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Do Vacation Home Rentals Beat Hotel Rooms?
866 Views :: 15 Comments :: :: South Padre Island, Second Homes
Do Vacation Home Rentals Beat Hotel Rooms?

The folks at vacation home rental site homeaway.com think so, here are some of the thoughts, including more square footage, overall lower pricing, roomier floor plans, laundry, cost of meals and extras like tv's,dvd players, and movies.

Vacations are always something to look forward to. The obvious choice for lodging 15 a hotel. They're fairly easy to find and are usually in the heart of most travel destinations. Choice in hotels can eat away at a budget. One might encounter hidden fees, costs for in-room movies, and of course the mini-bar.

A vacation home rental is a great option to save money. With amenities like full kitchens, one can save on eating out, too. Not to mention there is more room, which means more people can come along and split the cost. If planning a trip, consider pros and cons of rental homes and then a hotel, and see which one will be better for your budget.




It's a best beach bargain bonanza on South Padre Island, call us for the deals you don't see!
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Tara-Nicholle Nelson @ Friday, March 25, 2011 9:55 PM
Five Real Estate Tips from Warren Buffett

Warren Buffett, the Billionaire Oracle of Omaha is one of the most successful investor in the world.

Here's a sampling of real estate tips from Buffett, right, the third richest human being on the planet.

1. The Basic Premise of Home Ownership -- That Homes Increase In Value Over Time -- Is Sound

Last spring, the Congressional Financial Crisis Inquiry Commission called Buffett in for an interview. He was asked to explain some of his bubble-era investment decisions, as well as to give his take on what in the heck had happened to the economy. In the process, Buffett expressed his belief that the housing bubble was inflated by an irrational, widespread belief that home prices would only ever go up -- an extreme corruption of a generally valid premise. "It's a totally sound premise that houses will become worth more over time because the dollar becomes worth less," Buffett declared.

The sound premise, Buffett explained, got distorted and eventually caused the housing crisis when Americans started buying multiple homes to cash in on what they assumed was guaranteed appreciation, taking out "liar's loans," buying homes with no down payment and with unaffordable monthly payments -- and lenders let them -- all because of the assumption that prices could never go down.

Clearly, this assumption was wrong. As Buffett said in an earlier shareholder's letter: "A pin lies in wait for every bubble."

2. Buy Low (And Now Would Be a Good Time for That)

Buffett writes a letter to Berkshire Hathaway's shareholders every year that is chock-full of his review of the company's fortunes (literally) over the preceding year, his analysis of the stock market and the economy in general, and his smart, plain English tips on life and money and on life.

In last month's annual shareholder letter, Buffett addressed the industry-leading 2010 performance of one of his company's holdings, which sells and finances manufactured homes. During that discussion, the money maven declared that now would be a sensible time to buy a home, in light of record-high affordability: "Home ownership makes sense for most Americans, particularly at today's lower prices and bargain interest rates."

And Buffett didn't stop there. He pointed out his own tenure as a homeowner as an example. "All things considered, the third-best investment I ever made was the purchase of my home, though I would have made far more money had I instead rented and used the purchase money to buy stocks," he wrote. Then, to clarify for the readers who'd want to know what numbers one and two were, Buffett elaborated: "The two best investments were wedding rings."

3. But Don't Wait Too Long To Take Advantage of Low Prices

Buffett wrote a 2008 Op-Ed in the New York Times, explaining that buying while prices are low is stressful, because economic markets are volatile and impossible to predict in the short term, even for him. So, when conditions make an investment -- in stocks or in a home -- particularly advantageous, Buffett says not to hesitate too long. Painting a vivid verbal image to illustrate the likelihood that market prices "will move higher, perhaps substantially so, well before either sentiment or the economy turns up," Buffett warned: "if you wait for the robins, Spring will be over."

