Mark Spurgeon joined the staff of Boca Grande Real Estate just out of college in 1980 and has operated the business since 1984. Having grown up on Boca Grande he knows the ins and outs of island living having lived 35 years of island history. A family man with five daughters, a volunteer and outdoors man, Mark offers a deep resource of information and experience in this interview on vacation rentals.
How long have you been in the Florida vacation rental business and how did you get started?
My business partner, George Arehart, was a developer who built the first the first group of townhouses, Seagrape Colony, on the beach of Boca Grande in 1977. The vacation rental business developed as a natural service to Seagrape Colony owners to help pay for expenses, and at that time second homes were viewed as tax shelter. In 1986 tax laws changed that. Now owners primarily rent to offset expenses like taxes and insurance.
When operating income properties, ideally, investors would like to see their properties become income producing. However, prime vacation rental markets have enjoyed good appreciation in real estate values, and owners understand the added cost of being located in a prime location.
Vacation Rentals Legal Parameters
Are there legal parameters in operating a vacation rental business?
From that standpoint, first we were regulated by the Department of Business & Professional Regulation (DBPR) and the Real Estate Commission. Today we are also affected by the Florida Division of Hotel and Restaurants statues that regulate that part of the industry. We also have to comply with the Department of Revenue to collect and remit sales tax and the IRS for submitting 1099s and 1042s.
How do customers find you and what type of advertising do you do?
Word of mouth and repeat business is our main source of business, but we do advertise in travel-related publications. We also do advertising with state and country visitor convention bureaus. Today, print media is so expensive and fragmented. The internet is the most effective and cost-effective source in the industry.
Do you think having a web presence is important?
If you don't have a web presence these days, you might as well prepare to go out of business.
What do vacationers look for when seeking vacation rental accommodations and how do you market to reach potential customers?
Number one thing people are looking for is a unique destination, and secondly something that is a value. Boca Grande, Florida is a unique destination because of its unspoiled nature and the fishing is good. The other side of that is we offer townhomes and other properties that offer people more space. They can do their laundry, and we provide an eat-in kitchens and other facilities. People can sit on their porches and enjoy sunsets. Guests can stay in a fully-equipped facility for less than what it costs to stay in a hotel. This adds value.
Resources Available to Potential Customers
People have an idea of what they will receive when staying in a hotel. Do you have resources available for people to research rental accommodations online?
When we enhanced out website we did two things. We added photos of all of our unit interiors for each specific unit, and that unit has an availability calendar to look at. Once perspective guests narrow that down, they can call our office and speak with our reservationists who can put the rest of the pieces of puzzle together. Before we made these upgrades, guests making a reservation may have had to talk with a reservationist 20 minutes to find what we have available. Now people looking for a vacation rental can evaluate that information before they call to make their reservation.
Adjusting to Varying Seasons
Vacation resort areas tend to be seasonal. How does this figure into your market plan?
We definitely have a seasonal business, but south Florida has a little longer seasonal business; we still have nice beaches in the summer. We have about seven months of potential rentals with peaks at spring break and holidays, but more people have to become flexible with travel schedules in order to work around the demands of school schedules and children's activities.
Outside peak season, we have more bookings in November than we have in August. There aren't as many high peaks and low valleys as there used to be. We are getting more business in the off season. In fact, there isn't any month when we don't have activity.
We also offer sales that complements our rental activity. It's natural, if guests want to make a deeper financial commitment and purchase. All of our guests receive a sheet of all properties for sale, so if they have any interest, they can look around while on vacation to see what opportunities exist.
Because we deal with so many people throughout the year, we are in contact with many prospects who eventually may purchase. This adds strength to our sales/listing services.
Starting a Vacation Rental Business
Do you have any advice for people who want to start a vacation rental business?
Make sure the structure of the company is set. You can't just go out and get a bunch of rental properties and expect to start a business. Cover the basics. Have experience in handling property for other people. You need to be good at accounting, public relations, and like people. You have to deal with a lot of people. Providing vacation rentals is handling an important part of peoples' lives. My rule of thumb is not to acquire more rental properties than I can service for owners and guests. Success and good reputation is built on talking care of a few and growing from there.