”
One such place is Punta Gorda, Fla. In Moody’s outlook, prices there will undergo the steepest correction of any U.S. market. From their peak during the first three months of 2006, to their bottom, forecast for the second quarter of 2009, prices will decline 35.3 percent. That’s in nominal dollars; adjusted for inflation, the loss will be even greater.
who is Rusty?
Rusty needs to learn his place, this is not a democrcy. He better step in line before he loses his job. Whatever job he currently happens to be doing at this moment.
There are some trust-funders (trustafarians as they’re known) in the business. They keep plodding along to keep up the appearance of employment to insure good graces from their benefactors or to conceal their real source of financial well-being. Their real motivation is typically to keep up the pretend.
Not all in Mammoth are Trustafari, who got their money and security from their stepfather’s business…YOU BASTARD!!
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