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Renting Your Cottage

michigancottageforrentPerhaps you are thinking about buying a Michigan cottage and renting it out for a portion of the season or renting it out during the off season to offset some of the expenses.

Before you make any decisions, you should determine the true cost of operation. There are the obvious costs; real estate taxes, utilities, insurance. But there are also less obvious costs when you decide to rent out the cottage; wear and tear or replacement of furniture, cleaning costs, cost of advertising, property management costs or added travel costs if you are the property manager.

Take the total cost of all the expenses and divide it by the number of weeks in the rental season and that number will be you true cost of owning the cottage. That is cost of owning before any profit.

You will also need to do a market study of what others are renting their cottage for. Look for cottages with “For Rent” signs in front of them and then call them asking about their rates and amenities. Take note of those you see advertised in the local papers as well as any in your hometown paper. Calling on the ads asking a few questions is an excellent way to start as well as doing an internet search for lakefront cottages for rent. Keep notes as to locations prices and amenities as it may be confusing after you talk to a number of different people.

Renting your waterfront cottage to a friend or family member at a reduced rate is quite different than renting it to a stranger . You know your friend or family member and expect them to care for your property. Renting to a stranger can be a different story. In that case do your homework and charge the market rate to offset damages that may occur.

Written by Dave.