4. The Smart Way to Own a Home Has Three Elements

Those elements are: fixed mortgage, affordable payments and long-term hold. Detailing why his manufactured housing holding has done so much better than the rest of the real estate market, Buffett pointed out that "[o]ur approach was simply to get a meaningful down-payment and gear fixed monthly payments to a sensible percentage of income. This policy kept [the company] solvent and also kept buyers in their homes." And that was the ultimate difference between smart home-buying and the home-buying that led to the real estate bubble and the foreclosure crisis.

"If home buyers throughout the country had behaved like our buyers, America would not have had the crisis that it did."

In the stock world, Buffett has been quoted as advising investors to "only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." Well known for practicing what he preaches, we can presume a long-term hold strategy would also be an integral part of Buffett's advisory to homeowners, too. Despite his net worth of somewhere around $50 billion, according to the latest Forbes tally, Buffett still lives in the 5-bedroom Nebraska home he bought 52 years ago for $31,500.

5. Buying Your "Dream Home" May Lead to Nightmares

In the 2010 shareholder letter, after he pointed out the right way to own a home, Buffett went on to caution Americans against the wrong way. When dream homes are bought for ever-escalating prices, using rapidly adjusting mortgage payments and unsustainable monthly costs vis-a-vis the homeowners' income, the dream can go bad quickly. Buffett warned, "a house can be a nightmare if the buyer's eyes are bigger than his wallet and if a lender -- often protected by a government guarantee -- facilitates his fantasy. Our country's social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford."
Tony Wong - Toronto Star @ Friday, March 25, 2011 9:58 PM
Buying a vacation home: 10 things to know

The first question to ask when buying a vacation property is how you plan to use it.

Big gatherings, or quiet getaways?

Buying a vacation property is one of the most rewarding things you can do. But it can also be a complex and stressful experience with pitfalls that are different from those you encounter when you buy a house.

Here are 10 things you need to know:

1. Why do I want it?
2. Keep your emotions in check
3. Where do I buy?
4. Consider pooling resources
5. Beware of tax implications
6. Location is key
7. Condo vs house
8. Check out the neighborhood
9. Look for hidden costs
10. Cheap doesn’t always mean bargain
Homeaway.com @ Friday, March 25, 2011 10:02 PM
Vacation Rentals are a great alternative to hotels

given the benefits of space, privacy, and added amenities. Vacation rentals generally offer additional space for less cost per night versus the typical hotel room. Amenities offered by vacation rentals often include washers and dryers in the rental, kitchens so you can save money by not having to eat at restaurants, DVD players, games and even private pools in some rentals.
condo renter @ Wednesday, March 30, 2011 6:19 AM
If you're just looking for a nice vacation for a week or two out of the year, or even just a few days, then renting a South Padre condo makes the best sense. The strange thing about this market is that many owners rent their condos for significantly less than their actual total costs. How can that be? Here's some possible reasons I have come up with:

- When some owners originally purchased their condo they had dreams of spending significantly more time than was realistic, and that long trip to the island becomes more noticeable year after year. Simply put, the more time you spend on the island, the more likely the novelty is to wear off.

- Many owners don't realize how much it really costs to maintain an island property until after they've experienced it for a couple years. The first time a new owner gets hit with an unexpected "special assessment" on their property it really causes them to rethink any previous objections they had to renting.

- A lot of people will buy island property in midlife, hoping to eventually retire here. In the meantime they rent it out, regardless of how much they're actually losing, because they maintain that long term retirement goal.

- If you're an owner who is looking to sell, but can't sell in this unusually slow market, then getting some rental income while you wait for a buyer helps pay the bills. It is however harder to sell a condo that is being rented than one which is vacant, so renting is a difficult decision often made by the most financially distressed property owners. (and right now there are a lot of them)

- I think some middle class people buy island properties with the full intention to put them into some kind of rental pool, to help pay the mortgage. They're content with just grabbing a week or two during gaps in the rental schedule. Many of these people have been suckered into believing that long term price appreciation will be their savior. There certainly have been prosperous periods in history when this strategy has worked, but during the past few years of falling property values, this strategy has seriously backfired.

