Top 10 Cottage Rental Mistakes to Avoid.

Considering renting your cottage and wondering what you need think about to get your cottage investment working for you? Well this blog will help you out. This week we are looking at the top 10 mistakes to avoid when renting your cottage.

As always, any questions please feel free to check out our website or reach out to us via instagram or email at sean@serenityrentals.ca

Top 10 mistakes to avoid:

Not doing adequate background checks on your renters. This is one the hardest parts of renting your own place. Property management companies have processes and systems in place to verify and check potential renters. While nothing is fail proof a lot of time and effort is put into making sure that they are thoughtful renters, no parties, no unexpected “guests”, they are following all of the bylaws and are being respectful not only of you property but of the other cottage owners on the lake.
Thinking that your cottage will always be rented. No matter how beautiful your lake is or your cottage, it is not realistic to assume you will have it rented 365 days of the year. We think a good starting point is 60-70% of the time available for renting will be rented. This will vary depending on when you use your own property as there are peak periods and times that are more easily rented than other times of the year.
Underestimating the cost of repairs and maintenance. Whether you are renting your cottage or not there is regular repairs and maintenance to be done. If you are using the cottage as an investment and are looking for it to cash flow, make sure you include repairs and regular maintenance in. Depending on what you are doing you also need to remember you may not be able to rent it during that time which can impact your rental revenue.

Not knowing and understanding your local bylaws around short term rentals. Happy neighbours is a very important part of cottage life. To keep neighbours happy you as the owner need to be aware of the local bylaws around short term rentals. These bylaws are not just whether or not it is allowed in the area, but it covers parking, fires, noise bylaws etc. It is essential that you and your renters are aware of the bylaws in your area.
Viewing your rental as a hobby. Owning a rental property and doing it right means you need to treat it as a business. Check with your accountant: do you need separate bank accounts, what expenses you need to track, do you need an HST number etc. Make sure you do it right from the beginning, it will make your life much easier.
Neglecting marketing. The more sites you market your property on the greater the chance you have of meeting your occupancy goals. That said, there is nothing worse then showing up to a property and it looks nothing like the photos because it is 10 years later and everything is run down. The photos of your rental are the “first impression” and what will capture a potential renter’s attention. So, make sure that your photos accurately represent the property as it is at the time of renting. When you do upgrades and renovations, you need to redo the photos.
Purchasing the wrong property. Make sure your expectations of what the carrying costs of the property you want to purchase are in line with what a cottage in that area that is similar in size, location and condition will rent for. You don’t want to make assumptions about the rent your cottage can generate. You need to coordinate with your Realtor and mortgage broker and the rental management company you intend to use.
Being disorganized and/or limited communication. Disorganization and a lack of communication with neighbours and renters can cause headaches. There are a lot of moving parts from payments, rental agreements, to cleaners and handymen to marketing and paying the bills. Make sure you are on top of all of this. The more you rent your place out and the more places you advertise on, the more complicated the process can become. Make sure you are organized and not double booking. Make sure you have all the paperwork easily accessible and communicate all of the important things the renter needs to know about your place before they arrive and follow-up after their trip is done to make sure it was a success.
Not having the proper legal paperwork in place. The main recourse you have should something go wrong is your rental agreement. Make sure that you have a lawyer review the agreement and any other paperwork (for payment collection, background checks etc) and that it covers off all of the risks that you need covered.
Underestimating the amount of time it will take. While it seems easy and like something you can do on your own, speaking from experience it takes a lot of time. Coordinating the cleaners for each rent flip (which is usually the same day everyone else in the area needs them) and handymen to fix things quickly. Collecting payments, taxes and paperwork for each rental. Tax submissions for the property, marketing, renter background checks and making sure that the property isn’t double booked are just a few of the things you will juggle regularly. This coupled with ongoing communication with the renter before, during and after their stay to provide the information they need about their vacation and answer any questions they have. So, please be aware of the time needed to do this properly and is your time better spent elsewhere and leaving this all to a management company to deal with? Something worth considering.

Happy cottaging