Did you know that approximately 70% of people who buy an Ocean City property plan to rent it out for summer income? With the local population swelling to more than 10 times the number of off-season residents, there’s a huge potential for owners to find tenants! The key is to ensure that your rental stays occupied through the season, and I’m going to show you how to make that happen without doing too much work.
3 Main Options To Find Tenants
When renting out your coveted Ocean City property, it can be a struggle to find tenants to regularly occupy your rental. The good news is that the short-term rental market is growing, and you have more options than ever before to find people to keep the money coming in.
Option #1: Hire A Real Estate Broker
This is a great option if you’re looking for someone to do the bulk of the work for you. You’ll get charged a commission, typically anywhere from 12-15% of your gross rental rate, for this broker to find you a tenant. With rentals, you’re not limited to using a single broker, so if you have multiple properties you’re free to work with multiple brokerages.
The real estate brokerage will handle all of the communication, including lease agreements, paperwork, payments, check-ins, and check-outs, distributing the keys, and any other pertinent tasks. You should be aware, however, that most rental agents don’t get paid a whole lot in these types of transactions. They’re usually less proactive in adjusting your rental rates based on supply and demand. This could ultimately cause you to lose out on some gross rental income over the longterm.
Option #2: Use An Online Service
The popularity of online rental services like Airbnb and Vrbo has skyrocketed in recent years. With these platforms, you can list your property and do your own marketing to try to attract tenants. While you’ll pay a lower rate using an online service than you would a broker, you’ll be responsible for paying state tax. The new tax laws require any tenant of a transient (short term) rental to pay occupancy tax. Depending on the area, this is usually about 12%. This means you’ll end up netting about the same whether you use a brokerage or an online rental service.
Unlike using a brokerage, you’ll be responsible for all communication with your tenant, including getting them access to the property and dealing with any issues. Having this control, however, will enable you to adjust your prices as needed based on supply and demand. Many of my clients have been able to increase their gross rental income by proactively adjusting their rates.
Option #3: Find Family & Friends To Rent Your Property
While this is a bit of an old-school option, it’s a viable way to get tenants into your property. Asking friends, family, coworkers and anyone you may know if they’re looking for a summer rental could result in a good line-up of renters. Knowing who you’ll be renting to can give you peace of mind and ease any communication problems you might encounter. You’ll also be cutting out the middle-man when paying certain fees and commissions, netting you more profit.
Regardless of who how you decide to get tenants, remember that you’ll still be responsible for hiring a weekly cleaner and handyman to keep the property maintained.
A Great Way To Earn Income
The family-friendly atmosphere of Ocean City makes it a great place to rent out a property and subsidize your ownership. Knowing all of your options and educating yourself will allow you to net the most rental income, which in turn will pay for your rental investment.
Ocean City is a unique market, so if you need more honest advice and guidance on renting out your property, I’m always here to help. Feel free to reach out to me with any questions you have!