Strategy Two: Rent It Out
Wish list: Lake views from a furnished property.
List price: $428,000.
Purchase price: $425,000.
Rial and Sandra Coleman had always hoped to buy a vacation home they could share with their family. They envisioned a resort within easy driving distance of their home in Fort Washington. When they visited Western Maryland’s Deep Creek Lake for the first time to attend a family reunion in 2006, they were hooked. “Even the drive to the lake was gorgeous,” says Sandra of the three-hour trip. “Once we realized that it is a four-season resort area, we decided to start looking.”
After three trips to the lake, the couple found Sunplace, a condominium community with 325 feet of common lake frontage, views of the water and mountains, and a western exposure that allows for prime sunset watching. They settled on a three-level, 1,500-square-foot unit and signed the dotted line along with Sandra’s parents.
After a few visits, the Colemans realized the potential for renting out the condo when it wasn’t in use. “It was in a great location with gorgeous views, easy lake access, a pool—and we knew it could be rented all year long,” says Sandra. They hired a management company to oversee the rental arrangements. Within a few months, they had their first customer.
“The key to renting success is to find a home with all the bells and whistles in an area that can attract year-round renters,” says Beverly Everett, an agent with Coldwell Banker Deep Creek Realty. “But it takes a while to build up that pool of repeat renters.” Between management-company commissions—usually around 20 percent—and a competitive rental market, buyers hoping to cover their mortgage costs completely might find themselves in the red.
“We’re definitely not able to cover all of our costs,” says Sandra, whose condo is rented about 20 weeks a year. “And we do have to schedule our time around other people’s vacations. But we are able to cover the unexpected expenses of owning a second home, and it surely takes the sting out of the mortgage payment.”
Strategy Three: Consider a Short Sale
Wish list: A single-family home with room for extended family, within biking distance of the beach.
Budget: $400,000 to high $600,000s.
List price: $799,000.
Purchase price: $685,000.
With a busy orthodontics practice and three children at home, Anthony and Mina Anyadike wanted a second place within a few hours of their home in Ellicott City. “We have such a small window of time to travel,” says Mina. “We thought if we had a place in Delaware—just two or three hours away—we’d be able to get there on the weekends.”
Low interest rates, competitive prices, and the chance of a good deal convinced them to begin house-hunting in April 2010. “We were intrigued by the idea of a short sale,” says Mina. “We weren’t in a huge hurry, and we thought we’d be able to get a nice house in an ideal location that we wouldn’t otherwise be able to afford.”
But after months of searching in Rehoboth Beach and one failed attempt to buy a short sale last year, the Anyadikes were ready to give up. “The drawback of the short sale is that it’s really a gamble—you never know if your offer is going to be accepted,” says Kathy Douglass, the couple’s real-estate agent. “You’ve really got to be patient and have the luxury of time.”
Last March, the Anyadikes offered $685,000 on a home in Rehoboth’s Canal Corkran subdivision that was listed for $799,000. “The house was perfect—an open floor plan, in great condition, and within walking distance to the beach, shops, and restaurants,” says Mina.
In October, their offer was accepted. “They really did get a great buy,” says Douglass. “Homes in Canal Corkran are selling for up to $1.7 million.” The Anyadikes feel they made a solid investment and expect to retire to their home in ten years, after their youngest child goes to college. Says Mina: “If we had waited ten years, we wouldn’t have been able to buy a home like this.”
This article appears in the February 2012 issue of The Washingtonian.