Ep 011 - How to Manage Rental and Vacation Homes
In this episode of the Be a Smarter Homeowner podcast, hosts John Bodrozik and co‑founder Beth (Elizabeth) Dodson discuss the practical challenges and solutions for owning multiple properties, including rental and vacation homes. Beth shares her personal experience of managing two homes across Maryland and California before modern technology, describing the difficulties of coordinating with renters, property managers, and dealing with time‑zone differences, manual record‑keeping in Excel, and lack of separate bank accounts. The conversation explores why home inventories are essential for insurance and renter‑damage documentation, the added maintenance complexity of vacation homes in harsh climates, and the decision of hiring a property manager versus DIY management, weighing profit margins, emergency response, and contractor networks. Financial considerations such as tracking rent versus mortgage, insurance, taxes, and remodel costs, as well as calculating a property’s tax basis for future sales, are highlighted. The hosts then contrast Beth’s pre‑HomeZada workflow—stressful phone calls and ad‑hoc photos—with the streamlined, cloud‑based, mobile‑accessible central repository that HomeZada provides for documents, photos, maintenance calendars, and financial data. The episode concludes with actionable recommendations for multi‑home owners: create a detailed home inventory, set up a maintenance calendar, and track income/expenses, especially if the property is part of a business model.
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Welcome to Be a Smarter Homeowner Podcast, where you'll discover strategies to save money, save time, and be better organized in managing your largest financial asset and biggest expense, your home. Your hosts, John Bodrozik and Beth Dodson, who are co-founders of HomeZada, have been supporting homeowners for over 20 years. They are here to share with you their tips and suggestions, as well as interviews with industry experts, with the goal of helping you become a smarter homeowner. Now here's your hosts, John and Beth.
Welcome to another episode of Be a Smarter Homeowner podcast. Today we have an exciting show for you planned, which we're going to talk about the concept of owning multiple homes. And we know that there's lots of different use cases out there with consumers who own multiple homes. Some of them own rental properties for ongoing income.
Yes.
Others will own vacation properties. Others may even be caring for an elderly parent's home, right? Where your parents may be getting older, still choosing to live in their current house. But as the adult children, maybe you're going to take on some of the management of your parents' house. So Elizabeth, why don't you kick us off with the— I'm pretty sure in your background, you were at some point in time a multiple homeowner. Can you tell us the challenges that you faced Being a multiple homeowner?
Yes, I was. And it was very challenging. I actually owned 2 different homes, one in the state of Maryland where I'm originally from and one in California where I'd recently moved. And it was super challenging. I think John remembers me talking about the challenges and a lot of it had to do with I had renters in that home, so I had to communicate with them. I did have a property manager that was helping with that process. But even that was challenging. This was many years ago, pre-technology that could help us manage our homes. And then at the same time, I had to talk to my renters and I had a time zone issue.
Mm-hmm.
And so by this, by the way, I was working all the time in meetings, traveling, and having to deal with time zones, plus address all the quirks in my house. Address all the financing that was going to whom, what, where, when. The whole thing was just challenging and I had to do all of that manually and by myself.
Yeah, well, I do talk to a lot of our customers who share the same pain as it relates to what it takes to managing multiple homes. One of the couple of keys that I keyed on, on what you said was the distance between where you were primarily living and your second home. Right. So that has a huge impact because if you live in City A and, you know, 10 minutes away, you've got a rental property, it's easy for you to be able to swing by and do stuff and sort of manage it. If it's, you know, a couple-hour drive, a little bit harder to get to. If you're clearly across the country, even more harder to get to.
Yeah.
As it relates to trying to troubleshoot anything that may be going on with a renter or with a house. And so that's kind of one big issue that I think people need to consider. when they're going to embark on multiple homes is that distance factor. And the other factor is, is what I call just the sheer volume of work and paperwork that you need to sort of manage, right? We talk a lot about on our show about all the things that you need to manage your house.
Managing one house is tough.
Right now, like, it's double the work, if not even more than double because of the distance factor and all the other factors associated with that. How did you, you know, pre-HomeZada manage all of the data and information about your renters and maintenance and all that kind of stuff?
It was hard. I think I was using Excel because I'd been in technology and I was, um, a lover of Microsoft Office. Still am. But I was using Excel, which really wasn't— it was fine, but it wasn't good enough. And it really didn't give me the alerts and reminders I needed to stay on top of all the maintenance that I needed to do, who I was going to send into the property, how I was going to coordinate with my renters and then how I was coordinating with my property manager, all the costs that were coming and going. I think I even just— it was the days of checks, so I just took in checks and I just manually managed, managed it. And I didn't even have a separate bank account for this, which is also a challenge.
