Perched on a mountain crest in scenic north Georgia, Jerry and
Marilyn Weisenseel's new summer home offered solitude along with
the cool nights of the Blue Ridge Mountains. The perfect escape
from Florida's hot, humid summers.
When a consulting job led them to Denmark for six months, the
Weisenseels decided to rent out their little bit of heaven. Having
leased their beach-front condominium for several years, they felt
comfortable when approached by a local real-estate agent.
"We were promised handsome rents if we would be willing to rent
short term," says Mr. Weisenseel. "By renting the house for holiday
weekends and one-week stays we could earn all of our monthly
expenses in just one week."
For casual landlords trying to cover the expenses of a second
home, renting may seem like a good idea. A May report by the
National Association of Realtors indicated a record 377,000 second
homes were bought by Americans in 1999, up more than 9 percent from
the previous report, in 1997.
About half were for at least part-time rental, says an NAR
But the cost of renting out such a home may be too great in terms
of physical damage and emotional wear and tear.
Unless they employ caretakers, rental-property owners who live
any distance from their holdings can have a hard time learning
about such problems as water damage, break-ins, or fallen limbs.
They can also have trouble policing short-term tenants.
Returning from abroad, the Weisenseels heard neighbors recount
stories of strange chanting coming from their house on several
weekends. They found their dream house in shambles. The wood floors
were gouged, the furniture moved all over the house. Candles placed
in the open beams had dripped down the paneled walls.
"Because these were short-term rentals, there was no prescreening
of tenants, no leases or security deposits. The real-estate agent
set up the rentals and collected the rent, but was not responsible
for damage done by these short-term renters," says Mr. Weisenseel.
Still, this experience did not deter the Weisenseels from
investing in rental properties. It did, however, lead them to take
a different tack.
When their accountant recommended real estate as a way to
diversify their investment portfolio, they went shopping for small
rentals. After looking at several properties, they settled on a
modest duplex and fourplex to get them started.
"So far, so good. Our son-in-law helps manage the property and I
keep the books," says Mrs. Weisenseel.
During the first half of the past century, before the Internet
and Silicon Valley, real estate created more millionaires than any
other industry. …