Of all the issues we vacation-rental owners must deal with, the one that gets the least attention is the problem of freeloaders. You know what we’re talking about: relatives, friends, and friends of friends who ask to use your VR property when you’re not in residence, and sometimes even joining you when you are. And, of course, it’s assumed that you won’t be charging them. They’re blood relations and friends, after all.
They are also self-centered, inconsiderate boors, in our opinion. We’re sorry, but there’s simply no pleasant way to say it. By asking you to allow them to use your property, they are instantly putting you into an awkward position. If you say “yes,” you will probably be giving up potential income. If you say “no,” no matter how gently, you may risk souring the relationship.
Problems in Paradise
If you doubt the severity of this problem, you need only turn to Englishman Peter Mayle’s classic 1989 book, A Year in Provence. No sooner had the author and former advertising man and his wife bought and renovated a farmhouse in Provence than friends and semi-distant acquaintances began calling to see about “popping in” for a day or two. In the audio-book version, narrated by Peter Mayle himself, the chapter centering on a particularly obnoxious and ungrateful British “guest” is priceless.
Much more recently, there was a story published in the Wall Street Journal on October 31, 2011: “When Your Vacation Home Becomes Everybody’s Vacation Home” It was written by freelance writer and frequent contributor, Kathleen A. Hughes, who lives in Rolling Hills, California.
Here’s how it begins:
- “We love our friends dearly. But do we really want them sleeping in our bed? That’s the dilemma faced by many of those who buy second homes… in desirable locales. My husband and I recently learned this the hard way after buying a loft in Manhattan as a future retirement spot.
- “‘Great! Now we'll have a place to stay in New York!’ was the enthusiastic response of friends, colleagues and even a few distant acquaintances....
- “But we quickly learned that saying ‘no,’ or just failing to offer hospitality, can be very awkward, creating tensions in friendships that had never known a cross moment.
“‘Why can't you just give me the keys?’ asked one friend at a party after explaining that he and his wife were heading to Manhattan to see a play. When my husband politely declined, sputtering something about the strict co-op rules, our friend said, ‘I'm not talking to you anymore!’ and walked away. That left my husband standing next to the wife, weakly suggesting midtown hotels.”
Vacation Home? What Vacation Home?
Ms. Hughes points out that some people try to avoid such situations by simply not telling anyone that they own a second home. However, that doesn’t strike us as a workable solution. After all, what do you then say as you’re telling a friend about your weekend, and he or she asks, “You go there a lot. Where do you usually stay?”
It’s far better to be honest, should the subject come up. Just be sure that you have thought through what your response will be when someone asks to use your place.
People can be amazingly cheap and inconsiderate. Ms. Hughes cites the case of an Ocean City, Maryland, vacation-home owner who estimates his annual costs to be about $38,000. One of this fellow’s friends used the place and left a $10 bottle of wine in “payment.” Other guests would call up asking, “Have the sheets been changed?”
Pulling Up the Welcome Mat
So what to do? According to Kathleen Hughes, there are two broad categories of second-home owners: the happy ones and the “doormats,” and the doormats are in the majority by far.
Her analysis is by no means scientific, but on balance it does sound logical that most people would do anything to avoid unpleasantness and are thus inclined to hand over the keys when asked. Ms. Hughes also points out that a true friend wouldn’t ask. A true friend would be aware of the time, effort, and expense required to prepare your place for guests (not to mention the potential loss of income, we might add).
The happy second-home owners, says Ms. Hughes, are the ones who have no problem setting boundaries. The man who was paying $38,000 a year to carry his condo, for example, created a “club” offering memberships to his formerly freeloading guests: $2,000 a year for the right to stay in the condo for three weeks, plus $10 for each night actually spent there, plus cleaning costs. Some who had been using the condo for free turned him down, but 13 friends quickly signed up. The owner is now getting $30,000 a year in income instead of subsidizing everyone.
Our Advice for Handling Requests from Friends and Family
We think that’s a very clever solution to the freeloader problem. But we have an even simpler idea, which may be why we ourselves have never had a freeloader problem. We have made it clear from the moment we began offering our property to guests that it’s a business for us, and that we depend on it to generate part of our annual household income.
That shifts the entire perspective from the notion that the property is sitting idle and unoccupied, “So why can’t we stay there?” to “Oh, we didn’t realize it was an important moneymaker for you.” Friends and family members quickly grasp the opportunity cost involved. Each day we let them use the place is a day we can’t rent to a paying guest. And as our accountant would surely remind us, it may also have tax implications because any days we give away for free will likely fall under the IRS’s definition of “personal use” of the property.
Of course, that’s not to say that you can’t give some special considerations to friends and family members who express an interest in visiting your vacation home:
- Offer a small “friends and family” discount (5 or 10 percent). Set this up ahead of time, and then when you’re asked about your property, you can respond by saying, “We’d love for you to you consider booking our place. We even have a special ‘Friends and Family’ rate.”
- Clue them in to the benefits of off-season rentals. Many people aren’t aware that vacation-rental rates often drop dramatically—sometimes 50 percent or more—outside of peak season, when kids are back in school and the demand isn’t as great.
- Shorten your minimum stay. If you usually require a 7-night minimum but find yourself with a few nights open between guests and you’d prefer your place not sit empty, you might give friends or family members the chance to book those nights.
- Waive the damage deposit. Many long-time VR owners reward their repeat guests by not charging a damage deposit, the notion being that they’ve established a relationship with each other and don’t need the damage deposit to ensure that the property will be left in good order. You could extend this same courtesy to friends and family members.
The bottom line is that if you own a second home, you need to be prepared for dealing with would-be freeloaders. You have to set boundaries. And you have to stand firm. Whatever you do, don’t be a doormat. Any “friends” who drop you because you wouldn’t let them stay in your place when you’re not using it were never true friends in the first place.
Alfred and Emily Glossbrenner
Alfred and Emily Glossbrenner are the authors of the book/CD package How to Make Your Vacation Property Work for You! and the founders of FullyBookedRentals (www.fullybookedrentals.com), a website focused on helping new and experienced VR owners advertise, market, manage, and make money from their second homes.