Create a Mission The most obvious question you need to answer is: What would you like to accomplish by renting out your vacation home? The answer might seem simple—the money, however you should look more deeply into the details and create objectives as well as a plan for achieving those objectives.

Set Objectives Decide how many weeks would you like to use your home yourself, and how many weeks per year would you like to have rented. For example, "I'd like to rent my vacation cottage on Cape St. Mary's for 15 weeks next year." Next, decide your financial goals and objectives. Are you looking to have your rental revenues pay for all of your expenses associated with owning your vacation home or do you simply to off-set some of your costs? Basically you should be able to answer the question, how much rental revenue do want or need to generate each year?

If your goal is to have your rental revenues pay all of the expenses associated with owning your property, Christine Karpinski, author of How To Rent Vacation Properties by Owner has developed a formula to help you calculate your break even formula.

Apply the Formula If your monthly mortgage payment is less than or equal to one peak week rental, and you rent approximately 17 weeks per year, your property should break even.

• Your mortgage payments (including principal, interest, taxes and insurance) should be roughly equal to, or less than, one peak week's earnings. 
• Peak weeks—the highest earning weeks of the rental season. Usually there are 12 peak weeks in a rental year. So if you rent these 12 weeks, you will have enough revenue to pay your mortgage payments for the entire year. 
• Other costs, including bills for your phone, power, cable, and association dues, are paid by your earnings from approximately five off-week rentals.

So, even by renting only 17 weeks out of the year, you can still break even. These other costs, as you can see, are also paid for.