- Condo rentals compete in the same market as hotels. Keep in mind that hotels are serious businesses, and most have to answer to their profit seeking owners and shareholders on a regular basis. Hotels can't survive for very long without making a profit, but many individual property owners can. In other words if you're just looking for a short term vacation, it's more likely you're going to get the best deal from one of the many distressed condo owners on this island, than you are a big "strictly business" hotel chain.

One thing I've noticed is that a lot of individual condo owners try to "personalize" their condos. For example, some will spend extra money on a premium mattress to earn repeat business, especially to encourage winter Texans who often rent by the month. Other individual owners will spend enormous amounts of money to refurbish their condos with extras, such as gold faucets & shower stalls, premium floors, washer & dryer, granite counter tops, etc. (You won't find that in a budget hotel.) But, the thing which always makes the biggest impression on me in some of these rental condos is the "guest log". This is typically a black book on the table which asks renters to identify themselves, what they thought about the property, nice local places they enjoyed visiting, etc. Some owners will even go so far as to leave a framed picture of themselves on the table, identifying exactly who they are and their primary residence. (up north in Michigan or some place cold) I think there are a few reasons for this type of "personalization". First, I think the owners are DARN curious as to who has been staying in THEIR property. I can sense that many of these people don't feel completely comfortable renting their properties to perfect strangers, and have been forced into the rental market. Another possible reason is that they're simply trying to encourage you to take care of the place, by making you realize that a real down-to-earth person owns it, not some big impersonal corporation. I'm sure some owners also hope to gain insight into any problems that exist, such as an uncomfortable bed or problems with the outside maintenance, property management, etc. And, of course, many owners do spend some time in their own properties, so buying that big nice mattress may also have something to do with their own self interest.

I always enjoy the stickers on the patio doors of rental condos that warn you the AC is going to break if you leave the patio doors open. The truth is that you will break the electric bill of the owner if you leave that patio door open. As a side note, most short term rental agencies expect those AC units to run 24/7, even if the condo is not currently occupied. They want visitors to feel comfortably cool when they first enter the unit, with no stale misty smell, and overall to feel as comfortable as possible during their brief stays. The sad part is that keeping that AC unit on all the time cost big bucks, and those outdoor compressor units don't last long in the salt air.

Another reason to consider renting is that if you make an effort to rent in a different place every year, it gives you fantastic personal insight into other parts of the island which you would not otherwise experience. There is a certain comfort associated with coming back to the same condo every year, but renting in different parts of the island helps make sure that if you do eventually decide to settle down and buy a specific condo, you're already pretty sure that this is the area of the island which is best suited for you.

It's only fair to point out that sometimes it does make more sense to buy than rent. This happens during those relatively brief periods of time when the economy is overheated, and there is a lot of money chasing a limited supply of properties. However, trying to "time the market" is a serious challenge which has burned the most experienced investors. (Just look at the Sapphire disaster) The truth is that property values need to be rising very fast to later compensate for all of your annual expenses, and such market conditions don't often last for more than a couple years.

I think the bottom line is that for whatever reason, vacation condo rentals offer a fantastic deal for anybody who wants to spend a little quality time exploring all the island has to offer. From a pure economic standpoint, it's usually much better than buying, and a lot less hassle. When you're ready to leave the island, you just turn in your keys, and that's it. Nothing to worry about until you're ready to come back next year. (except for getting your security deposit back, which is a problem you won't have in most hotels! Fortunately that isn't usually a problem when dealing with reputable rental agencies.)
Two Faced Builder @ Tuesday, April 05, 2011 4:03 PM
Don't look now, but a major homebuilder has announced they are going to buy foreclosures and rent them out!

http://www.ajc.com/business/beazer-homes-buying-homes-897629.html

I guess that shouldn't be too much of a surprise, given that Beazer just lost $48M in their last quarter. (Builder's have to survive too.)

