The past few weeks have been nuts but things are beginning to slow down a little so I thought I’d take the opportunity to share a little of what my day job entails and what I’ve learnt from a summer of rentals.

We are blessed in our part of Canada to live amongst thousands of lakes and many, many miles of river. The cottage vacation is a traditional part of the family summer with cottage ownership being a major ambition amongst those who haven’t been fortunate enough to inherit their little piece of paradise, but this ownership comes at a price. Maintenance & upkeep of properties that live through the extremes of our hot & humid summers and icebound, snowy winters is costly so many owners rent to cover the maintenance costs. For those who prefer not to manage their own rentals there are several excellent agencies that look after marketing, advertising, enquiries and paperwork, and handle all the money. I am part-owner of one of these agencies – CottageLINK Rental Management, and with 150 properties to manage, it keeps us on our toes throughout the high season.

Much of what I write about here is drawn from the 10 years experience I have of over 1200 rentals each year, and growing. At one time I also owned several cottages but have now whittled that down to one – Osprey Cottage – which is a great renter achieving maximum occupancy through the high season and a considerable number of low season rentals too.

In our busy season with 100 or more families in our properties every week, we have to maintain a fine balance between addressing the issues raised by our owners and those experienced by guests, and often this brings us into a challenging area where we have to assess a situation based on two very differing accounts. This might be a cleanliness situation where standards vary; at other times it might be minor damage that an owner is convinced was caused by the rental guest while the renter claims it was done before they arrived but hadn’t noticed it. Our job is to evaluate each situation and make a detached judgment based on the evidence supplied. Of course, one party is invariably unhappy as we either charge a damage deposit or tell an owner they need to absorb the cost because there is insufficient proof of when the damage occurred.

On a personal level, with my own property, I fully accept that doing this business comes with risks, and occasional damage and wear and tear are part of those risks. Only on very rare occasions would I ever consider making a claim on a damage deposit and even then would err on the side of leniency. We don’t often come across anything that amounts to ‘wilful damage’ so most situations are entirely accidental. However, there have been a couple of examples of sheer stupidity such as the holes punched in a stainless steel fridge door by the guest trying to crush a bag of ice against it, and the upturned canoe split by several people sitting on it. Both of these resulted in costly claims that were quickly settled.

On the other hand, complaints from rental guests occupy a considerable amount of time too, and most of these could be prevented by attention to detail and a healthy respect for the consumers for whom the accommodation is supplied. Because of the diversity of cottage locations we do not provide property management – changeover and cleaning services – so rely on our owners or their caretaking staff to ready the cottages for the next guests. Our standards are high, but occasionally we are disappointed to learn that the expectations of guests for pristine accommodation have not been met.

Lastly, this year has brought forth a startling increase in what we term, ‘serial complainers’. This comes partly from the media who encourage consumers to look for refunds for anything and everything almost as a god-given right, and partly from what seems to be a growing sense of entitlement to getting money back for every minor detail, however accidental, that may impact on them having their expected experience.

I don’t want any of my readers to get the wrong impression. I love this business – I really do. It’s just sometimes frustrating that kindness, respect, understanding and flexibility seem to be forgotten in the pursuit of wanting to be right.

Just sayin’……

  When I bought my first rental property in Canada, I was still living in the UK, but didn’t even think of asking a third party to manage the rentals. I wanted to do it myself, and I am glad I did because what I learnt from buying that cottage, and the five that followed it, became the foundation of my book, Renting Your Recreational Property for Profit.

It was a very steep learning curve, not only from the perspective of managing a property from a distance, but also in the sheer amount of things I hadn’t considered at the beginning that created a lot of challenges along the way.

If I had known back then what I know now, I could have saved a lot of money, time and worry. Having said that, I’m still happy I went the RBO route rather than use an agency because it was right for me. I had time and enthusiasm; I was a management and marketing consultant at the time so knew what I had to do to make it work, and my entrepreneurial streak drove the whole process.

Of course, I ended up making a business out of managing the rental of other people’s properties because I saw the opportunity to share what I’d learnt with those who just don’t want to do it themselves.

So, here it is. You have a property you want to rent out. Perhaps you are one of the 350K owners that Phocus Wright suggests might be moving towards ‘active’ rather than ‘casual’ rental. And you don’t know where to start.

You could buy a book (and that could be a good decision!); you could attend a seminar….if you can find one in your area; you might find a forum where other owners hang out, like Lay My Hat, and see what you can find there. There are some listing sites that have owner areas that give advice and suggestions, and you could probably find all you need to know on this blog. However, all this takes time and if you want to get in there and begin marketing your place for the summer, you need to move fast.

The alternative is to register with a rental management agency and let them handle all the marketing, enquiries, screening, financial stuff, feedback collection, and administrative work, while you sit back and wait for the cheques to come in.

Note that I am not talking about ‘property management’ here. There are some agencies that manage both the rental aspect, and the changeovers and maintenance, as a package and I’ll be discussing those later in the week.

There are costs in both routes in terms of time and money so its important to weigh these all up and balance the benefits against the drawbacks of each. An agency will charge commission on a percentage of your rental, while renting by owner will incur marketing and advertising costs as well as web site creation and maintenance. Here’s a few guidelines to help in your decision making:

Rent By Owner if:

• You have plenty of time for the work involved in setting up, marketing, administrating and managing your rental business.
• You enjoy responding to emails and receiving telephone calls and can spend at least an hour a day working on them.
• You are comfortable with handling renters money; taking deposits, final payments and dealing with the aftermath of any damage.
• You can create a system for managing enquiries, rental contracts, reservations, availability calendars, invoicing, balance statements, and follow-up correspondence.
• You have the skills to set up a website or blog, optimize it for search engines to drive the traffic to it, or are willing to hire an expert to create this for you.
• You are familiar with the concepts of marketing and can apply effective strategies for getting enquiries and converting them to actual bookings.

Use an Agency if:

• None of the above apply!

OK – so that’s a little simplistic but I will be covering rental agencies and what they do in greater detail in this upcoming week. The bottom line is that if you want to get a rental up and running, and need it done quickly, then you might find that hiring an agency to do it for you is the best way, at least in the first year.

Photo by Bill Barber

I make no secret about my involvement with a leading Ontario vacation rental agency but this blog focuses on all owners regardless of whether they use an agency or advertise privately so I rarely mention this role. However, a recent conversation with a registration official at the Travel Industry Council of Ontario (TICO) reminded me of an issue all owners should be aware of when planning on using the services of an agency in this province.

TICO has the responsibility of administering the Ontario Travel Act 2002 which clearly indicates that any business that rents out vacation homes and/or cottages to consumers, on behalf of cottage owners, and receives monies from consumers to pass onto the cottage owners, falls under the definition of a travel agent within the scope of the Act.  TICO are in the process of contacting all rental agencies in Ontario and telling them the following:

Those individuals that sell travel services in the province of Ontario, without registration do so contrary to law and may be subject to penalties as outlined under section 31 of the Act.

Registration with TICO requires agencies to meet a number of requirements such as maintaining minimum working capital, having sound accounting practices including trust accounting, filing annual financial statements and ensuring staff are qualified to provide information to consumers. This is an arduous and costly process which may be the reason why a number of smaller agencies have avoided registration up till now.

The professionally operated rental agencies in Ontario are TICO registered and proudly display the logo on their web sites in accordance with TICO requirements. So, if you are considering using an agency for marketing and managing your cottage rental, look for the logo. If you can’t see it,  check the list of registrants on the TICO web site or call them on 1-888-451-TICO