The business side of renting your summer home
• Check appliances and smoke detectors.
• Consider hiring a pest control service to spray for insects prior to the rental season.
• Provide an extra gas tank if you have a gas grill.
• Arrange for trash pickup (twice a week is recommended) and lawn service.
• Be sure that the kitchen is well equipped and stocked (this includes some staples such as spices, sugar, flour, etc.). Check to be sure that the appliances are in good working order, and keep a drawer of instruction booklets. A microwave is recommended.
• Consider durability and stain-resistance when picking out furnishings, carpets, etc.
• Provide adequate lighting in all rooms and extra light bulbs.
• A VCR or DVD player and cable are much appreciated by tenants.
• Provide an assortment of games, puzzles and children's books.
• For tenant safety – and your own protection as homeowner – check steps, deck railings, fences, indoor staircases and railings, etc. Inspect your property inside and out for potential hazards.
• Lock up personal items in a footlocker or out-of-the-way closet.
• Leave a guest book so tenants can record their comments and make suggestions about activities, restaurants, etc. Other guests will enjoy reading the comments. You can use their comments for your marketing purposes.
Tenant screening:
• When speaking with prospective tenants, ask questions about the number of people in their party and the makeup of the party. How many adults are there? How many children? Also find out if the prospective tenants are familiar with the area. Are they looking for a quiet, peaceful area or an environment with lots of activity?
• Although e-mail is often the most efficient way of making the initial contact, it should not be the only contact you have with the vacationers. A phone conversation will yield information about the prospective tenants that an e-mail might not.
• Be prepared to have willing tenants you do not want to rent to, based on something you picked up in conversation. Explain to them why you feel it wouldn't be a good fit. Your conversation should imply that you are looking out for their best interests as well as your own.
• Lastly, do not overstate the attributes of your rental or try to hide any shortcomings. You want your tenants to arrive at your home and say, "This is even nicer than we thought it would be!" Remember that happy tenants make good tenants.
Payment schedule
• A lease is always recommended, even for a weekend rental (weneedavacation.com can provide you with a sample lease).
• Ask for a deposit (generally between $200 to $500). When the check clears, send two signed copies of a lease.
• When the tenants sign and return one copy of the lease, keeping the other copy for their records, they should also send a check for half of the total rent.
• The balance of the rent should be paid a month prior to their tenancy. You might adjust this plan if the rental is more than a year away.
• If the arrangements are made very close to the time of tenancy and the rent is being paid upon arrival, you might request a certified bank check or money order.
• Be cautious about holding a reservation for someone. Consider a week as booked only after you have received a deposit.
• If you send out a lease or promise the home to prospective tenants before you receive a deposit, they may change their mind and not let you know. In the meantime, you may have turned away other interested tenants.
Lease details
• In the lease, be sure to include specific arrival and departure times. Many owners have a 10 a.m. departure time for outgoing tenants and 2 to 3 p.m. for incoming tenants. Allow sufficient time for cleaning between tenants.
• Also include a cancellation policy. If a tenant cancels a reservation and the home can be re-rented for that time period, the tenant's deposit is returned. Tenants usually don't cancel except for an emergency situation, such as illness or a death in the family; most homeowners return the deposit under these circumstances. Most homeowners refund any monies received if a vacationer cancels with sufficient notice. Some charge a 5 percent cancellation fee.
• Specify the maximum number of occupants: This number should include children.
• Note a pet policy. If you do not accept pets, state this clearly in the lease.
• Expectations regarding cleaning and bed preparation: Most owners require tenants to leave the home in the same condition in which they found it.
• You should state when the security deposit will be returned, but generally it is within 30 days of the tenancy. If you deduct monies from the deposit, be sure to include a detailed description of the repairs needed and copies of sales receipts. The law states that to withhold funds from the security deposit, you must provide the tenant with paid bills or written estimates for the damage. The security deposit should not be used for normal cleaning unless this is clearly stated in the lease. If you allow pets, you may want to collect an additional pet deposit.
Discrimination law
Be aware of the Federal Fair Housing Law, which states, "It is illegal to discriminate on the basis of race, color, religious creed, national origin, sex, age of children, ancestry, marital status, veteran history, public assistance recipiency, deafness, or other handicaps."
Map and keys
• Most homeowners send directions to the house along with the lease. If you don't have specific directions, you can use an Internet source such as MapQuest to get a printout of directions.
• You can provide a key in several ways: mail the keys to the tenants, requesting that they mail it back after their departure; arrange to have someone meet the tenants at the house; hide keys on the premises in multiple places in case one is lost.
• Some homeowners install a lockbox at their house. It contains a key to get into the house; inside the house, there are two additional keys for tenants. Tenants are asked to put the first key back into the lockbox, just in case they are locked out and/or lose a key. The combination to the lockbox is reset every season and tenants are given the combination about a week before they travel.
For tips on how to market your summer rental, visit weneedavacation.com, call (781) 239-1469 or e-mail info@weneedavacation.com
Published in Cape Business Health & Wealth March/April 2008