Lennar's approach to the housing disaster is however quite different. Instead of buying foreclosures, they're actually discouraging prospective buyers from even looking at them:

http://www.lennar.com/Buy-A-Home/New-Homes-Vs-Foreclosed

At the same time Lennar is now investing in distressed mortagages through their Rialto Capital Advisors division.

http://www.worldpropertychannel.com/us-markets/residential-real-estate-1/real-estate-news-lennar-corporation-fdic-loan-sales-bank-reo-properties-rialto-capital-advisors-stuart-miller-jeffrey-krasnoff-2009.php

To me this smells like we may be nearing the market bottom, but many experts would strongly disagree with me. Interest rates are definitely going up, credit is hard to obtain, and inventories are near all time highs, with more foreclosures in the pipeline.

This whole situation with the two-faced builders reminds me of real estate agents that are forced to get into the property rental/management business just to stay alive. Right now I'm going to bet that the island's commercial real estate business will start to recover before we see any meaningful recovery in the residential business. To rationalize that, I think we're going to see a good year for tourists, which will help commercial real estate, but not many of those tourists will be buying condos. People have to feel good about themselves and their finances for an extended period of time before they go out and buy vacation property. Just my opinion.
Billy Joneston @ Monday, April 18, 2011 6:30 AM
While you’ve wasted memories and money on bland and forgettable hotel rooms, savvy tourists have relaxed by private pools, enjoyed spectacular unobstructed views of the ocean, mountains and cityscape, cooked in roomy kitchens, and slept in past noon on their departure dates! Maybe you're not even aware of the hotels vs vacation rentals debate, but if you're a traveler, you should be!

If you plan to check into a hotel for your next vacation, stop right there! Although it’s easy to make hotel reservations, it’s not always the smartest and most cost-effective thing to do.

Millions of people book hotel rooms each day because they don’t know of a better option. But a cozier and often cheaper one does exist. Travelers: say hello to vacation rentals, and goodbye to hotels!

Here are five reasons you should ditch the hotel and book a vacation home instead:

1. Choose wide, open spaces – not tiny, cramped hotel rooms

Many vacation rentals by owner comfortably accommodate a whole family or two. Shop around for your ideal square footage and number of bedrooms. A vacation rental guest is typically treated to full-sized kitchens and bathrooms, so if you’re traveling with the kids, or a big group, it makes good sense to stay in one sizable vacation home – not several small hotel rooms (with several big bills).

Pet friendly vacation rentals
2. Pamper your pooch, too!

Not all property owners welcome pets, but many do. When is the last time you witnessed a dog or cat wandering around a hotel lobby? Pet-friendly vacation rentals are very
common. Don’t pay the neighbor to feed Fluffy while you’re away; instead, bring your beloved four-legged family member along for the trip!

3. Lots of cherries on top

A vacation is customized by each vacationer, so why aren’t hotel rooms? Vacation rentals offer a slew of amenities that hotels simply do not. Personal swimming pools, country club memberships, and even bicycles to ride around town on – the extras always surprise and may even save you money.

Avoid expensive restaurants and dine in a few nights out of the week with the help of your spacious kitchen; enjoy flexible check-in and check-out times; and stay in a choice location that puts you within walking distance of attractions.

When you book vacation rentals, you have decisions to make. When you book hotel rooms, the decisions have already been made for you. With even the most all-inclusive hotel packages, you are still missing out!
4. See the sights, not the sightseers

While you may be a tourist, you probably don’t want to hang out with other tourists. Hotel resorts are overwhelmed by out-of-towners. Not only is a vacation rental quieter and more private than a hotel, but staying in one makes it easy to immerse yourself into the local character of the city or town you’re visiting… and isn’t that the point? For those who enjoy the resort experience, remember we feature many privately-owned units located at resorts, too.
5. Support a small business

By booking a vacation rental by owner, you’re helping finance a “Mom and Pop” operation, rather than a powerful, corporate hotel chain.