Right.
I probably should have had a separate bank account just for the property. As it relates to the income coming in and the expenses going out in terms of maintenance and other things.
Now, one thing I try to talk to with our customers as it relates to when you have a rental property is the concept of a home inventory, right?
Oh, yes.
You need one for insurance purposes. But when you, when you have a renter, it's probably another reason to have a home inventory, right? Because you want to document the condition of your house prior to your renters coming in.
That is correct.
Because what if you have bad renters who damage your house?
Without a doubt.
And you want to be able to, you know, put that into your lease agreement over if they create damage, they pay for it. Well, how do you know whether it was already a preexisting condition or something that else happened? Do you recall ever having any of those sort of issues with renters as it relates to damaging the home?
So I was lucky. I didn't have terrible renters.
Mm-hmm.
However, I have heard stories from a lot of my friends and family, broken shower doors. Well, that's a big expense, but it's also risky because the renter who is there could have injured themselves. So making sure that you do document your properties prior to renters coming in, and as you change renters as well, re-document it again to keep it up to date. It's almost like when you rent a car. You rent a car and they ask you to take a look around the car, and if there's any damage, sign off on it.
Exactly.
And so why wouldn't you do the same thing with your rental properties and work with your renters about that? But I also believe that, on a side note, we'll get to that in another episode, that even renters should document their possessions in a home inventory just for those just-in-case situations.
Yeah, and it goes into the, um, maybe another follow-up question for you, the maintenance of the house, right? When you, when you have renters, did you have them perform any of the maintenance, or were you responsible for the maintenance and you sort of subcontracted that to a property manager? Or how did you deal with the, you know, I need to clean the gutters, who's going to do that kind of mentality?
Yeah, remember that episode on first-time homeowners? They now get into a home. Um, I had to manage all the maintenance.
Yeah.
I had to manage all the maintenance. Now, depending on the situation, I was able to work with the property manager at the time, and I think I had a property manager throughout the timeframe with my renters. I was able to do that. And with that said, I was able to have the property manager schedule either monthly or bi or quarterly meetings to go in and do maintenance. And I believe the property manager also had the contractors.
Yes.
At their disposal, which made my life easier. But remember all of that capital coming and going to different entities. I also now have to pay for a property manager to manage part of that house and make sure I'm documenting all the different expenses. Once again, saying that I probably should have had a separate bank account, but I didn't at the time.
So I guess a quick question then.
Could you—
when you were renting out the other house, were you making money? Was it profitable? Did you have a system to track Was the rent covering the mortgage, the insurance, the property tax, and all the maintenance expenses? Was it netting out a positive for you?
To me, so for me, yes, it did pay for my insurance expense, taxes, and mortgage. So it did cover that. Did it cover other areas like super profitable? Not necessarily.
Right.
But for me, it was a means to an end. I still wanted to retain the property. Because I didn't know if I was going to stay in California.
Yeah.
And I wanted the option to go back if that were the case. And I wanted— I love my house, so I wanted the option to go back to that house. But at the same time, I wanted to cover the expenses so that I didn't have those problems.
Right.
And so I didn't want to, like, come out of pocket because mortgages are expensive.
Yeah.
So if I segue a little bit into— we've been talking about the concept of a rental home, segue a little bit into the concept of a vacation home. Right, and there is a lot of—
It gets everybody excited.
There is a lot of similarities in the issues, but there are also some unique differences. One of them being, you know, if you end up fortunate enough to buy a vacation home as a second home, the question is, are you going to use it yourself and not have any rental income? Or if you are going to have some rental income, are you going to, you know, what seasons are you going to rent it? And you're dealing with the how many different renters are you going to have, right? Because most vacation homes usually probably get rented for a week or maybe 2 weeks at a time. So you're going to have to have more people coming and going. And that's kind of a big issue to kind of determine the use of the vacation home. Some people are fortunate to be able to use it and not have to generate rent from it.
That's right.
Others want to be able to generate rental income from a vacation home. And then what I also tell and have learned candidly from our customers is that Most vacation homes tend to be either in beach areas, lake areas, mountain areas. Exactly.
Look at me smiling. Beach, mountain, lakes. Who doesn't love that?
Right. It's the beautiful areas that you go to, right? Well, candidly, if you think about it, those areas tend to have what I call harsher climates.
Yes.
Right. So if you live near a beach, it's beautiful, but you get wind and salt in the air and sand and probably subject more to hurricanes, especially if you live on a beach on the, on on the East Coast and/or on the Gulf. If you live in a mountain home, right, you're dealing with freezing temperatures.
