By: Mike Kennedy April 17th, 2008 Category: Deep Creek Lake Buyer Info, Vacation Rentals

If you currently own a vacation rental home at Deep Creek Lake or considering purchasing one - there are a few interesting trends and insights that continue to evolve in our resort real estate market.

RENTAL BOOKINGS UP

Railey Mountain Lake Vacations reports that rental bookings are up about 7% this year compared to last year - even with the price of gas reaching record highs. Most local business owners have said that the Deep Creek Lake area actually benefits when the price of gas goes up - the reason being is that vacationers from Baltimore/DC and Pittsburgh actually choose to drive the shorter distance to Deep Creek for their summer vacation as opposed to the Outer Banks, Myrtle Beach, the Grand Canyon, or Disney World in Florida.

Larger Rental Homes Still Doing Well

Another trend reported is that the larger homes (8 or 9 bedrooms), with amenities such as an indoor pool, are still doing extremely well - and most continue to see annual owner gross rents increase. In fact one of the larger “pool houses” with an incredible lake view will probably generate gross rents in excess of $200,000 in 2008 - which would be the first time a rental home has broken that barrier. This proves that you don’t really have to be lakefront to be one of the better rental homes - an incredible lake view is something most renters desire.  Since most of these larger rental homes get rented on the weekends during the non-summer months - Railey Mountain Lake Vacations is now pushing mid-week corporate retreats that will probably increase the gross rents even higher in these homes.

The “WOW” Factors

If you are considering purchasing a vacation home at Deep Creek Lake and want to maximize rental revenue below are the ”wow” factors that make a good vacation rental home;

• Updated and Above Average Decor - this may be the most important thing to have in your home. Renters want a certain standard of furnishings in a home they rent. This can make a tremendous difference in the amount of rental income you can generate.
• Lake Front or Lake Access Setting.
• Log Cabin - people really like that warm, cozy feeling of a cabin in the woods.
• Big Views of the Lake or Mountains - people want to be blown away by a view they can’t get back at home.
• Private Indoor Pool.
• Home Theatre.

Some factors that detract renters - or the “Un-Wow” factors (if that is such a word);

• The setting is “too” residential.
• Duplex/Townhouse/or Condo - most renters want privacy on their vacation.
• The Interior and Decor are below minimal standards.
• No Access to Deep Creek Lake.

Real Estate Opportunities

Railey Mountain Lake Vacations reports their is still great rental demand for larger rental homes at Deep Creek Lake - 8 bedrooms or more. Our inventory of larger rental homes has not grown much at all since 2003 when more restrictive zoning measures were enacted. Their are still opportunities in this current real estate market to take advantage of this trend. You could (1) buy an existing rental home for sale that already has good rents, (2) buy a really good lot and build, or (3) buy an existing home for sale and modify it so it can be a good rental. Finding an existing rental home with a high rental history is sometimes difficult - the good ones usually get snapped up right way. The more likely path to owning a good rental home would be to either build a new house or renovate an existing one. New construction obviously has a time element involved - but there are currently some really good lake view lots for sale at price points that could make sense building a new house - even if you have the added cost of a sprinkler system and other fire code measures that are required today.

Modifying or renovating an existing house is certainly another option to consider. One of our clients purchased a lake access home with a decent view of the lake a year or so ago - then added an indoor pool and now has annual gross rents exceeding $90,000. 

We hope these vacation rental trends continue. No one would have ever predicted the houses with indoor pools would have annual gross rents between $150,000-$200,000 - but it is happening. What’s the next big thing for these rental homes? Who knows - maybe an indoor bowling lane?

By: Mike Kennedy March 28th, 2008 Category: Deep Creek Lake Buyer Info, Deep Creek Lake Market Update, Deep Creek Lake Real Estate

An article about buying a vacation home recently appeared on the CNN/Money.com website. It’s a pretty good article - and is basically about how right now is a good time to buy a vacation or second home. The author also does a good job of giving tips on how to buy a second home - from identifying the primary reasons you may want to buy a second home to suggesting that you first rent in a resort area to see how well you like it before taking the plunge and buying. 