People all over the world have turned their second homes into your next home away from home. Luxury villas, chic apartments, comfy beach houses, mountaintop cabins, ski condos, lakeside cottages, and even boathouses welcome vacationers just like you year after year. Explore spots on the globe you never dreamed of visiting on a budget, and relax in the lap of luxury without emptying your bank account!

Discover what you’ve been missing and book a vacation rental by owner for your family getaway, first (or second) honeymoon, church retreat, wedding, or month-long sabbatical. Vacation rentals by owner are so many and so diverse that you will easily find one that suits your unique itinerary and the specific needs of your party, however large or small. The bottom line is a hotel is simply not where the heart is! Thanks to vacation rentals by owner, you can follow your heart and your wallet as you consider your choices for vacation accommodations.
Rob Reuteman @ Thursday, May 05, 2011 3:57 PM
Vacation-Home Market Faces Long Road to Recovery

| 05 May 2011 | 12:24 PM ET

The buyers’ market for vacation homes is likely to continue for years, with activity largely limited to buyers with enough cash to circumvent a tighter, post-recession lending environment.

Thirty-six percent of all vacation-home buyers in 2010 did not use a mortgage — versus 29 percent the year before — while more than half of them financed less that 70 percent of the purchase price, according to the National Association of Realtors. Of those who bought a second home as a rental investment, 59 percent paid cash.

“Mortgage lending in the past three years has been pretty rough, with much higher underwriting standards,” says Paul Bishop, NAR’s vice president for research. “People drawn into the market at this point are buyers with substantial cash, or people not dealing with a mortgage. If your credit is strong and you put down a sizeable down payment, lenders are more interested.”

Vacation homes remain the hardest-hit sector of the U.S. real estate market. Sales fell 1.8 percent to 543,000 in 2010, according to the NAR’s 2011 Investment and Vacation Home Buyers Survey. The median price was $150,000 in 2010, down 11.2 percent from $169,000 in 2009.

“Vacation homes are one of the truest forms of discretionary purchases,” says Bishop. “No one needs one.”

“Anywhere you look, you are going to find prices we haven't seen since 2001," says Michael Sanders, a Sarasota, Fla. broker active in second-home sales. He say that's largely because of foreclosures and short sales of homes for less than what's owed on them.

The market decline has slowed but it was fast and furious at its worst. By 2008, sales of second homes and investment properties at resorts were down to half of their 2006 highs, when a better economy and easy credit turned over 1.7 million units.

“That was the peak of a very robust market,” says Bishop. “After the tech-stock bust, there was a desire on the part of many people for another way to invest. As we saw, many people took equity out of their primary residences and bought another.”

For years, anyone affluent enough to cover the monthly costs was rewarded by the eventual sale of that unit, adds Ralf Garrison, owner of The Advisory Group, a Denver-based resort consulting firm. “That model is broken. Anyone who bought a vacation home in 2007-2008 is not very happy about it.”

Now, as with other parts of the housing market, negative equity and foreclosures are common. Foreclosure or trustee sales in 2010 amounted to 11 percent of vacation home sales.

Bargain hunters also appear to be selective. Sales and prices are up at least in the high single digits over 2009 at such well-known resort areas as Hilton Head, Palm Beach, Cape Cod and Palm Springs, according to brokers there. Ditto for Lake Tahoe, Napa Valley, Scottsdale, Oahu, Pebble Beach and the Pocono Mountains.

Today's buyers are also different than the past, when many bought a second home as an investment.

More than eight in ten buyers of vacation homes plan to use their property for vacations or family retreats. Three in ten expect to convert their vacation home to a principal residence in the future.

In many other areas, any rebound is still down the road.

“In some areas of the country – California, Arizona Nevada, Florida – there was unrealistic growth based on cheap money and little risk,” says Garrison. "

Now, the depressed second-home market threatens the very health of some U.S. resorts, where real estate and construction provide the main lynchpins to the local economy.

