You can gain financially if you choose to convert your lake house into a vacation rental.
One thing is clear: renting a vacation home is a business. So set yourself up for success before you hand over the key to your lake house.
Here are some important things to consider before you enter into the hospitality business.
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What to do Before Converting Your Lake House Into a Vacation Rental
Make Sure The Numbers Add Up
Before taking the plunge, do the math. Get out a pencil and paper – or a phone app – and list your expenses and what you can expect to generate using your lake house as a vacation rental.
Some of your expenses will include utilities, maintenance (especially preventative), wear and tear, taxes, and insurance.
You will probably have to do more maintenance and upkeep, and at a higher level of quality than you might do for yourself when you are catering to the expectations of paying quests.
There is a huge time commitment if you manage the property yourself, so be prepared to expend that time and energy running the business.
Research Local Regulations
Look up regulations online by going to your town or city website and plugging in “short-term rental regulations.”
If you cannot find any, visit the city hall to determine what, if any, regulations you need to fulfill to make your lake house a vacation rental.
This may require a rental license. Know that you will pay taxes (local, state, and federal) on your income from a lake house rental.
Resort And Occupancy Tax
When researching regulations, some states will require you to get a business license. They will also collect from you the same occupancy tax that they collect from hotels.
Check With Your Insurance Agent
You probably have insurance on your lake house, but a standard policy won’t cover certain types of damages or losses.
Some insurances won’t cover vacant homes or renters’ property or if an injury occurs on your property or if a renter sues you.
Find out beforehand if you need some sort of umbrella policy and just what will and won’t be covered. This is one area where you don’t want any surprises.
Establish a Rental Agreement
You will need to put your expectations down in writing, and not just the cost of renting your lake property.
Some of the agreement’s inclusions should address the number of guests that can stay in the house, length of stay and guest responsibilities while at your property.
Will you allow pets? What about smoking? Do the guests need to straighten before they go and take out the garbage?
List the times for checking in and checking out, just like at a hotel.
There are online agreements that you can modify to suit your needs, but make sure you have one in place.
To Manage Or Not To Manage?
It is less expensive to manage renting your lake house conversion yourself, but it is also a lot more work.
This is especially true if you have no experience doing so or live in a different city or state than your rental.
Management companies will offer online bookings for your lake house, calendars for availability, email communication with guests, credit card processing, and photographers to take pictures to place online.
Having a property management company saves you a lot of time and fields all of the marketing and advertising along with inquiries.
They will also confirm reservations and be of support for the guests.
The down-side is that property management fees can be about 10% of the rental, which is a consideration. Some companies also have an initial setup fee, which might be a couple hundred dollars.
That may seem like a lot, but running your own business takes time, energy, and know-how.
Establish A Schedule
Decide in advance if there will be times when your lake house vacation rental will not be available.
Are there any holidays, birthdays, or other times of celebrations that you will want to be using the lake house yourself?
When you advertise, make sure that you note those blackout dates when stating availability.
Getting Your Rental Ready
Today’s renters expect a lake house vacation to be much like what they would expect if they stayed in a hotel.
WiFi connection is a must, and a cable package is a plus.
Guests will expect that paper products and necessary cleaning supplies will be available.
Laundry detergents and cleaner for the dishwasher will also be an expectation.
Linens and pillows will need to be fresh and clean. There should also be additional linens and an ample supply of extra pillows and blankets.
The kitchen should provide a functional set of pots and pans. Dishes and cutlery, along with glasses and coffee mugs, should be well-stocked.
Remember that guests will be expecting matching sets, not the extras and cast-offs from your primary residence.
While most people would not expect top-of-the-line furnishings, they also don’t expect to pay to rent a lake house full of hand-me-downs.
For your part, you will have removed any keepsakes and personal items, along with family photos.
Just as you would not expect to find someone else’s pajamas in a hotel room dresser, so too, your guest will not expect to see your clothes in the closets or drawers.
If you choose to leave personal items at your lake house rental, designate a closet for those items and put a lock on it. Don’t leave valuable or irreplaceable items at the rental, either.
Get Professional Photos of Your Lake House
Most people who are interested in renting your lake house will look online to see pictures of the house.
They will choose a place to rent based on photos and descriptions of the property.
Be thorough in your description of amenities, including decks, patios, how many beds, cribs, and games or water toys.
Respond Quickly to Inquiries
You will have competition online. If you get inquiries about your property, be sure to respond quickly.
People looking online will often email several places at the same time to cover all bases. If you are the first to respond, they have more incentive to lock down your property for rent.
That means that you will need to check your listing throughout the day and respond immediately.
Vetting A Tenant
It is a good idea to speak with a prospective renter over the phone. You can gain a bit of insight by speaking to a person.
Be sure to ask the ages of the guests, the number, and their plans while in the area. You will need full names, addresses, and phone numbers.
You can get a feel for the person over the phone and decide if they are a good fit for your lake house through that conversation.
While your impression may not always be accurate, it is your best option if you are managing the operation yourself.
Gaining Access To The Lake House Vacation Rental
If you are not planning to meet the guests yourself and don’t have a management company, decide how you will arrange for your renters to access the lake house.
Keyless entries or a designated area to leave the key are two options. Decide too, how you would like your guests to return the key upon departure.
A Welcoming Touch
Once you have begun your lake house vacation rentals, you are part of the hospitality business.
It is a nice touch to leave a welcome letter for your guests.
Helpful information to leave would be the WiFi password, appliance operating instructions (if necessary), local attractions, and a list of local grocery stores and directions.
Menus to restaurants that deliver would be a nice touch and any other information on the community.
If you manage your property, you need to include a number that guests can call if they have questions or any difficulties while at your lake house.
Suppose you are not in the area or chose not to do the cleaning yourself, find a dependable cleaning crew to clean your lake house after each guest.
You might have one set of guests leaving and another arriving on the same day.
That would mean you would have to have a company that could be counted on to arrive on time, clean thoroughly, and be gone before the next guests arrived.
Converting your lake house into a rental property can yield significant financial benefits. It also comes with its own set of rules and regulations.
Ensure that you know how to rent a lake house and all of the ramifications before you take the plunge.