Yes.
Perhaps snow, right? And your main property could be in Orlando, but you've got a vacation home in the Appalachians where it could snow and it gets below freezing. And so, you've got to deal with those harsher issues as it relates to climate, which means the importance of maintenance becomes even greater. Because harsher climates tend to erode the building materials more often if you're not on top of it, right?
You realize that you just turned my smile into a frown because it's a bit of a like, oh, these vacation homes. But you are correct. It's maintenance becomes even more complex and it becomes more complex because you are managing your primary home in whatever area and you chose Orlando, Orlando is a sunny summer type-like environment with lots of humidity, by the way, which has a different set of criteria.
Sure.
But also, you have— if you go to a mountain home, it's just different. So, you have to become very aware of the unique weather patterns that are occurring And then you have to actually train your brain to have different weather maintenance activities for each home. And another good example of that is if you take an Orlando home and then you actually go to Colorado for a mountain home, because Colorado is a drier temperature, then there is no humidity. And it just changes the whole aspect of exactly the types of materials you're going to need in your home, the types of materials that construct that home. And then how you actually manage it from a maintenance perspective.
Do you have any guidance or advice on, for people who do have a vacation home, should they hire a property manager to maybe manage both the rental income as well as the maintenance, or should they do it themselves? Any guidance of, you know, maybe one way or the other or thoughts about that?
You know, I have a lot of customers and friends that manage vacation homes, rental properties, They're property investors, etc. And some property investors are also massive vacation home investors.
Sure.
Meaning they're, they're managing 10 beach homes and that's how they make their income. My personal opinion is the more homes you acquire and you want to rent out, I would suggest using a property manager unless you make that your full-time job, right? Because some people decide they do wanna make that their full-time job and they can do that. And they've just gotta stay on top of all the details. Now, there is better technology out there to help everyone do that, both on the maintenance side, but both on the cash flow management side. So, that's the first thing is I would recommend a property manager unless you're gonna make this your job.
Does that eat into your profit margin as it relates to— It does. Yeah.
More costs always do.
trade-off of time, you do it yourself, and access, being able to get to the house yourself to do those things, versus hiring somebody to do that for you. You got to take that into account in your financial projections over how much income are you going to generate from that property, minus all of the mortgage, insurance, property tax, plus the property manager's fees.
But the other thing I'd also suggest too is you're— you could be eating into your profit for By using a property manager. But the other thing is, the property managers can also deal with issues that come up at the last minute in the middle of the night. You know, maybe someone was in a hot tub, maybe there's a hot tub somewhere, and it's not turning on. And it is 11 o'clock at night in one location, and then it's the middle of the night where you are, wherever you are.
Right.
So you physically can't deal with it. Because you can't get to that home. So the property managers can take on that responsibility. That's the first thing. The second thing is the property managers generally have a lot— a network of contractors and/or service providers that they regularly use, not only to conduct regular maintenance, but those one-off situations that occur that could— like a broken shower door or something else— that they could get resolved in a much faster Convenient way because this property manager has built a great relationship with these contractors, and these contractors, that may be their sole business is working for this property manager, so they will be there as quick as they can. So I think looking at that aspect, basically serving your renters the best experience they can get, may be better suited with a property manager, and those renters will come back. year over year over year because they loved the service that you provided through your property manager.
Yep, absolutely. And maybe to focus again on the slight nuance difference between a vacation home and a rental, typically a vacation home, you're going to end up having the furnishings and electronics in it, right? Because people are going to expect a turnkey experience of having, you know, beds and linens and all those kinds of things. That gets back to the importance of taking a home inventory because you're not just inventorying the property itself and, and, you know, do people who rent your vacation home perhaps cause some damage associated with it? But it also has to do with all of the contents of the home that you furnished it versus in a rental, you're typically not doing that, right?
That's right.
Whoever owns the rental is going to furnish that aspect of it. So that, that becomes another key reason why having a home inventory on a vacation home is even more, I'd say, important. The other aspect of it is Especially with vacation homes, my general sense from customers we've talked to is they end up spending more on remodel projects.
Yes.
No matter how good you get at sort of the ongoing maintenance, a lot of them is like, okay, you know, our deck's worn out, we need to replace the deck. You know, the— we need to remodel something in the house.
Yeah, maybe buy new furnishings.
In order to make it more attractive and perhaps get a higher price point for it in terms of a rental. So keeping track of those maintenance and remodel projects tends to be more important, I think, on the vacation side. But it goes— I'm going to talk out of both sides of my mouth.
