Friday, June 13, 2008
$40,000 a month beach rentals in Encinitas?
Check out this Wall Street Journal story about summer rentals,
The 'Five-Star' Beach Rental
Ray and Cathleen Shera are among the beach house owners who are trying to lure tenants. The couple bought a four-bedroom oceanfront home in Encinitas, Calif., for $3.55 million in March 2007. Initially, they thought they might hold it a while, then sell it. But the Southern California real estate market quickly turned sour, so they decided to rent it out instead.
To stand out from other beach places on the rental market, the couple says they spent more than $500,000 on upgrades and new furnishings, including Italian leather sofas, a new kitchen with a 50-bottle wine chiller and a Jacuzzi with iPod hookups. They also stocked the linen closet with Frette sheets and towels and the baths with scented salts and shampoo. "We wanted the same quality as a five-star hotel," says Mrs. Shera, an interior designer.
Seven months ago, they started advertising the home for $40,000 a month in the high season. Their strategy worked -- at least to the extent that they've been booked most of the time. But because of the tough economy more competitors are adding their vacation homes to the rental pool every day, making it harder to attract customers, even with all the amenities. The Sheras recently cut their rates by more than 20%, and say they're just breaking even financially.
People are wacky!
High end Neptune rental example and here.