Rentals like this can provide the foundation of a great vacation experience.
By Columbus Day, the vacation season in St. George is pretty much at an end. That means that the people who depend on the income vacation rentals provide hopefully have enough money in the bank to see them through the winter and into spring. “Fishing is our biggest industry here in St. George,” acknowledges St. George native Fletcher Smith, the owner of SummerMaine, a company that manages 34 vacation rentals in St. George. “But I think we overlook the positive economic impact of vacation rentals on the town. There is not only the income from rent, but also the money vacation renters spend. They come and set up shop here. They buy groceries, they explore local galleries, they rent kayaks.”
Justin Ford of On the Water in Maine, agrees. “The person who stays in a hotel or inn is not making anywhere near the economic impact that a vacation renter does.” Ford, who recently joined the St. George Business Alliance, manages 10 properties in St. George. By his conservative calculations gross rental sales in St. George, where he estimates there are about 100 vacation rentals, account for more than $500,000 a year, with an additional $250,000 in local spending.
Both Smith and Ford belong to a recently formed group called Vacation Rental Professionals in Maine that Smith says is trying to promote greater awareness of how much money vacation rentals bring into the state. The group also is watch-dogging legislative proposals to regulate the industry more tightly.
“There is no state license for vacation rentals in Maine,” explains Ford. “Anyone can open up shop and do it. There are only three government regulations in Maine for anyone offering a vacation rental. They must collect a lodging tax and submit it to the state, they must have smoke detectors in all bedrooms and other locations as dictated in the law, and the same goes for CO detectors.”
There have been proposals that sprinkler systems and hard-wired emergency lighting be required of all vacation rentals, as with hotels. Given that vacation rentals are also private homes, Smith says, the impact of such requirements would be both expensive and unsightly. “For a lot of people, renting their home is an economic necessity,” she points out. “They need the rental income to pay their taxes or to cover other expenses. My parents, for example, have a guest house they rent because their waterfront taxes are so high.”
This highlights the fact that by far the greatest number of vacation rentals in Maine—Ford says the number is about 18,000—are offered by the home owner. “Only about 5,000 are professionally managed,” he says, noting that he himself got started in the vacation rental business by renting out his own house to generate some extra income. “You’d be surprised how many people move out of their homes each summer so they can rent them to vacationers—half the people staying in the campground on Route 90 are doing that.”
Other property owners who rent their homes to vacationers or winter tenants do so with retirement in mind. “They buy a house knowing retirement is a long way off, but by renting it they can cover the mortgage and other expenses until they can move in permanently,” Smith says.
Justin Ford and Mary Bumiller
Mary Bumiller, who now works with Ford at On The Water as the company’s real estate broker, also points to the growing number of people who are purchasing properties purely as an investment. “My specialty is very quickly becoming investment properties the owner can rent,” she says, noting that she is also selling to people who have rented through On The Water and have decided it is time to buy their own place.
Another proposed state law that could have a big impact on vacation rentals is modeled on ordinances that some towns have instituted requiring vacation rentals be for a minimum of one week. Camden is an example. The problem with such a restriction, both Smith and Ford say, is that in places like St. George the period when renters want to stay in a house for a week or more is only about seven weeks long. “During the ‘shoulder’ seasons people often just want to rent for a long weekend and we need to be able to accommodate that to stay in business,” Smith notes.
As professional managers of vacation rentals, both Smith and Ford have spent a lot of time analyzing what it takes to make their businesses successful, which is basically about ensuring that the people renting their properties have a good experience and want to return. Smith points out that this requires property owners to think differently about their properties. “I find I have to convince owners who want to rent their property that they will be part of the commercial rental industry,” she says. “It used to be that in places like St. George anything would rent. But that’s not the case anymore. You have to maintain certain standards so that people will want to come back. The house has to be clean and well-equipped—the grill can’t be rusted, the sheets and towels must be of good quality, the cookware has to be good. You have to remember you are building the foundation for a great vacation experience.”
Ford, who is also a volunteer firefighter, says that maintaining high safety standards is particularly crucial. “You don’t want to wait until something bad happens. That’s why we do full building inspections on all our homes each year. We like decks and railings to be up to a standard building code, we like grills to be appropriately placed, we like emergency preparedness plans in homes, we like them to have land-line phones so guests can easily call 911 in emergencies. In general, we like them to be ‘safer’ than the average home.”
Both Ford and Smith say it is also important that prospective renters and owners alike know what to expect of the rental arrangement. “You don’t want complaints that the renter didn’t know that lobster boats head out of the harbor really early or that cell phone service may not be perfect,” Smith laughs. “And you don’t want to find out that a renter is bringing eight people to stay in a two-bedroom house! We spend a lot of time making sure there is a good fit between the renter and the property.” —JW
PHOTOS: Top, SummerMaine, bottom, Julie Wortman