Host, Christine Karpinski: I am Christine Karpinski. Thank you for listening to the How to Rent Vacation Properties by Owner podcast. Today's guest is Fred Roven. He is an exclusive buyer's agent in Martha's Vineyard. He also owns Martha's Vineyard buyer agents in Edgartown, which is on Martha's Vineyard.

Thank you for joining us Fred. I am excited to talk to you about the Martha's Vineyard market because my husband and I used to vacation there quite a many years ago when we first got married and I remember we looked at some properties when we were there one time and we thought, "Oh my gosh, they were so expensive", but now it's one of those places where I would have, should have or could have. Thanks for joining us.

Guest, Fred Roven: OK, I love talking about Martha's Vineyard and Martha's Vineyard real estate.

Christine: Well OK, let's talk a little bit about the market today. How is the market doing?

Fred: There's no question it's a strong buyer's market right now. There are probably 30% more listings than we had three years ago and there are many more people looking this year, which is a good sign. The prices are definitely down and there's a lot of negotiation going on.

Christine: You say that the inventories are up 30%. Is that due to the cost of properties going up and people are going, "Well I've owned for 10, 15 20 years. Now is a good time to cash out." Or do you think it's people that have purchased and may be it's not what they thought it was? What is the reason? Do you have any idea?

Fred: I think that the market shift blowing that property assistant down selling it's best, there's so much pressed about downturn in other areas that the country. It seems like it's just the coverage that affects the market, that there doesn't seem to be any particular trend as if people are hesitating because they're uncertain about where the market is going to go, so properties are staying in the market long here and so there's more inventory at any given time.

Christine: You know it's amazing, the power of the media, because you read so many stories about it and it really kind of hard scares some people off. I know, myself, I'm actually looking to buy more properties. I feel like this is a good time to buy. I feel like it's a much more comfortable atmosphere than it was a couple of years ago where I feel like I can take a little bit more time to research.

Now all of these properties that are on the market, are they great bargains to be had? Can I come in and make a really low offer and expect to get it?

Fred: I think that the prices have come down already. I think there was a problem where prices were just too high, they had gone up much too fast for the market. I think now that prices have come down although when people are anxious to sell there's still a lot of negotiation going on and sure at times there's certain properties that we know of, where people are very anxious and a low offer will still bring good negotiation and possibly a good price.

Christine: I would imagine then there's also the other times when people are like, "No, I don't need to sell it that bad". Now what about if you're going to look for vacation property in Martha's Vineyard and for listeners who may not know, Martha's Vineyard is off the coast of Massachusetts, and it's a bigger island and then there's a smaller island, Nantucket, which is just a little ways away from Martha's Vineyard if I were looking to buy a property there, what do you think the buyer would really look for in a vacation home?

Fred: I think that particularly with rentals in mind that proximity to the beach is probably most important point. There are people who like to be close to town, within walking distance uptown and we have six different towns on the Vineyard. If there are children then they want towns that have movie theaters available or have player is available, where there are activities for children. I think people are looking to be close to the bike paths. We have a lot of bike paths on the Vineyard and something that, it seems that renters ask about, right. I think that's the beaches then the bike path and town, so the three issues as far as location.

Christine: Now, on Martha's Vineyard, it's actually not that big. So I would imagine being close to the beach isn't as difficult as it would be say in an inland market, maybe even on Cape Cod, where you could be on the Cape or on the mainland and the mainland would be far away from the beach. So can you define what you mean by close to the beach? Does that mean like on the beach across the street or do you mean walk, drive, bike?

Fred: Being within biking distance of the beach. That's one of the criteria that people will look for. I think closer than bike, the prices would tend to go up. So as far as some personable price property where rental can benefit by the proximity to the beach.

Christine: Now what about Martha's Vineyard as a whole? How about the typical buyer? Where are they coming from? Are they mainly coming from New York or Boston or has it sort of opened up over the past years?

Fred: Probably 30 to 40% of our buyers are coming from the Boston area, within 25-50 miles of Boston. Although we have a lot more people coming from other metropolitan areas now. New York is important for us, Washington, Los Angeles, Philadelphia. So we see mostly from metropolitan areas though and I think that's steady. We have pretty big European clientele right now. Europe, Hong Kong, Japan.

Christine: Yeah, it seems like a lot of Europeans are buying here in the States. We joke about it. We say half of Florida is owned by people from the U.K. and I imagine it has to do with the strength of the pound or other currencies elsewhere. How are the costs of homes in that market? If I wanted to come in and buy some place, what would be the lowest that I could pay for a property that would indeed rent well?

Fred: I think you'd have to pay at least $450,000 to be able to find a property that you could rent down. There's certainly properties less than that, although not very much less but they would need working. So really not suitable for rental.

Christine: Is that a single family home or is that a condo?

Fred: Primarily we have single family homes though we have a few condos and they do rent quite well, we're just not zoned to have very many of them.

Christine: It's not a very populated island. How about, what is the mid range where probably the majority of the properties fall and for me to get into that market, what's about the mid range for prices?

