Four months into a virtual worldwide lockdown for US travelers, reaching a vacation home abroad is either impossible or too risky to even consider – leaving these homeowners challenged and their homes largely abandoned.
Dream houses in far-flung regions are still extant, leaving homeowners to navigate upkeep and associated costs from afar instead of checking in – and enjoying – in person.
What was once predictable, annual travel for these owners has now been entirely upended. Is the solution to sell? Perhaps rent it out?
Or, most risky during this uncertain period, try and travel there anyway?
It’s a tricky computation of risk versus reward – if one can even get there considering the wide-ranging restrictions on US travelers.
Unable to visit for the first time in decades
Hugh Sullivan is an architect based in South Britain, Connecticut, who has owned properties on Prince Edward Island in Canada and on Tamarindo Beach in Costa Rica for two decades. This is the first time in twenty years that he does not know when he’ll be able to visit them.
Both his homes are sitting vacant, with local caretakers maintaining them until Sullivan can return.
While he has no plans to sell either, he has been advised it would be a losing proposition if he tried.
“I do not believe there is a buyer’s market for second home real estate in these countries,” Sullivan says. “I am being told by friends who own houses in Canada and Costa Rica that even if we wanted to rent the homes, the health regulations will not permit it unless the renters are legal residents of the country where these houses are located.”
For now, Sullivan is hopeful Canada will open its borders by August and that he’ll be able to travel to Costa Rica by this winter.
Renting at a loss
For those that are choosing to rent out their homes, however, it’s a vastly different market than 2019. Michelle Prier lives in Leawood, Kansas, but owns homes in Tulum and Playa del Carmen, Mexico.
While normally she lives in one of her homes during July, this year, she’s staying put stateside between concerns over Covid-19 and travel restrictions, .
“It gives me a bit of anxiety since summer is the time I go and check that everything is working properly. If there is work to do, that it is when it’s done,” she says.
Instead, she’s renting her homes out, but not at the rates to which she’s accustomed.
“Rentals have been hard; I’ve had to really discount or do longer-term to be able to rent them,” she says.
This year, “many of my houses have rented monthly from people that are coming to Tulum to quarantine or even from foreigners that live in Tulum and are renting properties they couldn’t afford before.”
Before the pandemic, her houses were completely booked, generally for four days to a week for vacation visits. This year, that type of traveler has completely dried up. Prier has had many cancellations, all of which she’s refunded 100%. But to pay her mortgages, she’s thinking about renting them out fully for a couple of years.
A vacant home
And some homeowners are simply too nervous about the consequences of renting to attempt it.
Mya Berlyant lives in Los Angeles, but has a beachfront home in Saint Maarten in the Caribbean. She was supposed to be there in May and June but was unable to travel to it once the island closed its borders.
“At first I was a bit anxious,” she says about not being able to visit, “But rather quickly it changed to being at peace. The island is tiny and as a single mom with a toddler, I would be very concerned as to emergency healthcare resources during this pandemic.”
In the meantime, the house remains vacant.
“I am too scared to even begin renting it because I don’t think it is safe yet,” she says. “I think it could cause more harm in the long run than the upside of rental income, so I’ve decided to wait it out and completely cancel the 2020 rental season.”
Missing American soil
On the flip side of this equation are those who reside outside of the United States but maintain homes there. Jay Becraft lives in Wassenaar, the Netherlands, while his wife is on a temporary assignment for her job.
The couple has a vacation home in Cape Coral, Florida, which they could get to technically since they are US citizens.
They’ve decided against a trip to Florida this summer, citing the state’s rising Covid-19 cases.
“It’s depressing, to be honest,” he says about not being able to go. “We bought the house in the beginning of January of this year and got to walk through it when it was still under construction, but we have yet to step foot in the house since it’s been completed.”
As an American living abroad, Becraft has been disappointed watching his country’s fumbled response to the pandemic.
“With Covid, the US needs to take more than a few lessons from their friends in Europe,” he says. “I love my country, but it breaks my heart things are so messed up there right now. I very much view the US right now as one of my children who is messing up in school; you still love them but you just want them to get their sh*t together already.”
Timeshare owners lose, too
In a category of their own are timeshare owners, who, if they cancel their reservations without giving sufficient notice, could be in danger of losing their rental time and not being able to receive a refund.
Jason Francisco, a travel blogger, has a timeshare with Shell Vacations Club and was planning on vacationing in Hawaii this summer.
But, with Hawaii’s mandatory 14-day quarantine earlier this spring and summer, it was impossible to travel there. Even now, reserving ahead causes Francisco trepidation.
“If I book something now, who’s to say that something might happen to my health or my family’s health between now and then? It’s a risk all around, and there are just so many uncertainties,” he says.
The future of the vacation abode
One new travel startup aims to remove some of the uncertainty involved in timeshares in the current unpredictable market. KOALA is a timeshare marketplace that allows owners to rent their time to anyone in the world.
Owners unable to travel to their second homes may opt for a service such as KOALA to recoup some of their maintenance fees, which can be in the thousands of dollars each year.
“There are over 22 million timeshare owners around the world. Before Covid, over 60 percent of these owners already struggled to use their ownerships on an annual basis and had few, if any, reliable exit options,” says KOALA co-founder Mike Kennedy.
“I expect that percentage is only increasing during the Covid-19 pandemic as many timeshare owners are senior citizens who fall within the high-risk age group for the virus and may be avoiding travel as a result.”
Surprisingly, popular vacation destinations such as Hawaii have not seen a drop in real estate interest this year.
This bodes well for homeowners who are potentially looking to offload or rent their houses.
“There is tremendous interest in second homes at this time,” says Mary Anne Fitch, a Maui-based realtor at Hawaii Life Real Estate Brokers, the exclusive affiliate of Christie’s International Real Estate.
“Year-to-date, 2020 sales for Hawaii Life have surpassed $800 million statewide; this activity is on par with last year. Since the pandemic, future travelers and potential buyers are looking for a safe place, in a low-density area that is isolated from the mainland US. Owning a second home in Hawaii, which provides the freedom to come at any convenient time, has become more attractive, whereas vacations to large hotels with crowded amenities have become less so,” Fitch says.
Vacation homeowners will not all make the same decisions in the coming months. Some will throw in the towel while others will take the longer view and stay the course.
But, with no end to travel restrictions in sight, all that is certain right now is uncertainty.