In Colorado ski country, the Vail area employed 31,000 people in 2008. By the third quarter of 2010, employment was down 20 percent, with construction jobs down 46 percent.

“If you lose construction, you lose the locals,” Garrison said. “It’s a fragile economy, with an imbalance that’s particularly acute in those areas that have all their eggs in the one basket of real estate and tourism.”

After his $200-million residence hotel project in Telluride, Colo. ended up in bankruptcy, Alain Longatte, a veteran resort developer and founder of Scottsdale-based Resort Advisory Group International, is now concentrating his efforts in Brazil and Uruguay.

Langatte said. ““Since year end 2008 development for destination resorts has come to a screeching halt in this country. The money dried up. There are lots of very good projects in the U.S. at standstill. I suspect it will remain nonexistent for the foreseeable future.”

http://www.cnbc.com/id/42862675
Market Analyst @ Sunday, May 08, 2011 11:47 PM
From the article below: "It's cheaper to own than to rent"

http://www.marketwatch.com/story/housing-crash-is-getting-worse-2011-05-09?link=MW_home_latest_news

Rental Analyst @ Friday, May 13, 2011 12:28 PM
Here is a good article about the current vacation rental market:

http://www.cnbc.com/id/42918042

In short, a lot of property owners who want to sell are being forced into the rental market because vacation home sales are very slow.

The same situation may exist on South Padre. Due to the serious problems in Mexico, the move toward renting unsalable properties may be even more prevalent. At least one major rental agency on the island is advertising rental prices that are down roughly 5% from last year's levels. (Though there is variability between property type, rental agency, etc., the rental business is highly competitive) The rental agencies are also saying that visitors are generally renting for fewer nights, and making more last minute reservations. In other words, soft rental market.

The "sellers forced into renting" theory makes sense when you note that there are now 642 MLS listed South Padre properties on the market, which equates to roughly a 3 year supply at current sales rates. Massive oversupply.

From what I can see, there has never been a better time for South Padre fans to rent instead of buy. Many potential buyers are staying on the sidelines because they fear that property prices will decline even further, and with some analysts citing a four year supply of foreclosures coming onto the market, their fears may be justified.

With potential sellers coerced into the rental market, a lot of those sellers are actually losing a great deal of money renting their properties. (though it has always been hard to find an owner that makes a good profit renting on this island.) HOWEVER, what's bad for sellers is good for renters. Many renters can (and do) rent for significantly less than the actual owner's total expenses, a common situation on the island.

Even with rental deals like that to attract visitors, the rental market is STILL oversupplied? Will rental prices have to come down further for supply to meet demand? If I was a rental agent I would be calling my condo owners (right now) and asking for further rate reductions to increase occupancy rates. Making the tradeoff between price and revenue is more of an art than a science, but from where I sit, rental rates are still too high. A lot of SPI rental condos have absolutely NO advance reservations for July or August, yet the high season starts in just a few short weeks!

Also consider that if last year's Gulf Oil Spill scared away visitors, you would expect somewhat of a rebound this year, yet rental rates have come down? Something much bigger is hurting the rental market, yet the national economy is arguably better than it was a year ago.

If the island rental market has softened a bit, it's probably some combination of these factors:

- Situation in Mexico discouraging travel/SPI visitation
- "Belt Tightening" on the part of existing visitors
- More potential sellers pushed into rental market, increasing supply
- Higher gas prices discouraging visitors and limiting spending on lodging

