Should You Turn Your Vacation Cottage into a Cottage Rental?
by Kristin Dorsett
If you own a vacation cottage and are considering renting it as a weekend or summer rental, here are a few things to consider before you start renting:
Your Hopes and Expectations. Before you begin, you should set objectives for the number of weeks you’d like to rent and the amount of revenue you’d like to accrue. It’s important to be realistic when setting your goals for your cottage rental business to have done your research to make sure that you’re not setting yourself up for failure. For example, if you own a summer cottage in Sag Harbor, you’re not likely to rent out 52 weeks each year. However, if you own a cottage in a more temperate market like Smith Mountain Lake, you’re more likely to be able to rent beyond the summer months.
Your Vacation Market. The geographic region that your vacation cottage is located in will determine your home’s rentability as a short-term rental. Do a little bit of research in your area: Are there other cottage rentals in your town or city? If not, try to find out why. Maybe you’re just ahead of the curve in your area. Or maybe, there’s another reason for the lack of vacation rentals (i.e. short-term rental restrictions).
Where Your Home is Located within Your Market. Location is one of the main reasons that some cottage rentals thrive and others don’t. The most in-demand homes are located within a short distance to area attractions (the lake, beach, mountain, etc.) If your cottage is located in a residential area with many permanent residents, it may not be ideal for vacationers looking for a vacation experience; however, it may be great for business travelers or snowbirds.
Your Home’s Accessibility to Transportation. Another factor that will impact the rentability of your cottage rental is its accessibility to an international airport and to public transportation. Cottages located in rural or remote destinations can still be rented successfully, but may take a bit more effort to book. If your summer cottage is off the beaten path, you may need to get creative with your advertising, decor, and extras.
The Condition of Your Cottage. Travelers expect cottage rentals to be as nice as or nicer than their primary home. If your cottage has appliances and furnishings from 1960 and you’re not going for the mid-century look, you might have some work to do before your home is ready for renters.
Local Ordinances and Regulations. Before renting your mountain or beach cottage, research the short-term rental rules and restrictions in your area (state, county, city, or complex). You don’t want to create a business plan around renting weekends only to find out that your HOA prohibits rentals of less than 7 days.
The Amount of Time and Effort You’re Willing to Put In. The amount of time that you dedicate to calling prospective guests, editing your vacation rental website listings, and responding to current renters will directly affect your achievement as a vacation cottage rental owner. If you don’t have the time or aspiration to put in a little bit of work, you may want to consider finding a cottage rental management company to handle the day-to-day efforts.
How Much You Want to Use Your Home Yourself. The peak weeks that fetch the top dollar in your market are likely the same weeks you might want to stay in your own beach cottage. As the owner of a cottage rental business, you’ll just have to weigh the pros of staying in your home yourself against versus the big con of lost income.
While some vacation cottages may not make perfect vacation rentals, with realistic expectations and perhaps a little sprucing up, most vacation cottages have significant cottage rental potential.
