Announcer: Welcome to the "How to Rent Vacation Properties by Owner" Podcast Series. Your host is best‑selling author and vacation property expert Christine Karpinski. Today's show is brought to you by HomeAway.com, the world's most complete marketplace for vacation rentals. Join the network at HomeAway.com.

Christine Karpinski: I'm Christine Karpinski. Thank you for listening to the, "How to Rent Vacation Properties by Owner" Podcast. Today's guest is Lynn Wilber. Lynn is a real‑estate agent in Naples, Florida.

She started selling real estate in 1978 in a small suburb outside of Chicago in Berwyn, Illinois. Today she sells in Naples, Florida and we're going to talk to her about the current market in Naples.

As we all know, Naples is a very popular destination for vacation homes and of course, for vacation rentals. It's a great destination for a lot of people from the North as well as people from Europe come to Naples.

We're going to talk to her about people who are buying in those markets; what sorts of things we need to know when we are buying in Naples and maybe some amenities and other nuances that might be specific to Naples.

Lynn thanks so much for joining us.

Lynn Wilber: Thank you for having me today.

Christine: OK. So, tell me, how did you end up in Naples from Chicago?

Lynn: My husband's mom had owned property outside of Naples in Golden Gate and we had come down here in '77 and honeymooned. I absolutely fell in love with the place; fell in love with the beaches, blue skies. Compared to Chicago land, this is absolute paradise.

Christine: [laughs] Much warmer too, right?

Lynn: Oh yes!

Christine: [laughs] So you moved in 1996, is that correct?

Lynn: That's right.

Christine: What motivated you to move?

Lynn: My husband was working on me. We had bought the new construction down here and it was a two‑year period of time that it was being built. He worked on me for the two‑years to move down here.

[Christine laughs]

Lynn: It was difficult to give up the business I had up North and established over so many years and start over again. But, its well been worth it. It's been an absolutely wonderful lifestyle down here and we enjoy it very much.

Christine: Very nice. You can't beat being at the beach and the sunny days, [laughs]

Lynn: Oh yeah.

Christine: And all of that. So who do you work for? Is there a real estate agency you're working for right now?

Lynn: Yes, I work at Downing‑ Frye Realty Inc. It's a large independent company here in Naples. He's got several offices and hundreds of agents work there.

Christine: Nice. So, a nice big agency. It must be nice to have the support of a big broker and also to be a pretty well‑known agent, right?

Lynn: Oh yes. Definitely. That always helps.

Christine: [laughs] Now, do you have a website?

Lynn: Yes I do, www.naplesbuys.com.

Christine: And that's N‑A‑P‑L‑E‑S‑B‑U‑Y‑S.com.

Lynn: Correct.

Christine: Excellent. So tell me about the vacation home market in Naples. How is it right now?

Lynn: In terms of sales right now, I would say the market is really pretty soft, but it's a great time to buy. We have large inventories in both condos and single‑family homes. So there's a great selection out there.

Christine: OK. What does a prospective buyer look for when they're coming to Naples and are they primarily buying condos or is it really a mix between single‑family homes and condos?

Lynn: It's really a mix and I would also say that each person that comes down has something individually that they are looking for it maybe the beach; it could be a golf course community. It could be a boating community. It could be a tennis community.

I mean there are so many active things to do down here. People have their different things they enjoy so it really depends on the people.

Christine: What about the ages of people who are coming to buy? Naples, in my mind in the past, was a place where a lot of retirees went. Are you still seeing that or are you also seeing some younger people buying into that market? Perhaps, buying for later on when they retire.

Lynn: Actually, I am. I am working with people anywhere from mid‑40s into their mid‑60s. So, quite a spread going on there.

Christine: When they buy in their mid‑40s, obviously they're not to their retirement age yet so they are not using it as much as say somebody who's 65 and already retired. They're probably going to use it a fair amount themselves. They'll probably come down and stay the winter. What are the people that are in their mid‑40s what are they doing with their properties?

Lynn: Some of them are renting them out. Some of them are holding for family members to use in season. It really depends on each individual and what they're priorities are.

Christine: Now, is there any certain area that you are seeing more people come from? Such as right now the dollar is not as strong; are you seeing a lot more people from the U.K. or Canada buying? Or is it..

Lynn: Actually, a lot more Europeans. We've had, in the sub‑division that I live in, by sales we had last year, four out of the five were from Europeans.

Christine: Wow. I can imagine since the dollar is weaker throughout the world, that a lot of people from outside the U.S. can come in and buy. So, I would imagine that that would definitely play into it. Now, with regards to the Europeans, are they also renting out the properties?

Lynn: Yes.

Christine: OK. Now what about the average cost? You said there's kind of a balance between condos and homes. If I wanted to go into Naples and I wanted to buy a vacation home and definitely want to rent it, what is the low‑end price for properties in that market?

