Pay for Your Vacation Home with Nightly Rental Income

Unobstructed ocean view

Unobstructed ocean view

Owning a Washington Coast Vacation Rental

In 2007 we purchased a newly constructed house in Pacific Beach with the idea of running it as a vacation rental to cover our expenses, while we enjoyed a beautiful vacation getaway for our family. We got the idea the previous year from a couple in southern Oregon who managed a vacation rental at Port Orford at a similar 2 to 3 hour distance from home. Then I read “How to Rent Vacation Properties by Owner” by Christine Hrib-Karpinski – the paramount guru on the topic. This book gave us courage to try the vacation rental business ourselves. It calmed several fears, such as that it is extremely rare that guests will maliciously damage a house (which has been our experience as well).

The experience has been extremely positive. We’ve thoroughly enjoyed the Washington coast and nearby lakes and rain forests, exploring every bit of it you can reach in a day trip. The biggest surprise of running the vacation rental is how very grateful the guests are, giving us fulsome praise in our guestbook and by email. The guests have enjoyed this house every bit as much as we have.

See Bob’s Pacific Beach House.

Beautiful Grays Harbor County

The closest ocean beaches to Seattle are found in Grays Harbor County.  Fifty miles of wide, sandy beaches are divided as follows:

  • The South Beach: Grayland and Westport.  Westport is home to the state’s tallest lighthouse, an excellent maritime museum, and a working harbor with whale watching and deep sea fishing charter boats.  Grey whales pass by the area in the spring.
  • Ocean Shores and Ocean City: The largest retirement and vacation community along the Washington coast.  Ocean Shores homeowners enjoy membership in a club house, private park, and indoor and outdoor swimming pools.  A major resort and casino is found at the top end of Ocean Shores, the Quinault Beach Resort.
  • The North Beach: Copalis Beach, Seabrook, Pacific Beach, and Moclips.  This is the prettiest area of the coast with high cliffs behind the beach topped with a forest and rivers cutting through the sand to the ocean.  Seabrook is a postcard perfect, purpose-built beach recreation community with beautifully designed homes that are all unique architecturally.
  • Quinault Indian Beaches: The beaches on the Quinault reservation at Point Grenville and Taholah are the most beautiful in the county.  Unfortunately, they were recently closed to non-members.  We can hope for the visitor pass system to be restored in future.

Nearby is the jewel of the Olympic Peninsula: Lake Quinault with its sparkling water, mountain backdrop, historic lodge, and ancient rain forests.

Copalis Rock

Copalis Rock

Freedom on the Beach

Considerable freedom is allowed on the Grays Harbor beaches compared to the Olympic National Park beaches to the north.  Pets are allowed on the beach.  Driving is allowed on the beach in designated areas.  Beach driving in Grays Harbor and Pacific counties is mentioned in the Washington State Driver’s Guide for new drivers.  Fireworks are allowed at July 4th and there is a massive, hours-long display when the whole community parks on the beach between Ocean City and Ocean Shores and lets off their fireworks at the moment the sun sets on the horizon (see video of Fire O’er Water).  Beach fires are allowed, if kept 100 yards away from the beach grass.  The only beach activity that is highly regulated is razor clam digging, which requires a permit.

Self-Management (Vacation Rental by Owner)

So what’s involved in self-management of a vacation rental property?  You have to place and pay for advertising.  You will respond to calls and emails inquiring about the house.  It will take maybe 10 inquiries to get one reservation.  You need to establish policies about payments, deposits, and cancellations.  You will manage these payments and keep track of who hasn’t paid you on time.  If you don’t live nearby, you’ll need to arrange for cleaning, landscaping, and repairs.  The house we bought was new construction and completely empty, so we had to fill it with furniture, contents of the kitchen, linens and towels, cleaning supplies, pillows, books, games, toys, movies, a stereo, three TVs, an Internet router, and on and on.  We had a busy, full three weeks getting our house ready for the first guest.

Two big concerns new vacation rental owners will have are how will the guests treat the property and how will the property stay secure when it is empty?  On the first point, Karpinski’s book reassured us that malicious damage by guests is extremely rare, and that is how our personal experience has turned out.  Regarding security, we bought in a fortunate location surrounded by a resort for naval personnel – not the first place a thief would think to target.  However, even a remote property can be made more safe: upgrade the locks on doors and windows, set lights to turn on and off with timers or sensors that detect darkness, and keep the landscaping trim and neat so that the house doesn’t look abandoned.

