Colleen Mahon loves having people over for Derby. She stocks up on bourbon, keeps a Derby Pie on hand and makes sure her bedrooms are comfortable for her guests. Then she makes the place spotless, cleaning as she rolls out the door, wheeled suitcase in tow. Not only does she miss the party; she never even meets her guests. That’s because she’s one of at least 100 locals who advertise to temporarily turn over their homes to out-of-towners for Derby weekend.
It’s a tempting enterprise. Mahon pockets close to $7,000 for renting her four-bedroom on Alfresco Place, near St. Francis of Assisi School in the Highlands, from Thursday afternoon to Sunday morning. Cheri Sims, a realtor for Wakefield Reutlinger, rented her Cherokee Triangle home for the first time last year and took in about the same amount. The 59-year-old says she needed new carpet at the time, and that the chunk of change paid for it. Preparing her house for guests is a small price to pay for untaxed income. According to the IRS website, money made from personal property is only taxed if it is considered a business, which means the property owner is “involved in the rental activity with continuity and regularity.” It’s fitting that the Derby happens once a year and attracts fat pockets and a high demand for accommodations. Who needs to win the trifecta when you can put down the cost of fresh towels and sheets and take in even more? (By the way, last year’s $2 Derby trifecta payout was $6,900.)
According to a red “rented” stamp on a listing from kentuckyderbyhomerental.com, as of late February one house had already rented from Thursday to Sunday of Derby 2014 . . . for $10,000. Nestled between Lexington Road and Grinstead Drive just north of Cherokee Park sits the modern-style house with a pool, deck — the works. The highest price tag is $20,000 for a Prospect home listed on another site, louisvillederbyrentals.com. Hey, maybe the homeowners are trying to update their kitchen or travel through Europe, or maybe they’re re-thinking a hefty mortgage. Jeff Watts-Roy, who owns and runs louisvillederbyrentals.com with his wife Diane, says, “Unless someone from Dubai flies in last-minute, those will remain occupied only by the owners at Derby time.”
Why would visitors pay an average of $6,000 to rent a home for the weekend instead of staying in a hotel? First of all, people come in groups, and the odds are against you to score a set of rooms available for that price from Thursday through Sunday on Derby weekend. If you’re considering staying in the cluster of chain hotels between Churchill Downs and the airport, you’re still paying $700 to $1,000 a night for one bedroom at a La Quinta or Holiday Inn. As of mid-March, the Seelbach had two rooms available, ranging from $4,400 to $4,800 for the three-night stay of Derby weekend. The Brown has Derby packages starting at $4,600 for the weekend for one bedroom, and doesn’t usually fully book until April. Downtown’s world-famous boutique hotel-slash-art museum, 21c, had one room remaining as of mid-March. The two-bedroom, 2,500-square-foot rooftop apartment, which includes a sizable terrace, is priced at $11,000 a night, plus tax, with a three-night minimum stay. (Hmmm, that home in Prospect is starting to sound like a steal.) That does not represent the price and size of every room in 21c, but few hotel options remain this close to Derby for larger groups of on-a-whim out-of-towners.
The home-rental route is appealing to both owners and visitors. If Mahon’s house rents for 2014, this will be her fourth year in a row. Over the past five years, the owners of the aforementioned rental websites have seen increases in the amount of homes rented out. Zach Everson, a freelance writer, editor and consultant now based in Washington, D.C., and creator of kentuckyderbyhomerental.com, first advertised and rented his own house on Lauderdale Road in the Highlands near Cherokee Park in 2010 and got $5,500. The next year, he rented five houses through his site, and 24 last year. The renting price on these websites for Thursday to Sunday of Derby weekend ranges from $3,000 to $6,000. Everson charges $250 per listing (that’s $11,000 just from the 44 that advertised last year), while the Watts-Roys charge $19 to $29 (depending on site placement), plus 20 percent commission, if the house rents, the first year; 15 percent commission the second year and 10 percent each year after that. So far this year, Everson’s site has 39 homes listed and the Watts-Roys’ has 40.