Lynn: Well, a low‑end price for a single‑family home is going to be about $165, according to our multiple‑listing service.

Christine: Wow, that's actually pretty reasonable.

Lynn: A condo is going to be $85, 000.

Christine: Wow.

Lynn: But you have to think about where they are in relationship to the beach because that's where value is.

Christine: Correct. OK, so that's in the general Naples area. Now let's talk about in the vacation. Most renters want to be on or near the beach, within a few blocks of the beach. What do those properties run for?

Lynn: Well, I can tell you the high‑end, which is obviously going to be on the beach. You've got single families at $12 million and you've got condos at $8 million.

Christine: Oh my!

Lynn: So, you're all over the board here. Your median for single family is $428, 000 and your condo's a $304, 000.

Christine: OK. So, if I were looking to rent out and really wanted the beachfront or beach view, it's going to cost me somewhere in the range of $400, 000 to $500, 000, is that right?

Lynn: For a median to be on the beach, it's probably going to be a little bit higher than that. This is taking in all of Naples, when we talk about a median price.

Christine: Oh, wow! Wow, wow, wow. Yes, so it's a pretty expensive market.

Lynn: Oh, yeah!

Christine: It's not cheap to go to Naples.

Lynn: No [laughs]

Christine: Now, tell me about the rentals in that market. What are the average rental rates? I suppose with such a big market, it's going to be difficult to quote that, but what could I expect?

Lynn: Well, obviously, if you're going to be renting in season and you want to be near or on the beach, you're going to be paying, I would guess, anywhere between $5, 000 to $10, 000 a month in season.

If you're renting on an annual basis and you're renting further away from the beach, you're probably going to be around $800 to maybe $1200 a month.

Christine: Right, right, right. So, those $85, 000 properties are going to rent for significantly less than the ones directly on the beach.

Lynn: Correct, correct.

Christine: Now, does it matter what kind of properties... Like, the renters that are coming to the market, the seasonal renters, do you find that they prefer condos or single family dwellings? I'm just thinking about I own property in Dustin and in Panama City and the winter renters that come down, they really like staying in the condos because there seems to be much more camaraderie, there's neighbors around.

They get together for happy hour, they might get together for golf or tennis or there's activities within the condo complex. Are you finding that the renters prefer one type of property over the other?

Lynn: I have dealt mainly with people that are looking at condos and not so much single family. You're correct, a lot of it has to do with the social aspect of being in a condo and meeting people at the pool and meeting people down at the beach. It really does play a big factor into it.

Christine: I would think so. Oh, can you hold on one second? We just need to take a break for a word from our sponsors.

[Commercial Break]

Christine: Now, is there anything coming into the market? Like, if I were buying, is there anything that I need to be aware of, maybe some environmental issues? Maybe with beach restoration or perhaps vacation rental bans? Are there certain condo complexes or homeowners associations that don't allow weekly rentals? Is there any sort of restrictions a prospective buyer needs to look out for?

Lynn: Yeah, environmental. The big hot button right now is mold in terms of you see visible mold or you can smell mold. Obviously, you want to have some type of mold test done. In terms of weekly rentals, there are not a lot of weekly rentals here in Naples. We're dealing mainly with 30 day minimum. Some complexes go on to 90 day minimum.

Christine: Wow!

Lynn: Which is, in a way, I think kind of bad because we're dealing with a lot of people who are coming down and they can only spend a month. They're younger, they're not in their 70s or 80s and looking to spend three months.

Christine: Right.

Lynn: They're maybe in their late 50s or early 60s and they only can spend a month because they're still working.

Christine: Right.

Lynn: Now, which is really kind of a pity, but, yes, you have to really look at the rental restrictions when you're purchasing something.

Christine: Is that mostly dictated by the homeowners associations or is it dictated by the county?

Lynn: That would be the condo association.

Christine: Oh, OK. OK. So, definitely, if you're looking to rent on a weekly basis, you've got to check those CCNRs. Make sure there're nothing written in, if you are looking to rent on a weekly basis, make sure there's nothing written in saying you cannot rent it on a weekly basis, which, by the way, is probably the most important reason to use a real estate agent.

If you're going to buy and trying to buy on your own in a different market, not knowing these things could really put you into a precarious position if you end up buying in a condo complex or a homeowners association that only allows 90 day rentals.

That's something that you really need to depend on your real estate agent to research and find out for you.

Lynn: In the state of Florida too, Christine, when you purchase a condominium, you have three days to review all the condominium documents once you receive them.

Christine: Right.

Lynn: If there's anything in those documents that you disagree with, you're out of the contract.

Christine: Right, right.

Lynn: So, it's important that once you do receive those documents, you actually read them.

Christine: It's really funny because so many people get this huge book, sometimes they're 300 or 400 pages and they don't look through it at all. To me, you're making a huge investment. Let's assume you're buying on the beach, its $500, 000 or more that you're paying.

