This couple only rents their lake house to ‘pay as you wish’ friends

It took a while – we looked at 117 houses in the Hudson Valley, but that is another story – but 13 summers ago we found what seemed like a perfect place for us: on a small, quiet lake, just over an hour from the city. On one side we had a wooded lot, and then a barely visible house owned by a rarely visible older couple. On the other side, much closer, was a little house with peeling red paint, but we were told it was owned by an elderly widow “who hardly ever comes up to the lake.”

It was true. The elderly widow spent a grand total of two nights at the house during our first few years on the lake. Both those times — two one-night trips — we went over and said hello. She said we could park cars in her (much bigger) driveway when we had parties. We sometimes sent her photos of her plantings as they bloomed, and generally kept an eye on the place for her. When lightning struck both our houses, our handyman went over and turned off her power, and we let her know to call the utility company. We even had her over for Thanksgiving in the city one year.

When the widow’s nephew looking after the house told us that she was moving back to her native Germany and none of her family wanted the house, we were bummed. We loved having an empty house next to us, though it was becoming a bit of an eyesore. Besides needing a paint job, the house’s roof was covered in thick moss. Sometimes when the breeze was blowing toward us, we could catch traces of mold or mildew. The stone walkways were cracking and dangerous. The deck was falling down.

What mattered to us was the likelihood that someone would buy it, probably someone with noisy kids and cars and pets, and almost surely knock it down. We would suddenly have neighbors on top of us, and a teardown would probably mean a year of construction, at least. Noise, sawing, hammering, heavy vehicles, people hollering. We had gotten happily used to not having immediate neighbors.

Then the widow’s nephew came to see us. “Before we put it on the market,” he said, “are you interested?”

No, we weren’t. We didn’t want or need another house, especially one that needed tons of work. We liked having a free parking lot and no neighbors.

But then we thought about it. If we bought the place, there wouldn’t be a teardown next door. There wouldn’t be kids and a barking dog and SUVs right on top of us. And it would be great for us to have more space.

Our twenty-something kids often brought gangs of friends up to the lake, and we loved that, even if it sometimes meant not knowing if we were going to be four or  six or 11 for dinner on summer weekends, right up until I turned on the grill. Their friends were often stringing hammocks or throwing sleeping bags on floors for impromptu sleepovers. Maybe if we had a little guest house next door our kids would come up more often — and maybe we wouldn’t have to clear out when they wanted to take over our house for a weekend with a gang of friends.

But could we afford to buy the house next door? Maybe. Just. Then could we afford to keep it? How? The obvious answer was to rent it out when our kids weren’t around. Airbnb
ABNB,
-2.86%
or VRBO would give us the flexibility to save weekends and holidays when they might come up with friends.

We had never seen ourselves as landlords. We didn’t like the idea of renting to strangers. Too many hassles, too much paperwork.

We decided to try something crazy: a guest house for friends and family only. No rent, no lease, no deposit. No advertising, no listings, no marketing. If we could break even on the running costs – taxes, utilities, maintenance, etc. – maybe we could afford to keep the place. In theory, our guests – all friends and family (except for our kids and other close relatives, of course) – would make contributions.

So we bought the place – this was in the spring of 2019, three years ago – and let our kids and their friends use it for a summer in its decrepit state, with the deck blocked so no one would fall through. Then we spent most of 2020 renovating.

Our handyman and his helper knocked down interior walls and opened up the place so it had one big kitchen-dining-hanging out space, along with two bedrooms. They replaced the three (!) toilets, built a new deck, remediated the mold and mildew, and painted inside and out. We had the stone walkways repaired, and worked with a gardening crew to clear brush and upgrade the long-neglected garden. Everybody but me contributed design and decorating suggestions.

The place turned out to be a really attractive and appealing getaway, and just over an hour from the Upper West Side.

Last year, via word of mouth and a email list of several dozen likely suspects, we began telling friends and work colleagues about it, and promising that we’d be happy with contributions well below the typical range of $250-$400 a night for a cool two-bedroom cottage or cabin on a beautiful lake for swimming, fishing, sailing and paddling. (No jet skis or gas motors.)

We stocked the kitchen with basic supplies and good kitchen gear, down to the salad spinner. We got some new (or lightly used) furniture, and repurposed some of our furniture. With our kids, we decorated and furnished the place to our taste, as if we were living there, down to the record player and good selection of vinyl.

And I have to say, a couple years into this crazy experiment, it’s sort of working. We’re hardly overflowing with guests, but we’re moving in the right direction. We’re not breaking even yet, but we’re getting there. And with some explanation, our guests seem to appreciate that this isn’t an Airbnb; it’s our house, and we want them to use it that way.

“I am a terrible landlord, and an even worse handyman,” I tell every guest. “If you’ve got a complaint, if you need something fixed, go home and I will refund your money.”

So far that hasn’t happened. Indeed, we find we’re already getting repeat guests. They restock the olive oil or paper towels. They leave books and booze and buy records to donate to our collection. They leave wry anecdotes and observations in our house journal (it’s not a guest book or thank-you book).

Some of our guests are longtime friends eager for a getaway from the city. Some are friends or relatives of lake neighbors we trust. Some are former grad-school students of mine in their twenties and thirties who live in the big city and cannot afford a woodsy lakefront getaway.

A few guests have brought their remote work with them, and switched off their computers at five o’clock to go jump in the lake. Some guests have used the place as a writing retreat. One has broadcast virtual  concerts from the rebuilt deck. We sometimes have happy hour or dinner with the guests we know best. Some tell me they see the place as their country house until they can afford one of their own.

“I’m a millennial,” one told me. “I’ll never be able to buy anything.” She said we’d be seeing a lot of her for a long time. Fine with us. She’s exactly the kind of guest we want.

When the basement flooded due to a burst pipe on a summer Saturday evening, the guy staying there went down and turned off the water and hollered for us to come over. He and his wife were really patient with the plumbing crew rattling around for most of the next day.

As for rates, I often tell people what others have been contributing, and never had anyone try to bargain it down. I frequently invite them to make an offer. Sometimes it’s more than we would ask, and we say, “Thanks, that works for us.” Once in a while someone lowballs it; when one guy suggested $400 for a school holiday week, I countered that most people would pay $1,200, and he wired the money within minutes.

Incidentally, the idea that we’re not formally charging rent, and that people are making voluntary contributions, is not a tax dodge. Whatever we call it, our accountant says, for tax purposes Uncle Sam is calling it rent income.

We’re not breaking even – yet. But I am encouraged. Perhaps the biggest relief is that I might not be as terrible a landlord as I imagined. I am keeping up with the schedule for who arrives and departs when, and for bringing in our whirlwind of a cleaner between guests.

One of the few people we didn’t at least meet beforehand is the guest who is next door right now – an English grandmum here to spend some time with friends who live a mile down the lake: her son, daughter-in-law and sweet 2-year-old granddaughter.

“I am a lame landlord and an even worse repairman,” I told her when she arrived. “If there’s anything you need at all, don’t hesitate, any time at all … to call your son.”

This article is reprinted by permission from The Escape Home, a newsletter for second homeowners and those who want to be. Subscribe here. © 2022. All rights reserved.