The typical second-home buyer is a baby boomer, according to a 2010 survey by the National Association of Realtors.
About 25 percent of second-home owners rent out their properties, the survey found. The rest use them for vacations and weekends an average of 50 days per year and otherwise, the properties sit vacant. Some 26 percent intend to use their property as a retirement home eventually
I looked this up after I had an interesting conversation with Brent Hieggelke, president of Second Porch Inc., a small enterprise he started on Facebook.com that has grown into a full-fledged Web-based business that helps second-home owners manage informal rentals.
Hieggelke says he and his wife bought a vacation home on Mt. Hood, about an hour from their full-time Oregon residence. After the real estate meltdown, they found themselves owing more than the property was worth. They didn't want to rent the home to strangers, so they began offering it for rent to friends and family, including those on Facebook. The approach worked so well that Hieggelke developed first a Facebook app, then a website that automated the process.
If you're looking for a house to rent, you can sign up on SecondPorch.com and allow it to use your Facebook account to identify people you know -- or who your friends know -- who have second homes for rent. The app brings up the properties, the people who are offering them for rent and your friend who is your connection to this landlord. I was surprised to find that I had at least 50 friends and friends of friends with second homes for rent in locations all over the world. Hieggelke says the average person has 130 Facebook friends, each of whom have 130 friends of their own, which multiples to 16,900 people who potentially could be second-home landlords.
It's free to search for a rental and it costs $10 per month to list a home for rent. The venture has been so successful for Hieggelke that, at the end of 2010, he got $650,000 from the Oregon Angel Fund to expand the business, and he's now employing eight people.
Renting out a second home a few weeks a year isn't going to make you wealthy, but it could be a small part of your retirement planning. Most of the people who use Second Porch aren't trying to maximize their income, Hieggelke believes. He thinks they are just trying to rent the home when they are not using it to offset the cost of owning it. "Owners can rent their homes to friends for 14 days a year, tax free. Since the average second home is owned for about 10 years, this is likely equal to $50,000 in cash earnings over the ownership cycle," he says.