I think a couple days worth of reading and making sure to read through those to make sure that there's nothing that's going to create a hiccup in your plan, I think it's really important.

If you have questions, you can always go to the homeowners association. Although, what I don't recommend is just taking the person's word for it because quite frankly, a lot of times, even the homeowners association's people, a lot of times, they are volunteers. They may not have read it from cover to cover either.

What you would want to do is you would want to ask the question, where is it in the CCNRs? Is it written about rentals? and have them tell you which section and then refer to that section, read it on your own. If you have questions further, then take it there. Of course, your real estate agent can really help you with those things.

Lynn: You definitely want to be aware if that and also financials for the properties you want to take a look at too, I would advise. And make sure you have no special assessments around the property and things along those lines.

Christine: Well, in the state of Florida, when you purchase a property with special assessments on the books, typically, isn't it required that if it was written into the condo docs, isn't it required that the seller pays those special assessments before the sale?

Lynn: Our contracts in Naples were recently changed and it talks about the special assessment. I found that even though it may say the seller may pay for them, people still try to negotiate things.

Christine: Gotcha.

Lynn: It really just depends.

Christine: OK. Yes, so that's important to know as well. Check those special assessments and we kind of have almost short term memories about things.

There were some really bad hurricanes back in 2003, 2004 and 2005. We all have sort of Katrina on our brain, but really, there were a lot more hurricanes than just Katrina that hit a lot of parts of Florida and those hurricanes that hit caused a lot of damage that took a lot of time for those properties to recoup and a lot of condo complexes still have special assessments on their books. So, yes, it is very, very important to check those.

Lynn: One of the things I'd like to mention too is in terms of insurance because everybody has heard about the state of Florida and how our insurance rates have gone up. People may not be aware, if you're in a condominium association, that there may have been a wind mitigation study done on their roof. If this has been done, you can get a copy of that from your condo association and take that to your insurance company..

Christine: And you get reduced rates!

Lynn: Yes, see if you can get a discount.

Christine: Yeah!

Lynn: Ours were reduced I think about $300 when we took ours in. So, it's pretty substantial and it's worth investigating.

Christine: Absolutely, absolutely. One of the other positives with regards to a condo association is a lot of times, the structure is insured by the association, not always, but a lot of times it is. So, when you go to purchase insurance, you're just purchasing insurance for the interior walls. So, obviously, there's not as much liability on the insurance company's part from your perspective, so your insurance might be lower than, say, a single family.

Lynn: A single family home.

Christine: Right, right. So, definitely things to look into when you're buying pretty much anywhere these days, even if you're not buying in "hurricane alley." It seems like the hurricanes and wild fires have really had a negative effect on the insurance industry and especially for second home owners.

It's really played in very heavily and it's costing a lot more money to be insured as a vacation homeowner because we're not covered under the state insurance policies, and by "policies" I mean legislative policies. It's not backed by the state.

Lynn: Oh, I think it's a good idea too, Christine, if you do find a property that you're interested in and you're worried about the cost of insurance, especially with a single family home, it's a good idea to go out and get a quote on that, just to have a concept of what the insurance might be.

Christine: Right.

Lynn: Because everybody has different deductibles and it depends on what the person feels comfortable with. But, at least, you can get kind of a rough idea to figure in for holding cost on the property.

Christine: Right. When you're doing that, perhaps I saw a property that I wanted to buy and I was really concerned about the cost of insurance, could I write a contract with a special stipulation of pending insurance quote or something like that?

Lynn: I'd write it and I'd put it in pending the insurance quotes by such a date. You don't want it sitting out there forever. You want a date to be able to have the quote by and what's going to be acceptable to you.

Christine: OK. So, typically, you'll have to put in parameters like if the insurance comes out more than $1200 or more than $3, 000 or whatever it might be?

Lynn: Correct.

Christine: OK. So, having some boundaries within that. Well, thank you so much, Lynn. This has been really helpful. I think anybody looking to buy in the Naples market would definitely appreciate all of the information that you've given today. If you're looking to buy in that market, Lynn is certainly available on her website.

Again, her website is naplesbuys.com. Lynn, do you have a phone number that people can contact you?

Lynn: Yes. That's 239‑594‑2780.

Christine: OK. One more time, that phone number is area code 239 594‑2780. Lynn, thanks for joining us today. We wish you the best in Naples!

Lynn: Well, thank you very much, Christine. I just want to add one more thing for advice to buyers. If you're thinking of purchasing something now, I would say try to purchase as much of a home as you can because your money is going to buy you more right now. Also, try to purchase as close to the beach as you can because all those kids and grandkids you think don't need space will need it, because if you buy it, they will come.

[laughter]

Christine: It's so true, it's so true. Once you're a vacation homeowner, everybody comes out of the closet, right?

Lynn: That's correct!

[laughter]

Christine: OK. Thanks, Lynn! Have a great day!

Lynn: You too, Christine. Thank you very much!