Welcome to the world of being married to Jon Pedrosa.
Yeah. So even when you have a rental, right, it's the question of like the point at which you bought the rental. Did you buy a house as a rental property that was turnkey, or did you buy it that's sort of a fixer-upper And you're actually having to do a lot of the remodels before you get into rent.
Almost like, yeah, almost like a flipper in some cases. You know, those people would want to actually take a property, flip it, remodel and flip it. But in the interim, they may incur some rental income prior to flipping it. But yeah, so that does make sense. Yeah, they want to start from scratch, build a really nice home.
Yeah. One other thing. that I'd like to point out, which is maybe a question for you. In your experience of talking to either customers or friends, when they have a second home, either a rental vacation home, do they think about already the process of they're eventually going to sell that more than their primary home? You know what I mean?
Yeah.
Should they be mentally prepared when they get into the second home and have multiple homes that they should be thinking about, okay, 2 to 3 years from now, I'm probably going to sell this thing?
Yeah, they might.
Yeah. Yeah.
I mean, most people, they may get into the rental property home situation and they may hate the process. They may absolutely hate the process. And they're like, this is too much work. It's not really panning out. I'm not making as much money as I thought I was going to make. I want to get out of this and I want to sell this.
Right.
And they'll sell it, especially if it's a vacation style home. They'll sell it with furnishings and everything in it.
Yes.
So if they bought a brand new one and they added all these furnishings, then they will basically transfer all those furnishings with the property. And can they get the furnishings included in the cost of the property? Sometimes can, sometimes not. But some people are just not cut out to be renters of vacation homes or properties, and they say that I really just don't love it.
So it's a little bit of buyer's remorse, right? I bought my second home, but this is more work than I thought. It's time to change it. I guess perhaps maybe there's the flip side of that, which is the second home has appreciated a lot and you want to basically make some money out of it. Or it's a lifestyle thing, which is, um, okay, we've, we've gone to vacation here in this spot, you know, 3 or 4 or 5 years. We've sort of been there, done that, and we want to move on to something else. So there's that lifestyle issue. And what I get to as it relates to the importance of understanding that upfront, it becomes even more paramount to sort of keep all the documentation about that second home, right?
Oh, yes.
Because if you know you're going to sell it, then it's even— you're going to need all the documentation around what you paid for it, something that I call the tax basis on the house, which is essentially, A, how much did you buy the house for? Plus B, how much did you invest in it as it relates to remodel projects?
Correct.
And you add those 2 together, that becomes the tax basis, which has to be compared against what you sell the house for. Right. Because if you, if you sell it for— if you bought it for $500,000, you invested another $100,000, you got a $600,000 tax basis. Maybe you sold it for $800,000. The delta is what you've made on that, and that needs to get incorporated into your tax situation. And the need to sort of store all that information becomes even more paramount because if you're going to choose to live in your primary home, yes, you're eventually going to do that, but it's not sort of top of mind that's going to happen as quick.
Yes, that is correct. And just as a caveat, we are not tax accountants here at HomeZada. So please review all of this with your own personal accountant in your region.
But your tax accountant will definitely ask you—
That is correct.
Of all this information. And, you know—
And if they don't, they're not doing a good job.
Yeah, fear the IRS of getting audited. And having to produce the documentation of all these sort of situations. Let's go to maybe the technology bit, kind of maybe rehash the story of Beth, right? Which is, was your experience of owning multiple homes maybe sort of the nexus over why you decided to launch Homesada?
It's part of it. Yes, it's part of it. When I had two homes, it was so frustrating. And then when I ended up selling the home on the East Coast and then continuing to manage my home on the West Coast, managing a home is just complex. I mean, I think we've talked about that. There's a lot of parts and pieces, a lot of details you've got to manage. But most importantly, and this is one of the things that I thought was really important. Is I told John, as my husband, I'm not buying another home ever again until I have a system to help me manage it. And lo and behold, here's HomeZada. It's part of one of those reasons. And like, I need to make sure for myself personally that home management is easier and more comprehensive and centralized in one location. That I can manage all these details because it is complex. And the Maryland and where I lived in Maryland, California. In Maryland, we had four traditional seasons with snow, with different types of materials in our house. In California, where we live, it can get to be 110, 115 degrees, which has a whole different set of challenges and positives that you need to manage. So. Yes, technology makes my life so much easier when I use it for the value that I see it as. And HomeZada definitely adds value to my life.
What about the concept of getting access to the data about your primary residence or your second or multiple homes, right? Which is you get the phone call from your renter or your property manager saying something's broken, right? And you're not actually home. in your primary residence, you may be out traveling for work or on your own vacation. How can you describe the before and after? How would you have handled that situation before HomeZada and how would you handle it with HomeZada?
