Quick Tips: Owning an Ohio Lakefront Investment Rental
There are a few different types of lakefront buyers floating around out there looking for their Ohio lakefront home. Some people are looking for a second home, a place to get away from everything else going on. Others are looking for a full time residence that they know they’ll enjoy every day with fun at the lake, and others are looking for a quiet and peaceful place with a waterfront view to retire at. And of course there are your more finance-savvy buyers who are thinking about what I call a “Lakefront Investment Rental”. These are the buyers saying to themselves: “what if I can get lake house that I can use for myself, but also rent out on the weekends I’m not using it?” Makes sense. If your lake house isn’t being used 3 weekends out of a month, might as well make some money to help pay that second mortgage. But, as I’ll explain, there are a few things to consider before taking this approach, and it isn’t always as easy as it sounds. Here are some tips when dealing when contemplating purchasing a Lakefront Investment Rental.
Potential Problems to Look Out For
1. Short Term Rental Policies
The biggest problem here is that a majority of lakes in Ohio that would be good for weekend rentals, don’t actually allow weekend rentals. For instance Apple Valley Lake, Candlewood Lake and Hide-a-way Hills (just to name a few) don’t allow them. In fact most private lakes with HOA’s throughout Ohio do not allow what they call short term rentals. Most of them have to be at least 6 months or longer. And although doing a six month rental may make you some money, you wouldn’t be able to use the lake house yourself on any given weekend. Now going along with this “no short term rental policy” problem, any lake that is on Muskingum Watershed Conservancy land does not allow any sub-leasing whatsoever. Now remember in the MWCD blog written a few months ago? It explains that all lakes owned and operated by the MWCD such as Charles Mill, Tappan Lake and Seneca Lake are a special situation where the buyer actually only buys the structure and they buy into a lease with the MWCD for the land that the structure sits on. And that makes everyone a lessee, and since the MWCD allows no sub-leasing (renting out your property would therefore be a sub-lease) there is no leasing or renting of any kind on these properties.
What To Do About It
The way around this is quit simple, find a lake that allows short term rentals. The good news is that most, if not all, State Parks allow this setup. Since State Parks are public lakes the rules and regulations are generally pretty lax. The only issue is that not all State Parks have lakefront property for sale. But If you go to public lakes such as Buckeye Lake or Indian Lake you’ll find that weekend rentals are in fact common. Also there is the rare situation where you would find a private lake that does allow short term rentals, although I don’t know of any, or you could find the ultimate rare find: a lake house at a MWCD lake that actually isn’t on MWCD property. That’s right, although very hard to find there are areas around these lakes such as Seneca, Tappan, etc, that are privately owned inlets or coves. These homes would be a good set up for a weekend rental, as long as that particular HOA or private community allowed it.
2. It Can Require Too Much Work
Let’s face it, renting out a property, even if only for a few weekends can require a lot of work and a lakefront investment rental is no different. Just like renting out any other home you would be responsible for maintenance, and if anything broke you would have to arrange to have it fixed. And with weekend rentals especially you need to make sure the place is clean before another guest arrives, as well as have some sort of system in place that people can find your rental and book it. Whether that’s a website or just word of mouth is up to you, but the easier to book the more clients you’ll have, and the more clients you have the more money you’ll make. But building a website and managing appointments and upkeep can add up to a lot of work that you may or may not want to take on.
What To Do About It
Maybe plan from the beginning on renting it out only once a month or a small amount of times per year, this would keep maintenance and upkeep low. Also think about who you’re renting it to. Maybe only rent to neighbors and friends, this way it keeps scheduling easy and the guests reliable who won’t damage anything. And if you need to rent it out on a larger scale possibly have a neighbor (at the lake house) be your eyes and ears on the property, someone who you can pay to clean it or fix things on the fly so that things can get done quick and easy.
Tips on How to Do a Lakefront Investment Rental Right
1. Have the Property That People Want
If you’re going to do the weekend rental then make sure it’s easy to rent. Have a unique property that’s staged and placed in a setting that people want to spend money on. People love beach-houses and they love cabins in the woods. If you can find or make the property that fits one of these categories well that it won’t be as hard to get people to rent and they’ll generally be willing to spend a little more. Not as many people want to rent a regular house on the lake for a weekend. Make it unique and fun and make sure that the property has a nice view if you want it to be a successful lakefront investment rental.
2. Have the Lake That People Want
You’ll need to balance popularity, distance and location for this one. If a lake isn’t very popular or well known it may draw the crowd that is looking for a very quiet place to spend the weekend, but if it’s also three hours away from the nearest city then you may have a very narrow percentage of the population wanting to rent it. That being said, if it’s too close to a large city then it may repel people who really do want that weekend get away. Twenty minutes isn’t much of a get away. Some lakes are more popular so that it’s easier to rent out, but again if it’s very far away from you it may become harder to manage. You’ll really need to consult your lakefront specialist and do your research on this one.
3. Decide if You’re Going Big or Small
This one is easy. If you’re going big, then worry about what the customers want first: location, size, layout, view etc. This way you can maximize your income. If you’re going small then you need to decide what you want as well. After all, you will be using this house on the weekends as well right? Make sure its the perfect combination: something clients / customers and yourself can enjoy for many years to come.
Last but not least…CYA. This means CONSULT YOUR ATTORNEY. Weekend rentals, especially around a body of water with inherent risks, can be a touchy legal issue. Consult your attorney and have everything set in place before you take this venture with your Lakefront Investment Rental!
Written by Justin Shelton Lakefront Consultant – The Lake Team