Five Questions With: Jim Durkin

Jim Durkin is owner of Durkin Cottage Realty in Narragansett, which owns or manages about 200 houses for winter, year-round and seasonal rentals. The business was begun in 1945 by his grandfather, James P. Durkin. In a recent interview, Jim Durkin discussed the market in Narragansett.

PBN: How is the 2015 summer rental season shaping up so far, has it been about the same as previous years or is it even more tight for rentals near the shore?
DURKIN:
We had a slow start to the summer season. The Fourth of July and that last week in June, it was really busy around here, but it wasn’t 100 percent occupancy. Since the second week of July, we’ve been pretty full … [but] we still have vacancies for every week in the summer. We still have availability beach front, in good locations. We have a lot of inventory. I have to think that it’s a good summer, it’s a little better than last year.

PBN: Have you seen any impact so far from the new state sales tax on short-term vacation rentals?
DURKIN:
The impact of the real estate tax hasn’t really affected us this year, except maybe made people confused if it was going to apply to them. I’d say 90 percent of our rentals were booked prior to July 1. Only people who were booked after July 1 were affected. It’s too early to tell what the effects will be of the tax. We’ll really know when people start booking for next year.

PBN: In terms of sales, what trends are you seeing in people who want to buy in Narragansett?
DURKIN
: Sales are strong. They’ve been getting stronger for the last couple of years. They are not like they were, obviously, in 2005 and 2006. I remember the lights went out in August 2006. Nobody bought anything after that for five or six years. But that’s picked up a lot. It’s always the areas that are close to the water and in nice locations that seem to have an increase in price. The houses that are good rental income are always in demand.

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PBN: Winter rentals are a large part of the South County market because of nearby University of Rhode Island. How do you decide if a group of students would be good tenants?
DURKIN:
With students, sometimes it’s a gut feeling. Generally, good references and good grades and good credit means good tenant. Sometimes we’re surprised by that. I would say 90 percent of our students are no issue. Of the 10 percent that are an issue, there’s a very small percentage of them that are really, horror show. Generally, we’re very happy with our students. Still a high demand area for students.

PBN: In some college towns, parents buy property when their children enter college, and they become the landlord. Is that happening in coastal Rhode Island?
DURKIN:
There are a lot of people who are smart enough to buy a house and let their children manage it. It’s common enough. It’s not an everyday occurrence. It’s a small percentage of people who buy a house, who live in New Jersey, for their kids to live here for four years. It’s common enough but not real common.

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