FORBES.com names Lake Lure, NC as a Top Ten Summer
Rental Community
By Sara Clemence
These days the mantra in the real estate world is: Buying beats renting. And
when it comes to vacation homes, Americans have been in a buying mode--but that
doesn't mean the rental market is taking a dive.
Second-home sales swelled last year, according to a study released recently by
the National Association of Realtors. Sales of vacation properties rose nearly
20% from 2003 to 2004, to a total of 1.02 million. Nevertheless, Washington
D.C.-based Travel Industry Association of America predicts that the vacation
rental market overall will grow 67% in the next decade.
That means rental prices will only continue to rise. Years ago, a beach house in
the Hamptons or Nantucket could be rented from Memorial Day to Labor Day for
several thousand dollars. That same house this summer will probably fetch
between $100,000 and $300,000. Think that rent is going to come down anytime
soon? Short of a complete economic collapse--and even then--don't count on it.
Adirondacks - Upper Saranc Lake
Aspen - Colorado Smuggler Mountain
Blue Ridge Mountains - N.C. Lake Lure
Hamptons - N.Y. Sagaponack
Lake Geneva - Wis. Walworth
Lake Tahoe - Nev. Franktown
Maine Kennebunkport
Martha's Vineyard Edgartown
Santa Barbara - Calif. Hope Ranch
Sonoma - Calif. Kenwood
What makes the rental market so attractive? For home owners, the reason is
obvious: fat rent checks that cover the costs of their properties and feather
their bank accounts. Renters get to enjoy a grand lifestyle at a fraction of the
cost--or hassle. After all, what seems like a better deal: renting a mansion for
the high season for $300,000 or buying it for $10 million? You do the math.
Still, this summer--with Wall Street ticking over better than it has in
years--plenty of investment bankers, lawyers and other members of the big bonus
club are buying anyway. These purchases are for either personal or investment
reasons and are further reducing the inventory of rental properties in the most
popular resort communities. This is causing aspiring renters to scramble more
than they have in years.
"The real estate market keeps going up. Demand keeps going up," says Nancy
Borino of Chase International in Lake Tahoe. "But our rental demands just keep
outpacing it."
It's not just Wall Streeters who are pumping up the prices of rentals, though.
The weak dollar is making U.S. vacation real estate especially attractive to
Europeans, who in the past were typically not buyers because the currency
exchange rates went against them for so long. Interest rates, which still remain
relatively low, are also spurring many people to buy now, while they can still
lock in favorable rates.
The upshot is that renters will find it harder this year to get the kind of
properties they want without paying a small fortune--or, for people who are
looking for better value, going off the beaten path. "We're starting to take
some of the Jersey Shore and Hamptons business," says Sarah Murcko, rental
manager for Kennebunk Beach Realty in Maine. "We're just an hour and a half from
Boston, and the prices are more reasonable."
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Boys Camp Road, Lake Lure NC 28746
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