Anybody else got another theory/explanation?
Mariel Jennings @ Monday, May 16, 2011 5:44 PM
Most interesting place on the island to rent is Sapphire. You never have a reservation problem, because few renters can afford the typical $450/night fee. I think I counted at least 29 of those condos available from just two rental places, and there probably is more. I can't imagine why somebody would buy a place like that to rent for only a few days out of the month, but that's the way it is. Very strange building. Seems luxurious, but there's a catch. You can rent a unit in one of the towers with fantastic patios on both the gulf and bay side, BBQ grill on the patio, granite counters, HUGE pool, right on the beach, valet, gym, sauna, and absolutely no commode privacy in the master baths. (Kind of like something you would expect from KB Homes) You will get more privacy using a bucket in the broom closet. (but seriously, you always get more than one bathroom in these places) Renting can be a real adventure, so be sure to talk to somebody who's been there before you put down a deposit.
SPI Visitor @ Friday, May 20, 2011 3:26 PM
I heard on the radio this morning that people were still planning to go on vacation this summer, but because gas prices are high, they will spend less once they reach their vacation destinations. Just a few years ago you needed a serious advance reservation to rent one of the island's rare beachfront three bedroom condos, but right now you can take your pick. I also believe that most three bedroom condos on the island are frequently sold (and rented) to Mexicans. Also remember that we had a very healthy Spring Break, mostly college kids from the USA. I come to the conclusion that although the USA side of the island tourism business is slowly coming back to life, serious problems in Mexico are hindering the entire local island economy from full recovery.

Another way to look at how Mexican problems impact the island rental market: Currently you risk your life traveling to the island from Monterrey. If you're a rich Mexican, and you can't use your SPI beachfront condo, you might as well rent it out to help pay the taxes and HOA fees.

One other factor impacting the rental market is that Tio Sam is doing everything possible to drive down the value of the dollar, to boost export oriented jobs. It's a policy that is working, but not without side effects. One strange side effect of that policy is that south padre property owners residing in Monterrey are actually starting to see noticeable INCREASES in their south padre property values, in terms of pesos, offsetting any small slow declines in terms of dollars. Yes, you heard me right. With the rising peso many Mexicans are actually making money on their south padre properties right now, if only on paper. Unfortunately with with the extra-soft island real estate market, and few immediate prospects for being able to sell anytime soon at market prices, it's understandable that many Mexicans are willing to rent for so little income. Most of them paid cash anyway, so they have no mortgage payments.

If you talk to the foreign exchange analysts, they'll tell you that they don't see any halt to the sliding dollar anytime soon. Obama likes the falling dollar. This policy has been doing quite well lately, with export jobs at an all time high. That will also make domestic vacations for USA citizens more attractive, as the costs to go to foreign destinations increases with the sliding dollar.

In summary: With the current rental inventory glut, it's a good time to be a SPI renter!

SPI Visitor @ Sunday, May 22, 2011 7:00 AM
Ooops, I screwed up! Permit me to correct myself. With regard to Mexican owners of SPI property:

Yes, Tio Sam is doing his best to drive down the value of the dollar to increase export jobs. That policy is definitely working, and there seems to be no change on the horizon. As the chart linked below shows, the recently falling dollar makes the value of the Mexican peso go UP. (roughly 6% less pesos required to buy the same number of dollars in just the last six months) From the Mexican peso perspective, dollar denominated assets such as SPI property values also slide DOWN with the dollar. Now combine that with SPI property values that may still be slipping a bit in dollar terms, and you can see that existing Mexican SPI property owners are taking a double whammy.

http://www.exchange-rates.org/history/MXN/USD/G/180

On the bright side, a stronger peso makes it more attractive for Mexicans to buy SPI property. They simply get more property for their pesos. Eventually that will lure more Mexican property buyers back into the market, after travel within Mexico becomes safe again.

Now back to my rental market theory. I'll stick to the same conclusion that it has never been a better time to be a renter. However I now think the biggest reason for this may be that there is still an obvious glut of properties for sale. When owners can't easily sell, many of them will try to rent until the market recovers.
News Reader @ Tuesday, May 24, 2011 3:34 PM
According to the article below:

"...the amount of time it takes to liquidate a foreclosed property is now, on average, 26 months..."

http://www.cnbc.com/id/43151250

Anybody out there know how many SPI properties are now going through foreclosure? If the number is significant, and you're a serious seller, talk to your agent NOW and take whatever you can get ASAP. On the other hand, if you're a potential buyer, rent for couple years until the foreclosures coming onto thee market push down prices even further.

