Renting to Family and Friends

I got such a great comment on my Renting 101 post that I wanted to deal with it separately because I think it's an issue many new cottage owners face. This was the comment:

"We are first time renters beginning this summer. What are your thoughts on how to deal with immediate family that wish to vacation at our newly-acquired cottage? Is charging rent appropriate, or would it be better to simply ask them to do things like cut the grass, clean thoroughly and replenish items such as paper and cleaning products to get the cottage through a few more weeks of upcoming renters after they leave?"

I remember when we bought our first cottage and suddenly became very popular with ‘friends' and family. At first I didn't want to charge them, but we had set goals for what we wanted to achieve with renting, and that didn't leave us with any free high season weeks to give away. So, we simply made it clear that we were running our cottage rental as a business and although we'd love to offer a discount in the summer, it just wasn't possible given our plans.  However, we were happy to have family stay in the low season, and all we asked for then was for some jobs to be done.

Here's a brief excerpt from my book, "Renting Your Recreational Property for Profit", that touches on this issue:

"To maximise your income, you'll need to rent the whole of the summer, but that may not be practical if you have family who want to spend some time in the cottage as well. At times you need to be strict, not only with yourselves, but with family and friends who probably see your cottage as an inexpensive way to vacation, particularly if they have done so in the past. Let everyone know that you are renting in a more professional manner and that you may have late availability weeks or weekends that they can have. If you have minor jobs that need doing, you could save a little on property management by asking your non-paying guests to do them. Alternatively, have your non-paying guests, family or friends leave a ‘gift' for the cottage. Why not keep a list of items that may need replacing from time to time and ask your non-payers to choose from the list and take the replacement item with them to the cottage. Include things like new pillows, towels, books and games, additions to the fishing tackle box, etc. They will appreciate knowing their gift is needed, and you will save on some of those expenses."

One word of caution here. Immediate family and friends have the same responsibilities as other paying guests. This means they should leave the cottage in the same condition in which it was found, if you don't provide cleaning services. I don't recommend relying on them to undertake the changeover duties that should be done after each rental by an owner or caretaker. Relationship issues can arise if your family guests have caused any damage or fail to clean up to the right standard. The last thing you want is for your rental guests to call you and complain about the condition of the cottage after family have left.

This can be a thorny issue and everyone will be happier if there are clear boundaries. If you can afford it, set aside a couple of high season weeks – the first and last of the season are good ones – but don't rely on the family to prepare it for the next guests.

Has anyone else got suggestions on how to manage this issue? I'd love to hear them from you.

Lisa

We have a thorny isueand need help! My three sisters and I own a cottage together inMassachusetts. One sister would like to rent her weeks to freinds in order to cover her portion of the taxes, etc. The cottage costs us each about $4,000/yr or about $700/week from April to October ( the only months we can use it). I look at it as if each of us owns her weeks and can do what she likes with them and set a rent that will not allow her to make more than her total of $4,000/yr. Other sisters see enting a week for $1,000 or $300 more than the cost as making a profit. What do you think? Has anyone out there been in similar situation? Help!

Wally O

Why not! If you can make money do it!

Should not matter what they do with it, if it is their week then they should be able to charge what ever they want for it… it is their weeks after all.

Emerald

I have a dilemma after renting a week in our high season to a guest who is related to our neighbors, actually the son of the people that sold us the house years ago. He was getting married in town and booked the house for a week for what he said would be a party of 4. He assured me the house would be occupied by his mother/father in law and sister and brother in law, and no parties or entertaining as we have policies that these need to be cleared with us prior.
On the day of check in I called his inlaws to confirm the time and they tell me they are not coming in until mid week, but that the groom and his wife are checking in. I call the groom and he is cagey, then mentions he was looking through the emails to see if there was mention of where the key was. I also find out through the in-laws that there are two additional guests, two children. We charge extra for extra guests.
They also only stay 6 nights instead of 7, although they leave late on the sixth day.
After all is said and done I charged them for only to additional guests for two nights. They booked it for 7 nights, 4 people, but in the end it was unclear if there were 2 for 2 nights and 4-8 for 3 to 4 nights. Plus, cleaning is not included and these people left if dirty, although visually neat. We had to charge for that. As well, we heard from the mother in law that she “cooked breakfast for some people and it went well other than no one stayed to help with the dishes.” I charge a small hosting fee if guests want to use the house for entertaining and added that to their bill. In the end, the groom does not get his deposit back. I rarely have to keep a deposit, mostly there is no charge or a 25-75 dollar cleaning fee. This one added up to 500 after 200 for cleaning, 150.00 for the breakfast party and 150.00 for the additional guests. After receiving this bill he told me he and his wife never stayed at all, even though he called my husband mid-week and informed him that he had checked in. He also said there was no breakfast party, just two of his mother in laws friends.
In the end my guest is saying that the house was only occupied wed-sat and even tho he added the two children it should be a wash since they didn’t use it for three of the nights reserved. I do happen to have a phone bill showing that someone was making long distance calls the day he said know one was there.
My question is, if a guest reserves a home for a week in prime season and you give them a rate based on four, then they tell you they weren’t there for three of the nights but added two people to the guest list without informing you, is this ethically “a wash?”
I am prone to charge him for the two additional guests despite what he says because he was cagey and there are so many contradictions I don’t feel like I can believe him at this point. 99% of my guests are completely upfront and never pull stunts like this. Two parties breached the lease, one used the off limits wood stove and one had a small bd party, in each case they politely asked my forgiveness and told me to keep their deposit. This guy seems to want his cake and eat it too.

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