Fred: Probably around $750,000.

Christine: Wow, $750,000. That's not small peanuts. I would imagine the high end would have to be in the millions, is that correct?

Fred: Yes, yeah we're up a million and a half to two million is not unusual price, and we can go anywhere 10, 15 million.

Christine: Wow, amazing. Now do you have any idea of the percentage of people who go there and buy with the intentions of renting out?

Fred: Well, from my experience and I've also asked some rental agents that insist from 40 to 60% of the homes on the island are purchased for possible rental.

Christine: So that's a pretty strong vacation rental market. Can you hold on one second? We just need to take a break for a word from our sponsors.

Now because you're in the northeast, I would have to assume that you have a limited timeframe that you can rent those properties. Is it primarily just a summer destination or has it sort of emerged over the last five to ten years to be sort of spring, summer and fall.

Fred: I think people are starting to discover how beautiful it is in the spring and fall here. There's certainly a fewer people, they are busiest. There's no question our busiest time is from mid June to mid September, with July and August being really busy on the island. But the shoulder season, as we call them are in just June and September that is very popular and even up to mid October.

Christine: Now when I go to buy a property there is there anything that I should be concerned with? In a lot of markets and I know that you know the northeast, because it's been around so long, are there anything like environmental issues that I have to concerned with, maybe even vacation rental bans, the army core of engineer control any of the properties, any of that sort of stuff that I would need to know before I bought a place in Martha's Vineyard?

Fred: There really aren't any issues as far as rental restriction. If you were planning buying it would be important to know that when you're close to the coast that additions and renovations would have to go through on many stage process, and probably that would include conservation group and watershed group, waterfront concerns that might need to be addressed as far as what you see from the water out, the kind of cutting that you might do of plant life and trees. So there are controls to that as you get close to the coast.

Christine: So, I would say that if you're going to buy there, probably not the best market to go and try to buy by owner because if you've got all those sort of odd things that could stumble you once you bought that property. I think probably for that reason, it's really important to use a real estate agent when you're buying. Is that correct?

Fred: I think that's true. There are a lot of considerations and in person agents can really advise you well on where good rental their areas are, what aren't so good and what you need to do to rent out, what you should look forward, so I think it is really important, maybe more important than in an area where you're looking to attract houses then they're all the same and you can just build by your own, your own mean to decide what to buy.

Christine: Now if I am looking to buy a home and I am looking at say the MLS listings, would it have the past rental revenue or expectations or past history? Would that be in the listing itself?

Fred: It's not, but it's usually information that we can get from either listing brokers or owners of property?

Christine: And on Martha's Vineyard, I just have to say that there are a fair amount of properties that are being rented directly through the owners and not through property managers. So I would guess you could probably just pulled up from the owners. Now, take that house that buys for may be six or $700,000, do you have an idea what kind of rental money that would bring in?

Fred: I think if you're close to the water, you could probably get up to $3,000 a week during July and August, may be a little more in August than July, away from the water, like two thousand to $2,500 depending on the area.

Christine: I mean that's upwards of $40 to $60,000 a year in rental right now.

Fred: I think that people hope to be able to do that.

Christine: Wow, excellent, excellent. How about sales tax? Do they have to collect and pay sales tax in your area?

Fred: No, there are no taxes on rental.

Christine: There's not very many of those places around. One last thing to have to do when you own Martha's Vineyard now, one other thing that becomes a little bit of an issue when you own in Martha's Vineyard that I'd like to talk to you about, I know that when we used to rent a house back in ghastly '80s and early '90s, we rented from a lady and she always setup passes for the fairy. Is it difficult to access the island at certain times? How is that changed since I've been there fifteen years ago?

Fred: One thing that owners have tried to do is instead of having their turnover days, always be Saturday or always be Sunday that they've tried to split that up during the week and I think it's helped the reservation situation a great deal and then we have same day reservations also rather than having to wait in long line but of course just find it at least, you really can't take a chance that you have to have that reservation.

Christine: Right, yeah because there's a chance that you cannot get on there. That definitely is an issue. Now is there anything else that you would like to add if somebody were looking to buy in Martha's Vineyard, anything else that they would need to know?

Fred: Well, I'd say it's a beautiful place, there are a lot of people who come and recall and have never been here and I always tell them that it's just really beautiful. We have long range expectations of quiet island, beautiful spaces to reside, open space, so I think we remain environmentally sound for a lot of years to come and yeah, I encourage people to come.

Christine: And if not to buy, even just come to visit. Well thanks Fred, much appreciated. Again, for listeners, this is Fred Wellwin that we're speaking with and you can contact him through www.mvbuyeragents.com and that his phone number is (508) 627 5177 and as always we'll have a link to Fred's website from the owner community and you'll be able to find out his information by going to the owner community at HomeAway.com.

Fred, thank you so much for sharing all this information about Martha's Vineyard.

Fred: Well thank you and I really enjoyed the time.

Christine: Have a great day.

Fred: You too.