Renting Your Recreational Property for Profit. Heather Bayer

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      Making Changes

      Once you have done this analysis, you are able to look objectively at what you will have to do to shore up the weaknesses and challenge the threats. In this example, you may decide on the following changes:

      • Improve the amenities you offer to put your property at a higher rental level than your local competition. For example, purchasing a hot tub pays dividends in increased bookings in the colder months. Providing a computer and Internet access will also give you that competitive edge.

      • Promote the advantages to specialist hiking/walking groups for fall and spring, and to snowmobile enthusiasts during winter. Offer special packages such as “Breakfast included” (where you stock the fridge with breakfast fixings).

      • Explore ways of making the property more winter-accessible and for attracting people looking for a winter getaway.

      • Develop one-year, three-year, and five-year plans that incorporate prioritized capital improvements.

      • Purchase a combination washer/dryer that will fit into a small space.

      If you are using an agency, let them know you plan to add value by making changes, and make sure these are mentioned on their web pages. If you have chosen your agency carefully, they will be actively promoting out-of-season rentals and will welcome discussion on how best to market your property.

      Calculating the Bottom Line

      Once you have your targets set, know how many weeks you have available for rental, have analyzed the current status of your cottage, and planned for improvements, you can then decide on the level of flexibility you have for late availability and off-season bookings.

      If you have planned your marketing strategy well, you should never need to make price reductions during high season. As long as demand remains high and the number of properties available to rent is limited, you will rent throughout the summer, providing your pricing is realistic. Being more flexible with your rates becomes more important at other times of the year when your potential guests may be more sensitive to higher prices. Keep an eye on what other owners are doing by checking constantly on the competition.

      Sample 3 is based on figures for the lake cottage mentioned earlier in this chapter.

      With the total monthly expense figure calculated, you can then divide that by your proposed weekly rental rate. From the result, you will see how many weeks you will need to rent to break even. Now add in the number of weeks you can realistically expect to rent to arrive at the net profit you can reasonably expect to make. With a high-season rental rate of $1,400, this cottage needs to be rented for 12 weeks to pay the mortgage and monthly overheads, which is a realistic expectation.

       Sample 3: Rental Calculator