On the North Beach, we are lucky also to have an excellent and affordable vacation rental management company: Pacific Beach & Beyond.  Their full management fee is reasonable at 35% of rental income.  They also offer unbundled services to self-managing VR owners.  We use them for garbage service (cheaper than the county service), repairs, and yard maintenance.  We were fortunate to find an excellent, reliable cleaning lady who lives just three blocks away (see Pacific Beach Local Services).

Where to Buy a Vacation Rental?

You can’t open up a vacation rental just anywhere.  City zoning has to permit it.  If the property is governed by a condominium or homeowner’s association, then you must check that these rules permit nightly rentals.  Think about the future of your community too.  If the area is heavily occupied by residents and does not depend on tourism, the community might pass a nightly rental ban in future.  The best locations to buy a vacation rental would be an area where vacation rentals are well-established and tourism is welcomed.

In Grays Harbor County, most of the coast is zoned for nightly rentals.  However, Ocean Shores banned new vacation rentals back in 1993.  Any existing vacation rentals were grandfathered in, but their licenses cannot be transferred to a new owner.  Westport permits any residence to be a vacation rental, but they must be registered, a designated local property manager must be identified, and the neighbors notified with the manager’s contact information (more about vacation rentals in Westport).  Seabrook requires any owners wishing to rent out their houses to participate in the community cottage rental service.  Certain HOAs along the coast restrict rentals in their covenants, so make sure you ask a real estate agent about the rules before you get serious about a house.

Ocean View Deck

Ocean View Deck

Alternative Uses of Vacation Rentals

One great benefit of owning your vacation rental is the ability to trade it with the owners of other second and vacation homes.  HomeExchange.com is the busiest website for arranging home exchanges.  It’s really easy to make an exchange with fellow vacation rental owners, since the exchange can be non-simultaneous. We have an annual exchange going with a family who own an Idaho mountain condo for our Pacific Beach house.  On one trip I planned out three exchanges between Seattle and Edmonton, Alberta on the way to see relatives.

Some owners focus exclusively on the corporate/short-term rental market (see OlympiaFurnishedHomes.com, for example).  These properties are rented with a one month minimum and guests will stay up to 12 months.  Vacancy can be very low, with the next tenant scheduled before the current one moves out.  People rent these furnished houses for many reasons: short-term work assignments, extended travel, extended visits to relatives, divorce, remodeling, relocation, or waiting for a house to be built.  If your rental has wireless Internet, you can tap into the growing market of people who can live and work anywhere, and who might enjoy an extended stay at a vacation destination.  Renting with a 1 month minimum lease also gets around zoning restrictions.  Craigslist has a sublets/temporary category for these rentals, search for “furnished”: Craigslist sublets/temporary and “furnished”.

Featured Vacation Rental Property

Gourmand's Kitchen

Gourmand’s Kitchen

Just south of Pacific Beach is a very special view home for sale that would make a lovely, high-end vacation rental.  At 5 bedrooms and 3,948 square feet, it would rank among the largest vacation rentals on the coast.  I often get inquiries at my 3 bedroom rental for large family groups or church retreats that need more space.  Often I have nowhere to send them.

Perched at the top of Roosevelt Ridge, this home has a spectacular view down to the beach and 20 miles out onto the ocean, drinking in the beautiful sunsets.  A short drive or longish walk below the house, you and your guests can reach the beach down the Roosevelt Beach Road.  From this point you can wander or drive over 7 miles of sand between Joe Creek at Pacific Beach or the Copalis River.  The only seastack rock between Point Grenville and the Columbia River is found here: Copalis Rock – covered in mussels and starfish and topped by nesting birds.  Also found here is the only official beach airport in the country: Copalis State Airport, where flocks of small planes will land on summer weekends.

This house is particularly well-laid out as a vacation rental or bed and breakfast (B&B).  The five bedrooms are individual suites with their own bathrooms and gas fireplaces.  A spacious, luxurious kitchen becomes the focal point for entertaining and communal meals.  A huge deck stretches the length of the back of the house for enjoyment of the view.  The house sits on 3 acres – plenty of parking and room for kids and pets to roam.

Listing courtesy of Patricia Stainbrook at Washington Coast Real Estate.

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About Bob Kelly

Experienced buyer's agent with eXp Realty based in Bellevue. I encourage my buyers to negotiate from low bids and save money. Service area is King, Snohomish, Pierce, and Thurston counties - even more widely for vacation homes. Specialties include vacation homes, working with investors, general home buyers, and listings. Based on my real estate investing experience, I can advise clients about property analysis, landlording, effective online advertising, running a vacation rental, creative financing (lease options, owner financing), flipping/rehabbing, and much more. Contact me at bob.kelly@exprealty.com.

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