Are We All Landlords Now?

Central banks inject billions more in cash

Central banks in Europe, Asia and the U.S. injected billions of dollars into banking systems Friday, moving to further boost liquidity in markets suffering the ripple effect of the subprime-credit crisis and saying they stood willing to provide more cash.
The European Central Bank said it had provided 61 billion euros ($84 billion) to banks in a three-day tender offer, and the U.S. Federal Reserve carried out two three-day repurchase agreements totalling $35 billion, while the Bank of Canada injected C$ 1.68 billion ($1.78 billion).
In Asia, the Bank of Japan supplied 1 trillion yen ($8.48 billion) after a rise in the overnight call rate. And The Reserve Bank of Australia added A$4.95 billion ($4.17 billion).

In Credit Crisis, Large Mortgages Grow Costly

When an investment banker set out to buy a $1.5 million home on Long Island last month, his mortgage broker quoted an interest rate of 8 percent. Three days later, when the buyer said he would take the loan, the mortgage banker had bad news: the new rate was 13 percent.

The investment banker’s problem was that he was taking out a so-called jumbo mortgage — a loan greater than the $417,000 mortgage that can be sold to the federally chartered enterprises, Freddie Mac and Fannie Mae. The market for large mortgages has suddenly dried up.
NY Times

Lets consider the management of a vacation home, now that the credit crunch makes it a difficult to sell. Owners will be seeing themselves as landlords and that is a very different role. Your Property Path has a ton of articles on property management, if your new to the game then this is a good stop.

How to Manage a Vacation Home

Do you need it
Absolutely. I have a friend with a second home in Idaho. They have a beautiful home on a small ranch that is for Christmas and summers. Its a short hop from northern California and its a beautiful state with inexpensive land values.
After being away from the ranch for most of the winter, the family arrived only to find that there had been a leak in the kitchen which had dripped for many months. Well, you can imagine the damage. The leak had wended its way from the P trap below the kitchen sink to flood the lino floors. It then slowly worked its way into the hallway and the floor boards of the first bathroom. The damage was extensive.

The Damage
First the lino had begun to lift up and the floor boards below were wet and molding. The lino had to be removed and the floor boards had to dry. Then a mold cleaner was professionally applied by a local company to be sure the family wasnt exposed.

Then the floor boards in the hallway had to be replaced because they were thoroughly wet and moldy. They would no longer lay flat and simply had to be pulled up and new boards laid down.

The entire house had a wet damp smell that would not go away. A wonderful family experience was ruined because they did not have anyone watching the home during their long periods of absence

The Cure
Get a property manager. There are companies that offer management for vacation homes. They do manage a little differently, because they are vacant for long periods and therefore they must be visited. Property management firms in rural or vacation areas have services designed to deal with the vacation homes special needs. In addition to all the general property management needs all properties require.

Howard Bell for

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