Rental Income

Last fall we rented a small apartment in Nice, France for some close to end of year r & r. This property was new to us and we were both impressed with the location and design of it. For a 45 square meter apartment, it had most of what we would want should we be in the market for such a property. I would love to own one like it but at close to $550000 euro (area comparable), I think I'll have to pass!

D took the opportunity to bring up a topic again -- extra income. Why don't we rent out our cottage and ski condo? If someone like our Nice apartment owner can do it, with such a valuable property, we could rent out our much less expensive ones too!

I hadn't given it any thought until now. This past weekend, D approached me with a "rental proposal" for both properties. I took a look at it and I will admit I'm not as opposed to it as I was a year ago.

My biggest issue has been the amount of work it would require, having to remove my personal items (thus making it feel less like mine), having to make sure it was spotless (no magazines strewn all over the coffee table), sharing a place where I go with others (I like having hideaways).

Unlike most cottage owners around us, we do not invite people to come up (Honestly, we are not anti-social! We just prefer to entertain at our main house!). In fact, only a handful of people (non blogging!) even know of their existence! I like heading up when I feel like it and I like the option of changing my mind if traffic is particularly bad or the weather isn't too good. If I schedule things, then I "have" to go and for me, that defeats the purpose of owning in the first place.

Since I've started blogging and after reading many other blogs, I've warmed up to the idea of adding rental income to our lives. Our vacation properties are natural to consider as we already have them. The cottage is paid for and the ski condo is 40% owned. We are considering the possibility of renting them out to people we know once or twice max per month.

I have to admit that I'm having fun dreaming up how to run things. Basically I'd want guests to be able to enjoy the area like we do. We'd supply linens and towels and a guest area info booklet. I'd have a great time drawing that up. We'd design a website likely from a free source like Blogger or Wordpress. I'd have fun taking the pictures. It will force us to finish the odds and ends that are currently on the "things to do list".

Working out the logistics of key, money, linen/towel exchange has been trickier. What if our friends from out of town want to rent it? We'll need to price out courier costs for keys. We can store several sets of clean linens/towels on site. It isn't as much an issue for the cottage but the ski condo is 3/12 hrs away by plane so a lot of planning will be needed.

Start up costs will be in the range of $600 dollars for both properties. This would cover things like extra pillows, mattress and pillow protectors, some new pots and pans, rubbermaid containers for clean linens, a couple of dressers, paint, gas bbq (we go rustic at the cottage and like using a charcoal bbq but from a fire hazard and insurance perspective, I think most people are more familiar with propane) and increased insurance.

Preliminary searches for comparable cottage rentals in our area shows $650 - 850 for a non waterfront 2 bedroom up to 4 people occupancy. Our cottage has no neighbours on one side nor at the back and is a stone's throw from the water. And for a ski in,ski out, village center 2 person condo $665 per week is the comparable.

We are thinking of charging $550 per week for the cottage and $450 per week for the ski condo. There will be a higher per night pricing for anything less than a week. We priced lower for skiing as we feel it is our way of supporting the "ski bum" lifestyle! As for the cottage, we know of a number of younger families that would be able to consider a cottage rental at that price. Is that bad business?

We looked at what it would cost should we enlist with a management company to handle both rentals on our behalf. Fees aside, for us, it seems easier to control occupancy vs. having to "apply by the year before" to the companies for times we'd like to use. As I said, I kinda like flexibility.

So once everything is set up, running will hopefully not be too work intensive. We would be doing the cleaning ourselves but will be asking everyone to please leave the properties the way they found it. Those who know us, will know of our standard of living and that they would not be renting "dives" nor would we like to walk into our places looking like one either.

D sees it as an opportunity for a win win situation -- to provide vacation opportunities at a couple of neat spots for a fraction of the cost and for us, if we make enough to pay for our trips out west and season passes, or our annual trip to France, that would be awesome!

Would you consider doing the same if you were in our shoes? Are there other things we need to consider? I'd appreciate any input!