Just my opinion......
Brad Fellows @ Thursday, June 09, 2011 9:43 AM
Renting on the island has changed quite a bit over the last couple years. A lot of potential sellers are simply giving up, and renting out their condos until the sales market improves. That means there are a lot of very high quality condos out there for rent, at bargain prices. You can often negotiate for less than $100 per night per bedroom for a beach side condo. It amazes me to see many condo units with incredible artwork, beautiful floors, premium appliances, custom wallpaper, massaging shower heads, gold plated faucets, floor to ceiling mirrors, comfortable patio furniture, TVs in every room, stereos, hair dryers, quiet flush toilets, extra comfortable beds, hand made quits, huge dressers, etc., etc. All the kinds of stuff you would put in your own personal condo, but seldom find in rental units.

As soon as you get used to all the wonderful amenities of your rental condo, you discover that some guy from Brownsville rented the condo next door, and brought literally 25 of his closest extended family members to monopolize the pool area, and break all the rules against eating food by the pool, glass beer bottles, etc. Then the next day a drug gang moves in, tattooed from head to toe, with their loud fat pool chicks in tow, all drinking Budweiser Select, and smoking. (When is the last time you saw that?) With the poor economy, I guess some of these places will rent to just about anybody, and ignore many policy violations.

I think what's going to happen is that all the more basic/typical rental condos will be forced to lower their rates, which will help drive down rental rates for the entire market. Eventually that will also cause property values to bleed, if it hasn't already.

From what I can see a lot of property owners are doing everything possible to reduce monthly fees by voting to cut back on outside maintenance and security. I think a lot of these HOAs are also having financial trouble due to deadbeat owners, foreclosures, etc., so the HOAs have to do something serious to reduce expenses. Sometimes it looks like there is one security guard who's job it it is to roam half a dozen different properties, and that kind of policy contributes to the overall decline of the properties. A lot of outside common areas are also in need of serious maintenance. For example, look at Isolla Bella, one of the best properties on the island. Walk on the beach and look at the front of that place - the new paint job looks like it was done by drunk painters, with different shades of sand colored paint on the upper beach-side facade. It's sad to see the beautiful island in such a state of slow decay. I think it's also possible there are now more people camping on the beach (for free) outside of town. The free sand dunes are definitely getting a lot of visitors these days. The character of the whole island seems to be evolving into a "more affordable" venue.
H.J.C. @ Friday, June 10, 2011 4:56 PM
Some of these on-site condo management firms still think they can insist upon a 5 night minimum stay during peak season. But, the ones that are making the most money are the ones who will rent for any length of time, and unfortunately for others, ignore the rules with respect to maximum occupancy and parking. That's just the way it is in this economy. If you don't adjust to the new economic realities then your business is going to end up broke. Just look at how many restaurants we have lost over the past couple years because they refused to lower their prices. To survive and prosper on this island you have to differentiate yourself from the competition. Just look at how Louie's Backyard can charge $19 for their buffet. They can get away with that because they have a very unique waterfront dining area. Why does Jaws get so much business? Because they have that silly shark surrounding the front door, that's why.

Condo rental firms need to ditch any condos with smelly old carpets and 20 year old mattresses, broken furniture, and owners who won't move on their prices. On the web site showing the available condos they need to put some pictures of Spring Break bikini babes out on the patio. Give those prospective customers a reason to browse ALL of your web site! You know how to differentiate your product/service, it ain't hard. It just takes a little more effort and creativity in this environment. Never forget what motivates people to come here.

I remember 20 years ago the most successful sales people were the ones who were accompanied by pretty young assistants. Times may have changed, but people are still human. How do you sell new cars? You put a good looking model in front of them at the auto show, that's how! Why can't we do the same with real estate?

http://www.wbtv.com/story/13106702/local-real-estate-firm-says-sex-sells-even-when-houses-arent?redirected=true
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