If you are looking for an investment option that is likely to bring in income as well as personal enjoyment, cottage rental properties are a great option. Cottage rentals are a popular option for families, couples or other groups of vacationers looking for an out-of-the-ordinary vacation experience. These private vacation getaways, which are usually smaller homes but typically range from 2 to 5 bedrooms, are often situated on prime property, such as beaches, in mountainous areas and near lakes or other bodies of water. Owning vacation property isn’t without its challenges, two of which are the constant need for upkeep and for 24-hour availability in case of problems. Once the property is yours and the cottage is ready to be rented, you may decide to hire professionals to take care of those aspects of cottage rental ownership you don’t want to deal with, which can reduce the amount of time that you need to personally invest, once the business is up and running. It can certainly be a part-time venture if that's what you are seeking.
If you don't already own the cottage property you hope to rent, conduct market research to determine which location will prove most lucrative for your rental. If your area has a relatively popular vacation home market, you may be able to purchase a cottage in the local area and maintain it yourself. If you intend to purchase property outside of the local area, it may be worthwhile to hire a property manager. Other considerations include determining your target renting demographic, such as professionals, families, vacationers, lovebirds or college students.
Your cottage should offer the amenities suited to your target clientele and a mortgage you will be able to afford. Remember that bigger isn't always bigger when buying property. For example, if you will cater to couples and stress privacy and romance, you might want to rent a smaller cottage, with 1 or 2 bedrooms, a whimsical garden, large working fireplace and luxurious bath. If catering to families, the cottage should have at least two bedrooms, two bathrooms and a sizable and modern kitchen. Consult with a certified accountant to determine what type of mortgage is best for you and your anticipated tax liability.
Furnish your cottage to accommodate your anticipated renters. If you will rent beachfront property, consider installing an outdoor shower to prevent dirt from being tracked into the rental home. Invest in comfortable, durable furniture and beds. Focus on creating the perfect getaway for your clients. Think outside of the box when furnishing your rental. Remember that many of your guests already own homes and are looking for something a little different in their vacation rental. If necessary, consult with an interior designer or a friend with impeccable taste to help you furnish your cottage. Discuss necessary upgrades and improvements you want to undertake with a qualified contractor. Hire a housekeeper and gardener, if you don’t intend to maintain the property yourself.
Invest in a key system for distributing and returning keys. Although some property owners simply mail the keys to their guests and require them to be returned at the end of the stay, there are more convenient and reliable systems to use. Lock boxes, where the keys are placed inside a locked container and left at the property, are a low-cost investment. A more expensive system is keyless entry, which allows you to change the entry combination frequently and conveniently and is built into the entry itself.
Contact your current insurance provider to discuss and purchase insurance for your rental property. If your insurance provider doesn’t cover rental properties, she should be able to connect you with another trusted insurer that does. Insurance is vital to owning a rental property, so don't forget this essential step.
Set your minimum booking duration and price list. Compare rates of other rental properties in your area. If your cottage is equal in beauty, location, and amenities, be sure to set competitive rates. If renting on a nightly schedule, check local hotel rates too. Adjust your prices as needed depending on the season or holiday. Determine whether to include cleaning or other services fees and what to ask for in a security, reservation and pet deposit. It may be wise to require clients to pay in full up front. Offer discounted rates for lengthy stays. Establish cancellation policies. Be sure you are able to take major credit cards for up-front deposits and prepayments.
Once your finished cottage is ready for occupancy, take attractive photos of it, inside and out, at different times of day. If it is situated in a particularly attractive place, make sure to take photos of the surrounding area too. Have colorful glossy brochures printed. If there are local advertising sections that you can be a part of, set an advertising budget to get the word out in the area that your cottage is available. Local and area word of mouth is vitally important.
Hire someone to create a website to promote your new rental property. Make sure you provide details and add photos. Look at the websites of other popular cottages that do a steady business to see what their styles are--try to make yours unique, but also learn from those who are already living the dream. Finally, list your cottage on popular national and regional vacation rental websites.
Invest in accounting software such as Quicken or QuickBooks to help you organize your expenses and revenue.
If you have friends or know others in your area who own rental cottages, ask their advice on your start-up process. You may think you've covered everything, but they may have tips on details you've overlooked.
Shanika Chapman has been writing business-related articles since 2009. She holds a Bachelor of Science in social science from the University of Maryland University College. Chapman also served for four years in the Air Force and has run a successful business since 2008.