Owning a rental property can be an incredible way to generate passive income. However, not every income property is a success. If you’re hoping to break into the vacation rental market, be prepared to invest time and money to get started. There are many tips and tricks to learn to help you do well.
Pick Your Dwelling
It’s important to start with the best base to meet your goals. Each type of dwelling has benefits and drawbacks.
Condos
Condos are a popular vacation rental choice. The purchase price is often more affordable, there are amenities, and they’re low maintenance.Daytona Beach condos for saleare usually in the heart of attractions. That makes them a smart choice for tourists. However, you may be subject to HOA fees and restrictions. The nightly rental price will also be lower than other types of abodes.
Houses
Purchasing a rental house comes with a different set of considerations. You can charge a higher rental fee due to increased privacy, larger renter capacity, and outdoor space. As the owner, you will have more freedom with rules and regulations. Unfortunately, houses also come with more work and expenses. You’ll be responsible for all the maintenance.
Unique Stays
Unique stays are a growing area of vacation rentals. Tourists will pay to rent tree houses, boats, trailers, yurts, and more. Owning something original means decreased competition and potentially increased income. You may face challenges like acquiring land, building out the dwelling, and special maintenance.
Calculate Costs
To determine your budget and net profit, you must first calculate all of your costs.
Fixed
Fixed expenses are the easiest to calculate because they don’t change month to month. Examples include your mortgage, insurance, taxes, and homeowner’s association fees. If you elect to use a management company, the services will come with a monthly fee.
Variable
Variable expenses are reoccurring, yet they change over time. When working them into your budget, you can use a yearly average. Be sure to factor in utilities, cleaning fees, and routine maintenance inside and out.
Emergency
Don’t forget to account for emergency costs. Appliances break, systems fail, accidents happen, and damage can wreak havoc anytime. Not only will you have to pay for repairs, but you may also miss out on rental income while items are being fixed.
Select Area
The area your rental is in can make or break your success. Take care choosing the best location.
Competition
Before you buy, research your competition. Look into other private rentals, hotels, and resorts. How much are competitors charging per night, and are they regularly booked solid? If you see low fees and high vacancies, the market may be oversaturated.
Activities
Look for an area that has a draw for tourists. Proximity to beaches, hiking, amusement parks, and universities are popular choices. The more activities an area has, the more likely you are to stay booked.
Safety
Safety is a major priority for many travelers. Those who are on vacation often visit unknown locations, carry cash, and spend time outdoors. Make sure to select an area that will leave your guests feeling protected and secure.
Price Accurately
Your pricing should be high enough to turn a profit but low enough to attract visitors. It’s best to be upfront and avoid hidden fees.
Search Comparables
You want your price to be on par with or slightly below other rentals in the vicinity. Get online and research units with similar locations, amenities, aesthetics, and capacity.
Adjust Seasonally
Consider if the popularity of your location changes seasonally. If so, you may want to adjust the prices throughout the year. Don’t be afraid to maximize your profits by charging more during peak times like spring break, summertime, or Christmas. Lowering your prices during the offseason can also keep your property occupied more regularly.
Provide Discounts
Providing discounts can benefit you and your guests. A commonly offered discount is a reduced price for longer bookings. Not only will the renters be happy, lower turnover means less work and expenses for cleaning between stays. Offering savings for returning guests also contributes to loyalty, referrals, and positive reviews.
Market Properly
You can’t expect your property to be busy without proper marketing.
Write Description
You need to write up a high-end, detailed description of your property. Let potential renters know everything you have to offer, including amenities, special features, and nearby attractions. Make your listing sound inviting and intriguing.
Take Photographs
Don’t skimp on the number or quality of photographs you include in your listing. Would you stay somewhere you haven’t seen? If not, don’t expect other people to either. It’s best to include pictures of every room, the surrounding area, and views during various seasons.
Advertise
Once you’ve prepared a description and pictures, decide where you will advertise. You can post on multiple rental sites, social media, your own website, or hire a management company. Using several avenues will keep you busier, but be cautious not to double book.
Interact With Guests
Having positive interactions with your guests can grow your business.
Greet Visitors
Find a personal way to greet your visitors. You can opt to meet them when they arrive to show them around the property. If you aren’t available, consider sending a welcome text or email to verify everything meets their expectations. Including a welcome gift also makes a great impression.
Ask For Reviews
Renting from a private party can be intimidating. You can put guests at ease and gain their business by having positive reviews. Some sites like Airbnb will even mark you as a super host if you have great reviews. If you establish a positive relationship with guests, follow up after their stay to ask for a review.
Invite Back
You shouldn’t be afraid to ask for business. Repeat travelers are a perfect way to rent out your property. You can try to fill any lulls in bookings by inviting past visitors back.
There’s a lot to learn when you break into the vacation rental business. As long as you educate yourself, you can be making money before you know it
