By Joe Savage, Real Estate Broker
“I don’t rent…as far as I’m concerned, renters just tear the place up and make a lot of noise.”
“Why?” indeed. I invariably hear this 4-5 times a year . . . most often around annual homeowner meetings, when everyone gets together and talks about the budget and maintenance and all that jazz. The simple answer is, “Because it directly affects your property values. Yes, yours! Even if you don’t rent your unit.”
When it comes time, the buyer of your unit may intend to rent it to help offset his expenses. Most buyers do. Incidentally, the first thing out of their mouths when considering a unit is, “May I see its rental history?” Even (and especially) if you don’t have a rental history, the buyer’s agent will work to find comparable rental histories in the complex for units like yours. So your renting neighbors directly influence the value of your investment. The stronger the rental history, the more desirable the unit, the higher price it can command. MHI’s research indicates that approximately 80% of Gulf Shores Plantation’s units are rented.
If you are interested in seeing the value of your investment grow, the question becomes “How do we strengthen rental performance?” This is where renters’ perceptions of where they have chosen to vacation with their families becomes critical, as repeat business is part and parcel of growing rentals. No business can survive solely on new business. It is imperative that a rental guest leaves with every intent of returning and with a desire to extol the virtues of his decision to his friends, co-workers and neighbors. You can’t buy word-of-mouth advertising…you have to earn it.
But here’s the catch: Most renters don’t even begin to understand that GSP Mixed-Use Development is comprised of four independent condos and a PUD. They perceive it as a “family resort,” with all amenities. When you start engaging in renter-unfriendly practices or policies, like double or overcharging for deeded amenities, conducting major repairs during “high” seasons, “territorializing” the property and breaking it up into what amenity can be used by which guest, that affects the values of ALL owners in ALL phases, because the impact on a short-term guest is simply that “Plantation isn’t what it used to be!” They don’t really understand Plantation East vs. Plantation Dunes vs. Plantation West, etc. (nor do they wish to be bothered with it) - they just know the experience has deteriorated and therefore they begin to look elsewhere.
Same goes for buyers. Most buyers have arrived at their decision to buy at GSP Development because of their past visits as rental guests, and those visits typically involved a seamless, quality resort experience - and THAT is what they want to buy. When that stops, then the properties at GSP will no longer be a resort but will be just another condo like the stand-alone condos down on West Beach and Orange Beach. Then the Beach Club will be the only place left in Ft. Morgan for a “resort experience.”
“Why should I care about renter perceptions?” Well, I guess you shouldn’t . . . if you don’t care how much your investment is worth.
