Owners of Florida properties who offer last minute deals and special offers are pushing prices down, according to an owner who has complained that some weekly rates advertised in Holiday Villas and Cottages magazine and on VillaSeek.com are too low. In emails to us he wrote:
“Having read your magazine in our doctor’s surgery I was shocked to see that it was full of bargain basement Florida villas whose owners are literally giving their beautiful homes away. As we don’t discount or charge cheap prices we do not feel that this sort of magazine which has such cheap villas would be a suitable place to advertise our home.”
“The rates were, to put it bluntly, scandalously low. This is the mindset of villa owners who think that ‘anything is better than nothing’ but that sort of marketing encourages haggling and bargaining, and pushes prices even further down.
It also attracts the sort of people who DON’T respect your home as they have paid so little that they think that the villa owner is made of money in order to be able to subsidise their holiday – and the guest is laughing all the way to the bank as they spend all the money they have squeezed out of the villa owner on extra park tickets or designer gear.”
For a 4 bedroom, 2 bathroom villa in Esprit, Davenport, this owner charges from £599 to £750 per week. Is he correct in believing it’s better to leave the villa empty than offer a last minute price of, say, £300 per week? And is his belief that people looking for a bargain are less likely to respect the house well founded?
Rental prices in Florida have been tending to fall because so much property is on offer and visitor numbers have been dropping. Is this a trend that can be successfully resisted?
Another factor is that lower property prices mean owners who have bought cheaply can offer low rental prices. For instance, our current issue has an ad from Dolby Properties which includes this property:
Highlands Reserve – immaculate 5/3.5 villa with sunny pool. Outstanding rental history. $291,000.
That’s around £180,000 – say £200,000 with taxes, charges and set-up costs. So if you were to rent that out at £395 a week (the sort of ‘scandalously low’ figure our emailer has in mind) you would need to sell 31 weeks a year to bring in £12,000. In reality, you would charge more for the summer holidays and Christmas.
Would £12k be enough to pay mortgage, management costs, cleaning, local taxes, maintenance, insurance and all the rest of it? And would you be better off selling, say, 20 weeks at £595 to bring in the same sort of money?
And why is it that the spread between minimum and peak weekly prices is much less in Florida (where the peak price is usually no more than 50 per cent higher than the minimum) than, say, Spain where the top rate is often three times or more?
Let us know your views in the comments section below – whether you are a holidaymaker thinking of renting a Florida property, an owner trying to make a success of renting, or maybe a professional involved in the business.