Minimising the risks of renting out your cottage

There is a natural fear about renting out your cottage paradise for the first time. Wondering how you will feel about strangers using your things, whether they will treat your property with respect, and what your liabilities are, may be questions that need answers before you commit. I spoke to a couple at the Fall Cottage Life Show with just those concerns, and here are my thoughts:

• There is a risk involved in renting out as even the best screening and the most watertight rental agreement won’t prevent the occasional accidental damage, or guests that don’t leave the property in the way you expect. If you are not prepared to take that risk and can do so without worrying too much, this may not be the right route for you.
• If you are going it alone without the support of a rental agency, make sure you have a good rental agreement, and clear and concise Terms and Conditions of Rental. These should cover all the issues that concern you about the use of the property by your renters.
• Screen your renters thoroughly by using a rental application on your website or one you can email to prospective renters. Then follow up any email queries with a phone call. Speaking directly to the renter can often give you a feel as to their suitability to rent.
• Ask if they have rented before and get the phone number of the owner of that cottage so you can call and ask for a reference. If they are cagey about this and reluctant to provide the information, it may be better not to take the risk to rent to them.
• If you choose to use an agency, make sure you are comfortable with their processes. Ask about their screening and how they decide if a rental group is right for your property. Make sure they are registered with the Travel Industry Council of Ontario (TICO) and maintain a Trust Account to hold funds that will be due to you.
• Do not start to rent without insurance that will cover you for renting the cottage. Talk to your broker first and if your current insurance company will not assist, you may need to talk with a specialist such as Ross Robertson (for renting up to 60 days), or Mason Insurance, who have a year round rental policy.
• Read Renting your Recreational Property for Profit! The book touches on everything related to renting out. Yes, folks, this is a shameless plug for my book, but believe me after buying and renting out six cottages over the past seven years, I’ve learnt a lot. If I’d  known half of what I know now at the start, a whole lot of heartache, stress and money would have been saved. And it is that learning I pass on in the book. And it comes with a CD that includes all those booking forms, rental agreements and documents.

The couple I spoke to bought the book and I believe I helped them, even if in a small way, to clarify their thoughts on renting out their paradise. If you have doubts or questions, just send me an email or call, and I will be glad to help.