Those of us who own cottages are occasionally tempted by the lure of big money that we think can be made renting our cottages to others as a vacation getaway. We hear stories of so and so renting out their place and getting an astronomical weekly rate, sometimes in the $1000’s of dollars. It doesn’t take much thinking to realize that if you rented your place out for say, 8 weeks in the summer, you could make enough to do some serious renovations, pay the taxes and maybe even upgrade the cottage speedboat.
Those are the typical thoughts I get whenever I consider the idea, of course not considering things like, where to find good families to rent the place to, increased insurance costs, damages to the place, monitoring just what is going on there while I am not there, and so on. Add to that, unhappy renters for whatever reason, bounced rent cheques, stolen personal items, and neighbors who may not be to happy with you, depending on who you rent your place to.
And the biggest cottage rental issue of all, not having the use of your cottage for the summer, or most of the summer, that’s time you cannot get back.
However, if you are unable to use your place for a summer, or part of a summer, renting your cottage can be a lucrative way to make a little bit of money to help out with expenses, provided it’s done right.
First of all you need to decide where you are going to get your cottage renters. Perhaps you are lucky and can rent to friends, aquaintances or coworkers who are more likely to not damage the place too much, and will probably pay you, given that they have to see you again. Failing that, you end up with advertising in the paper etc, to find renters who are probably going to be strangers, and you are going to be left trying to decide if they are a good ‘fit’ for your cottage rental. It’s especially important if you live a long way from the place, impeding your ability to keep an eye on things.
Having been in the rental business at one time, I have given this some thought, and here is what comes to mind for me.
1) Try to rent to coworkers and friends etc, but keep it businesslike, including damage deposits and a rental agreement spelling out the rules of use. If you are serious about doing this, I suggest you spend the money to have a lawyer review your agreement form and if needed, design one for you to protect your interests.
2) If you cannot rent to friends etc, be very selective as to who you rent to. Ask them to complete an application form, and don’t give them an answer immediately. Ask for references, particularly if you are unsure of them.
3) Make sure boats, motors and personal items of yours are locked up or put away so there is no question about them not being used by the renters. Put this in the rental agreement.
4) Consider things like outdoor fires etc, and if you allow them, be sure to have a safe designated spot for those kinds of activities.
5) If there are any dangers to be avoided, post a sign somewhere in the cottage, and also include it in the agreement form signed by the renter. I’m talking about dangerous ocean undertows, wells, children’s swingsets, wharves etc. Always, always, always be mindful of protecting both your property and your cottage from anything that could result in a lawsuit.
6) Purchase an insurance policy to protect you as a landlord, because that is essentially what you have become, to pay for anything that goes wrong, or any legal problems that come up. Hopefully there will be none, but better safe than sorry.
7) Advise your cottage neighbors of what you are doing, and tell them to be sure to let you know if it is any problem to them. Remember, when it is all over, you will have to be there getting along with your neighbors, so do whatever is necessary to maintain at least a tolerable relationship.
8) Make sure check in and check out times are adhered to, and ensure that the place is OK when they leave. I know some cottage rental owners who show up at the check out time to collect the keys and do a quick damage check. It’s then that you return the damage deposit, did I mention always ask for a refundable damage deposit in addition to the rent, prior to them taking up residence? Get a proper receipt book and use it. Remember, renting your cottage on anything more than a one time only situation means you are in a small business and should govern yourself accordingly. Save your income receipts and your expense receipts as you will need them come income tax time.
9)If you don’t live close, it is very helpful to have a local handyman on call, for any problems that come up. Clogged toilets, electrical problems, etc. A local person might be willing to sign up as a contact or repair person on a pay when something comes up basis, or perhaps a small retainer. Remember the $8000 rent monies that I alluded to in the first paragraph are not pure profit. The handyman could also drop by about midweek to make sure everything is ok. Failing that, you should call after your renters are there and follow up to make sure that all is well.
10) Schedule time to clean up between renters. So if you rent from Saturday to Saturday, they should be out by an agreed upon time that gives you time to clean house and refresh the linens etc. Speaking of linens, and other items, you have to consider how you will deal with that. Usually with places that are rented weekly, set it up as a housekeeping cottage so that the renters are responsible for making their own beds, doing the dishes etc. You may even want to schedule a time through the week to change the beds, replace linens etc.
Sounds like a lot of work doesn’t it? All of a sudden that $8000 for two months doesn’t sound quite as easy to come by. However, it’s not always as bad as it sounds. With any luck you get good renters, maybe even some that return over the summer or each year. Hang on to those ones if they are good payers and not problematic etc, you might even offer them a price incentive.
Proceed with caution, be choosy of your customers and run it like a business and you may find renting out the cottage to be a lucrative way to help pay for it, or give you some extra cash.
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