Owners The state of the economy in the last few years has presented a dilemma to many owners who have a vacation home but may not have considered renting out before. For some it has become the only way they can afford to hold onto the family vacation home; for others it’s a way of maintaining and improving the place without recourse to savings or loans.Many owners I speak with are just beginning to think about renting, as a way of helping pay taxes, or to fund some renovations or new projects. Most had never considered the idea before but are seeing neighbours who rent, and who appear to be achieving significant income. The big question seemed to be, ‘I’d like to do this but don’t know how to start’. If this is you, here’s a few things to think about. Rental Agency vs By Owner RentalsThere’s a big decision to make at the very outset – whether to use an agency or go it alone. An agency could take up to 50% of your rental income depending on the services they offer, but they will get your property listed promptly, and if it is a desirable rental property, will have your available high season weeks rented very quickly. They will use their expertise to screen potential renters, advise you how to set up and prepare for your first rental groups, and ‘hand hold’ you through the process.Going the do-it-yourself route is the other option and requires a lot of work and commitment to being an active part of the hospitality industry. Even with the resources provided by the major listing sites such as Home Away, VRBO and Flipkey you will still need to do significant research on marketing and have a booking system in place that includes a legally binding rental agreement.Recommendation #1 – Many owners find it helpful to start with a rental agency so find one in your area that is licensed or registered to operate legally – and discuss how they can market your property for you. You may be surprised at how much money this can save you in your own marketing and set up costs in the first year. Set Up CostsRegardless of whether you use a rental agency or not, you will need to prepare the property to meet the demands of the rental market. Renter expectations are rising and people who part with significant money to rent a week or two in a vacation property quite rightly expect high standards. You will have to replace old and worn mattresses, kitchen appliances, and furniture that has seen better days. Structural elements that have never caused problems to your family before may become potential liability issues for renters so it’s vitally important repair broken or damaged decks, docks, railings and steps.Recommendation #2 – Do a complete property audit. Check all the items on the list and plan on making changes to upgrade and improve. This will be well worth the time and expense since you’ll be able to achieve a higher rental rate (which should cover your costs over time) and you won’t open yourself up to the risk of complaint from unsatisfied renters. Set a Competitive Rental Rate‘My neighbour’s charging $3000 a week, and my place is better than his’. I hear this often, and appreciate it’s very tempting to take this figure at face value and decide this is the benchmark rate for your property. And there is nothing to stop you doing this. However, if you’ve decided to rent with an agency, it is definitely worthwhile listening to what they have to say. Most agencies have been in operation for years and are highly experienced in setting competetive rental rates to attract the type of renters who will look after and respect your cottage.Recommendation #3 – If you are going it alone, do a lot of research on other properties in the area and what they are charging. Look at all the angles, for example, if your neighbour allows 16 people into his 3-bedroom property and accepts party groups, he may well be asking a high rental rate, but he is also risking damage and high wear and tear costs. Changeover PlansOnly a few short years ago property owners expected their rental guests to to leave the place in the same state in which it was found, then just had a neighbour or friend pop in for an hour to run a vacuum round and replenish supplies. Times have changed and the casual rental business has turned into a full-blown hospitality industry. There are still a few outposts where guests are asked to clean up before they leave but this practice is beoming outdated fast, and a complete cleaning service is now expected as part of most vacation rental contracts.Recommendation #4 – Finding a reliable cleaning person can be the most challenging part of setting up your rental but it is one of the most important, so do this early on in the process. There are a lot of options, from doing it yourself, to hiring a professional property manager. The cost of this could impact your rental rate so make those decisions before setting your rate.This is just the start of a rewarding and fun business, but it’s worth reminding you that it is a business and not a hobby. Vacation rentals are a mainstream choice for many travellers worldwide and they have high expectations and demands. It’s a hospitality industry that has grown exponentially in the past few years and continues to change and evolve and there’s a steep learning curve for newcomers. Those who are willing to take on the challenge and be the best will be rewarded with a solid income and the potential for further investment.