So before HomeZada, I would have—
Stressed.
Stressed. And I would've said, okay, I would've had to schedule a call with the renters that were in my property. I would've to say, okay, go here, Go here, go here, go here.
Do this, find that.
Yeah, find this. What's a GFI? I remember I had this GFI issue in my other house. It was this quirky little thing. And this GFI, where is it? Okay, what, what, what, what's a GFI? And I'm like, oh, this is really—
ground fault interrupter circuit.
Exactly.
Which basically prevents an electrical short in your house.
So it was very challenging. And this was, by the way, Pre-mobile phones as we know them today, because yes, mobile phones have been around, but pre-as we know them today. And so you couldn't guide somebody, you couldn't be on the phone with somebody. But if I am traveling and I have something that comes out of it and I've documented everything, I can literally send photographs or videos that I've recorded about my specific house to the property manager, to the renter, to the service provider and say, here it is, here's how you have to go do this. And it's just so much easier. I do that today even in my primary home. Like if a contractor wants to see things before coming out to visit me, I send photographs that I've already taken inside HomeZada and I said, here, use these. This is what I'm looking at.
So it's the ability to have that instant access no matter where you are because of mobile phones and the cloud and the internet technology to basically access information about any one of your multiple homes at any instant.
Any instance.
Becomes a massive time saver or stress reliever of like, oh, what's the, what's the make and manufacturer of your HVAC unit? Or how do I change the sprinkler settings because the sprinklers are going off? All those different nuances, all that sort of information being centrally stored in one location accessible via any device is pretty nice.
Huge, huge. And if you don't feel like doing it, Get your kids or hire an admin to do it. Just saying, it's the best thing ever.
We've covered a lot of ground, but I'm sure there's probably more. Have you, have you thought about anything else that we haven't covered as it relates to the use case for people who own multiple homes?
No, I think we've covered vacation homes, both for rental and for personal purposes. We've covered rental homes out of necessity because someone moves from one place to another. We've covered investment property managers, and we've also covered investors of multiple properties because they too can track all kinds of data in a centralized location, which also makes it really easy for them. But I'm trying to think, we probably missed something out there, but—
I have a question for you.
Sure.
Right.
Our listeners will let us know.
There's people who own 2 homes, a primary home and let's say a rental home. But what about people that have 3 or 4 homes? Is the magnitude of the challenge even greater, or is it just the same? You just keep adding more and more homes to your portfolio.
Yeah, I think it is. Like, look, I'm rolling my eyes. I mean, I'm just like stressed out just hearing 3 and 4 homes.
I know you have some friends who are in that situation.
Yes, but I give them credit. I think they make this their full-time job. Yeah, that's what I think, and I think that's smart for them. And they have schedules of when they go visit all these homes. And some of these homes require flights. But I just— yeah, to me, that just sounds really stressful if you don't have the technology to help you do it.
We usually like to end our shows with action items for people, let's say, who currently own multiple homes. What action items might you suggest as kind of a summary?
Well, I think one of the biggest things is take a home inventory. I think you're right. I mean, taking a home inventory of the structural component of the home, whether or not you have furniture in it because it's a vacation home or not, whether it's literally empty space that you're renting to somebody, take a home inventory of your home before renters come in. And then between renters, long-term renters that you're having.
Okay. Yeah, my action item is the maintenance calendar. Right. You just cannot— the human brain cannot remember all the things that you need to do and when you need to do it for your primary residence. You add on top of that the rental property, and it's oftentimes out of sight, out of mind.
Yep.
Meaning when you live in your primary home, you've got the ability to kind of see things like, oh, notice conditions that are changing. When you have a rental or vacation home, you're not physically there as much. So if you don't have something reminding you of those things that need to get done, it can create a lot more downstream problems. Any other sort of action items or do you want to close this out?
No, I think that's enough to get people started.
Okay.
I think it's enough. And then once they, once they get started, they will then be able to use other areas of either HomeZada or help them manage their, their properties. I eventually think that they will need to also track the income that's coming in if They have that as part of their business model.
Excellent. Yeah, I'm kind of done today too as well.
Me too. I mean, it's been great. So thank you all for joining us on this episode of Be a Smarter Homeowner Podcast. If you love this or found value in this, please share it with all your colleagues, friends, and family. And by all means, please rate us on all the major podcast platforms. And then once again, we want to help you be the best homeowner you possibly can with Be a Smarter Homeowner Podcast.
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