Airbnb.com lets homeowners around the world rent anytime, not just for Derby. As I search for an eight-person stay from May 1 through May 4, this year’s Derby weekend, 15 listings pop up. For six people, the number goes to 30 listings; for four people, the number jumps to 46 listings, which includes the same houses that can rent up to eight people. On eventhomes.com, the 2014 Kentucky Derby is one of 13 world events with home-rental listings. Only one home is listed for Derby, but it’s joined by homes advertising for the next Super Bowl, the Ryder Cup, the Indy 500 and the 2016 Olympics. Fifteen of the 29 listed on Everson’s site mention that they are available for this summer’s PGA championship tournament at Valhalla Golf Club east of Middletown. The Watts-Roys have a separate PGA-themed website that lists all 40 of the same houses on their Derby site. If you’re keeping track, there are 126 listings for this year’s Derby, including a few houses advertised on multiple sites. These numbers don’t account for the untraceable number of homes rented to friends of friends, advertised only by word of mouth.
Cheri Sims’ son has a friend from college with high-end clients who were interested in coming to last year’s Derby. The crew flew in from Dallas on a private jet, carrying armloads of hatboxes and clothes. They hired a private driver and managed to get into a few good restaurants. “They also picked up some steaks at ValuMarket and cooked,” Sims says. Last year was her first time renting, but she says she would absolutely rent again, though she has since moved and is in the middle of remodeling, so this year is a no-go.
Bill Chandler, a retiree from the investment business, and his wife Betsy have lived in their home off River Road for 10 years. The previous 25 years they lived at the other end of Blankenbaker Lane, closer to Brownsboro Road. They first viewed the riverside house on a gorgeously sunny day, and light shone through the home’s back wall of windows. The 72-year-old says he got halfway down the front hallway and the river view through the back windows sold him.
Not long after the couple moved in, a colleague of Chandler’s came in from New York and had a chance to see the home’s setting and decor. By the time the next Derby was nearing, the guy called Chandler, said he had rented a box at Churchill for the next 10 Derbies and wondered if Chandler “knew of anyone who might want to rent their house.” The idea hadn’t occurred to Chandler to rent for Derby, but because he knew and trusted the guy, he offered up his own house. That was in 2005, and the couple has rented to the same man every year since, sometimes housing 10 people at once. “They’ll cook here and grill out, sip cocktails and smoke cigars,” Chandler says. “They have a grand old time.” He says he and Betsy don’t charge as much as they could probably get for their 4,000-square-foot home, and that Betsy gives the money to a charity called the Bluegrass Center for Autism, which she founded through their church, St. Andrews Episcopal.
Most of the houses that rent come from likely neighborhoods: the Highlands, Crescent Hill, Old Louisville, Anchorage, Prospect, St. Matthews, with maybe some downtown digs thrown in here and there — areas with charming Kentucky homes and residents with enough money to keep them looking like new. Most of the homeowners will tell you (and it’s evident when I walk into these houses with only a day’s notice) that the houses must be flawless, as though they’re going on the market for sale. It’s a niche business, and every house hunter is looking for the same set of deal-closers: a desirable floor plan, walkable neighborhood, updated decor, outside amenities such as decks, patios and grills. (Pools are a bonus.)
Diane McKim, a Louisville resident since 1991 who has lived in the Highlands since 1993, rented her house for the first time last Derby through Everson’s website. She says that the house she lived in a few years back wasn’t set up for guests. It had a steep staircase, a bathroom that could only be accessed through another bedroom, and was not within walking distance to coffee shops, restaurants or groceries, unlike her current house on Sils Avenue, off Bardstown Road in Douglass Loop. McKim, a JCPS teacher who is in her 40s and has kids that are grown and out of the house, says she writes directions for everything: to the Downs, to restaurants, to the five or six remote controls that go to her TV. “Someone’s coming into your home with a vacation mindset,” she says, adding that she essentially turns her home into a private bed and breakfast. “If someone wakes up with a headache or forgot toothpaste, they’re a block away from a pharmacy,” she says.
House renting seems to attract perfectionists. When I sit down on the couch in the living room of Mahon’s impeccably decorated 2,500-square-foot home, I’m greeted with freshly steeped tea — loose-leaf, not bagged. The place smells fresh, a little sweeter and warmer than a sterile hotel. Maybe this is just what regularly dusted draperies and vacuumed upholstery smell like, though an inoffensive-scented candle may be burning in another room. Mahon, 50, is no stranger to organized party planning. She founded and runs the business Orchestr8, which specializes in event production and marketing consulting.
