Dear Dave,
How do you feel about someone buying a vacation home, then renting it out when they’re not there?
Randall Dear Randall,
As long as you’re debt-free and buying with cash, I’m coolwithit.Avacationhome is a really nice “extra” as you start building wealth. It’s still basically a very large, very expensive toy. Still, it could become something of a money maker for you if you play your cards right.
But here’s another side to vacation home rentals that most folks don’t consider. You might make some money, but there will almost always be several weeks during a year when it sits there empty. Chances are you won’t get rich renting it out, but if you’re talking about something that’s more of a plan to offset the annual costs of your toy, I don’t think you’ll be disappointed.
Be ready to deal with lots of spills on the carpet and damage from your guests, along with general maintenance and repairs. There’s always something that needs attention when you own a property. But if you can handle all that financially and emotionally, I think you’ll be fine.
Best of luck, Randall!
—Dave Dear Dave,
My husband and I have run our own small business for nearly 10 years. Our largest client, who is also a friend, is almost three months behind on the bill. He has always been good in the past about paying on time, but we work on a 30-daypaymentperiod.Can you give us any advice on how we should handle this?
Melissa
Melissa,
In my mind, there’s no reason to level accusations or make threats in a situation like this. There are personal dynamics involved, and my guess is he’s probably not trying to outright cheat you.
If it were me, I’d go to his office or ask him out to lunch, and then have a friendly sit-down talk. Listen to what he has to say about being so far behind with his bill, but at the same time you need to let him knowthatyoucan’tfunction as his bank. You’re a small business, and you need your money. Some kind of understanding and agreement have to be reached.
For starters, a fair request would be asking him to help things along by trying as best he can to get current on his bill as soon as possible. At the very least, he needs to do something to reduce the amount owed within 10 days. You’ve provided services for him, and you’re owed money that’s long past due, so there’s nothing wrong with this. I’d also establish an understanding that once he’s caught up on thepastdueamountthatall payments for services going forward will be due within 14 days after delivery.
Now, he may not like this. If he pushes back too hard, you may have to switch to a cash-only basis with payment due on delivery. If it were me, and he didn’t like any of these options, I’d politely suggest he take his business elsewhere.
Like I said, he’s probably not a bad guy, just another smallbusinesspersonwho’s disorganized. That’s not an uncommon thing. But you definitely need to correct this behavior before it gets any further out of hand. You’ve got a business and a livelihood to think about, too!
—Dave