We certainly agree with the main aspect of the article - that it is a great time to buy property at Deep Creek Lake and in Garrett County - interest rates are down and demand certainly isn’t as high as we had previously seen during our boom years just a few years earlier. These two factors can certainly help the chances of a prospective buyer getting better terms. In fact at the end of last week one of our clients locked in an interest rate of 5.625% on a conforming loan that they will be using to purchase their lake view vacation home.

However, there are a few things to point out in this article that just don’t relate to the Deep Creek Lake real estate market.

First, the author tries to generalize that all second home markets are “soft” right now. While demand is down slightly from our boom years - “soft” is hardly the case here now. Just in the last three weeks we have closed on a lakefront house at Sandy Beach for $1,379,000 (that had competing offers), a timber frame home atop Wisp Ski Resort for $1,250,000, a lakefront house on Marsh Hill Road for $880,000, and two other lakefront homes for $865,000 and $750,000 respectively. And just today one lakefront house in our market had 3 competing offers! I would hardly classify this type of activity as being “soft”.

Another thing the author tries to generalize is that the appreciation rates in all resort/second homes markets declined in 2007 - or are expected to decline in the near future. Once again, that’s not accurate for the Deep Creek Lake market. In 2007, the average sold price for a residential property in the Deep Creek Lake area was up approximately 4% over the average sold price in 2006 - from $537,498 to $559,168 - a modest gain - but at least a gain unlike other second home markets.  It is accurate to say that the value of a piece of property at Deep Creek Lake has held up much better than a property in other resort markets - such as Las Vegas, the Atlantic Coastal beach areas, and Florida just to name a few. This fact is just another reason to buy here at Deep Creek Lake - where historically the appreciation rates have done much better and should continue to do better than other resort areas. The main reason being that the lake is almost fully developed now - there just a few smaller tracts of land that have frontage on Deep Creek Lake or have access that can ever be developed in the future. Low inventory and continued demand should continue to fuel appreciation for lakefront and lake access homes in our market.

By: Mike Kennedy February 27th, 2008 Category: Deep Creek Lake Buyer Info, Deep Creek Lake Real Estate

If you are thinking about purchasing a lakefront home for sale or real estate at Deep Creek Lake there are some very important things to pay attention to during the buying process.

The Setting and Lake Frontage

First and foremost, it’s important to understand that not all lakefront lots and parcels at Deep Creek Lake were created equally - some are level, some are flat - some have lots of trees that block the view from the house, some have wide open expansive views of the lake - some are very private, some the neighbor’s house is very close - some have good water depth most of the year, some are tucked back at the end of cove and have no water depth after Labor Day each year - some have 100 feet of frontage which is the norm, some have between 50 and 100 feet of frontage, and some have 200 feet or more of frontage.

Obviously the homes and lots that are mostly flat, have wide open lake views, have more than 100 feet of frontage, and are private will cost you more. But the good news is that the ones with the premium settings have shown a tendency in the past to appreciate better in the long run. 

Everyone’s preference to setting is different -and there will probably be trade-offs that you need to be make along the way - but when you are looking at a lakefront house just keep one little thought in the back of your mind - you can always change the house but you can’t change the setting.

Boat Dock Type

Most lakefront home and properties around Deep Creek Lake have a Type A Dock. What in the heck is a Type A dock you ask? Well, it’s simply the designation placed on the dock structure and permit provided by the Maryland DNR. A Type A dock is allowed to have 2 power boats and 1 non-power boat moored at it.

The lakefront homes and lots that don’t qualify for Type A docks will usually have access to a deeded boat slip in a Common Boat Dock somewhere in the neighborhood. You will usually see these advertised as having a Single Slip. These common docks are not private though - meaning you are usually sharing it with a few neighbors and the prices for these types of properties are usually a little less overall than those with a private dock.

Believe it or not there are actually a few lakefront homes and lots around the lake that don’t qualify for either a Type A dock or have a deeded boat slip - but these are few and far between.

Buy-Down Parcel

Take note of whether the property you are looking at has acquired the Buy-Down parcel from the state of Maryland or not. We covered some of the basics of the Buy Down in this post. You can’t do much with the Buy-Down other than say you own a little more property - but there a few benefits to owning it - 1. You can get what they call “relaxed” standards if applying for a zoning variance and 2. if you are on a septic field and it fails, you can apply to the state to get permission to extend your drain field in to this parcel. So overall there is some benefit and value to owning the Buy Down parcel.