As we sit by the gas-log fire, Mahon tells me all about what goes into prepping the house for overnight guests. “All these things that bug you about your house, that you put up with, (renting) forces you to fix them, to touch up paint and do a major clean once a year,” she says. She performs what she calls a “deep clean” of her home, akin to a Hollywood actress’s pre-Oscars detox. She cleans out the closets to make room for guests, makes sure there’s nothing underneath beds and locks away personal items in the attic. She keeps a set of rental-only sheets and towels.
As we walk through the house, Mahon points out a label-maker-printed directive that has been taped to the wall. It reads “hallway light” and has an arrow pointing toward a thin space between the wall and a cabinet. “I have everything labeled,” she says. “Who’d think to look behind here for the light switch?” She’ll leave current Derby glasses — souvenirs — with a bottle of Woodford Reserve and muffins for the first morning. “I’ve been told I overdo it, that I need to dial it back,” she says. People have this idea of the Derby and Southern hospitality, Mahon says, and she tries her best to provide that for guests. She says that sometimes she can’t even tell that anyone’s been in her house; other times she’ll see garbage bags full of bottles. “The bourbon’s always gone,” she says. “Sometimes the muffins are still here, but the bourbon’s always gone.”
Once inquiries come in from out-of-towners, Mahon says she’ll Google the people or check LinkedIn. “I’ll make sure they’re upstanding citizens,” she says, half-jokingly, adding that most people with that kind of money to spend are responsible professionals and not “rock stars.” Renters must then sign a contract that’s binding by law and put down a security deposit — the details of which can be determined by each homeowner individually, unless they advertise through Airbnb, which has its own rules. For $69, those who advertise with the Watts-Roys’ site can get an insurance policy that covers $3,000 in accidental damage. You know, in case someone spills expensive wine on an equally expensive carpet. Everson’s site suggests that homeowners obtain a 20 percent security deposit, or the cost of the homeowner’s insurance deductible, in case anything does go wrong, though none of the homeowners report anything disastrous and each says they would do it again if they haven’t already. “I think it’s a brilliant idea, and I’m surprised more people don’t do it,” Mahon says. “A lot of people are resistant to having people in their house. I couldn’t care less.”
But how realistic is all this? Where would you go? Would you become a squatter at the office all weekend? Take the money and skip town for Jamaica? McKim’s mother lives across the river in southern Indiana, and McKim and her partner and their cats and dogs visit there for the weekend. If anything does go wrong she’s only 40 minutes away, but she hasn’t run into that problem. Mahon visits her boyfriend, who lives in Los Angeles. She has teenage kids, but so far the Derby has happened to fall on the week that they stay at their dad’s house. She tells her neighbors that she’s renting for the weekend, but otherwise leaves guests to enjoy themselves. The Chandlers have traveled all over, often visiting their grandchildren in Atlanta. Bill Chandler says he probably wouldn’t rent to strangers, and that his friend leaves the place in better shape than when they left. “I think he probably wants to be invited back,” Chandler says.
It’s not as though these residents are miserly Derby scrooges who love to skip town to avoid the traffic, gas prices and general fun. Sims doesn’t even leave town. She stays with friends in Anchorage who have named their guest bedroom “Cheri’s room.” They go to the track and celebrate in full. Even though Mahon is usually on the opposite side of the country, she still goes to a sports bar and sings “My Old Kentucky Home.” “There’s so much more to Derby than those two minutes,” she says. She’s gone to rooftop parties for Thunder Over Louisville and has hosted a hat swap with her girlfriends. She leaves a guestbook behind for visitors to share their stories. It’s packed in the attic along with the space-saving air-compression bags holding the rental-only sheets and towels, but Mahon says guests have written about their bucket list experiences and walks through the neighborhood to the Barnstable Brown party on Derby Eve.
Down in Atlanta, Bill Chandler’s daughter, Elizabeth Stone, and her husband Brian make their “party of the year” a Derby party, inviting 50 to 75 of their friends and their friends’ children. Chandler says that he remembers the first time his parents took him to the Derby in the early 1950s when he was 10 years old. “I picked the winner, I think,” he says. “If you grow up here and have any interest, wherever you are on the first Saturday in May, you have to have a TV on, have a mint julep in your hand and cry when they sing ‘My Old Kentucky Home.’”
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