Over the past two years, the persistence of COVID-19 has laid many industries low, but the cottage rental market doesn’t appear to be one of them. Six months out from summer and desirable locations are already being booked, says J.T. Lowes from All-Season Cottage Rentals, a property management company that specializes in cottages.
“We take most of our summer bookings during January and February,” says Lowes. “Every year seems to get earlier and earlier. Bookings for this coming summer actually started to pick up late October, early November.”
Lowes admits that the cottage rental rush may wane slightly once COVID has abated and people feel comfortable travelling abroad again. But if you’re looking to make some ancillary income off your cottage, now is a great time to jump into the rental game. Before you throw a listing up onto booking sites though, there are a few details you need to consider:
How much to charge
There’s no magic formula for calculating how much to charge a guest. The fee will depend on a range of variables, says Lowes. “The size of the cottage; exposure; the lot—is it a hilly lot or is it a flat lot?; the waterfront—do you have a nice, sandy beach; is there a dock; does it have deep water for nice, clear, weed-free swimming?”
In Lowes’ experience, cottages with southern or western exposures tend to be more popular. But to nail down an exact figure, Lowes compares the cottage he’s managing to similar cottages in the market.
There is often a price pattern depending on the size of the cottage. “A two-bedroom cottage might rent from $1,200 to $1,400 a week up to $2,400 a week. Three-bedroom cottages would rent anywhere from $1,500 a week up to $3,000 a week. There’s a pretty big range for each size. And then that’s when all the other variables come in to figure out where within that range your cottage sits.”
Raking in $3,000 a week sounds great, but keep in mind there are costs associated with renting out a cottage. To start, most booking sites charge a fee to list. These are non-negotiable, says Lowes.
You also have to take into account the cost of cleaning, particularly during the age of COVID when guests are looking for fully sanitized rentals. Cleaning costs can be exacerbated if you host a guest who damages your property or throws a party and doesn’t clean up after themselves.
To mitigate these costs, Lowes suggests having guests sign a rental agreement and asking for a security deposit. The rental agreement outlines your rules, binding the guest to them when they sign. A security deposit helps cover the costs of any damages or parties. Plus, having extra money on the line should keep guest behaviour more accountable.
“Back in the day, the standard amount [for a security deposit] used to be $500. Today, $500 doesn’t go that far anymore,” says Lowes. “Most people are going to do $1,000–$2,000 security deposit, depending on the calibre of cottage.”
Property management companies
If you’re willing to forfeit a portion of your earnings to have the rental process handled for you, a property management company is a good option. On average, Lowes says a rental company will take a 20 per cent commission on each booking. But many rental companies will bring that commission down on a sliding scale based on the value of the property, he adds.
In exchange for the commission, the rental company helps you determine an appropriate amount to charge for your cottage and then handles all bookings and guest communication. This often includes marketing your property to a wider viewership rather than relying on your listing to get noticed on a booking site. Many rental companies will also coordinate cleaning services for you.
“If you want to have somebody else take care of all the details to make the rental process smooth and easy,” says Lowes, “I’d recommend going with a rental company. We essentially would take everything that has to do with the guests off of the cottage owner’s plate.”