There are many aspects of running a successful vacation rental investment, from investing in the right area to using the right tools.
Running a vacation rental business is something that a growing number of property owners and real estate investors find themselves doing. The market has seen rapid growth in popularity and stock over the last few years with vacation rental listing platforms like Airbnb making it incredibly easy to fill vacancies. And with this ability to make good profits on suitable properties, everyone from homeowners to seasoned investors have rooms for rent or vacation homes waiting for their next guest.
However, simply owning a vacation rental property doesn’t guarantee success. Instead, there are a number of important strategies you need to know if you're going to operate your vacation rentals as a profitable business, from the best locations to invest to additional services you can offer.
Landlord Studio was named an expert on Redfin for managing and improving vacation rentals. Check out the article we were featured in: 25 Common Vacation Rental Challenges & Solutions | Redfin
In this article, we take a look at 9 essential tips you need to know for running a successful vacation rental
Whether you invest in touristy areas, bustling urban areas or remote tranquil locations, the location will make a big difference to your occupancy rate.
For example, a property in an area that is near to tourist attractions or events will be in demand, as will a rental that’s next to the beach, lake or other natural attraction. It pays to research the best markets for buying a rental property before you invest.
If you are not actively investing but already have a vacation rental that you want to rent out, you can still maximize its potential by highlighting the area. Make your listing as descriptive as possible, pointing out the local attractions, things to do and the proximity to amenities. Not all of your guests will have visited the area before, so giving them a few pointers can make their trip a more memorable experience.
If you have the capacity, you may wish to self-manage your vacation rental. This will allow you to keep a close eye on everything and keep your outgoings low, as you are not employing extra staff. Of course, self- management will be more difficult if you are managing a remote property or somewhere out-of-state.
Nonetheless, it can be easily done using appropriate software, whether that means an excel spreadsheet or a purpose-built property management software.
While Airbnb is perhaps the most well-established and widely used short term rental platform around, it’s not the only one. In fact, you would be remiss to bypass some of the other platforms available, such as VRBO, bookings.com or even just your own social media accounts.
The right platform will allow you to create your listing, advertise it and then manage tenant communications, all from the same place.
As mentioned earlier on in this article, property management software is another option that will allow you to automate systems that will save you time and stress. You can manage your leases and reminders and collect rent online, to name a few features. Unlike platforms like Airbnb, you can also keep on top of your accounting throughout the year.
It’s all well and good having a beautiful property in a prime location, but if it isn’t properly advertised online, you may struggle to secure bookings. This is where marketing comes in, as a few tips and tricks can take your property listing from forgettable to unmissable.
While some larger platforms like Airbnb and VRBO allow you to manage most of your things from one platform, it’s still a good idea to establish and follow a clear strategy. This will help you get more leads. Here are a few things you can do:
Some property managers choose to manage their short term rental portfolios alone, but many will enlist the help of others.
At the very least, you may find that you need to hire a cleaner who can help you clean and tidy the property between guests. This is especially important if you have a high turnover rate or don’t live close to the property. Instead of traveling to and from the property in between guests, a trusted cleaner can give you the peace of mind that everything is in shape.
When you first list your property, it’s also a good idea to hire a professional photographer, to ensure that the photos online do justice to the property. Unprofessional photos may appear amateurish and won’t immediately catch the eye of a browsing guest.
Depending on the features of your vacation rental, you may also need to occasionally hire maintenance contractors or landscapers. Keeping your property clean and in good shape will attract both new guests and those who have stayed before.
Little touches like welcome hampers, personalized notes and well thought out local guides can be nice for guests to receive. Attention to detail shows guests that thought has been put into their stay.
Another important part of looking after your guests is providing the necessities needed to make their stay comfortable. After all, the last thing you need is reviews saying that there wasn’t enough toilet paper or towels. Guests may appreciate toiletries and cooking ingredients like oil and spices.
Short term rentals, especially those on platforms like Airbnb, live and die on reviews so it’s important to cultivate good ones. While you're not able to tell your guests exactly what to write in their reviews, providing a place to stay that meets or exceeds their expectations will likely result in positive feedback.
Following the tips in this article will ensure your guests have a great experience of staying in your vacation rental. But you should also remember to be responsive and personal in all of your communications too, so that guests feel like their needs are being listened to, met, and exceeded.
Rental property accounting may not be the most scintillating part of running a successful vacation rental investment, but it’s extremely important to keep on top of it, in order to take advantage of available tax deductions, and more.
Furthermore, there are plenty of metrics that can be calculated to give you a good indication of how your portfolio is performing.
Using purpose built software like Landlord Studio will allow you to complete your rental property accounting on-the-go and with ease.
Pricing your vacation rental competitively will contribute to a healthy occupancy rate. Unless your vacation rental investment is truly sublime, if it is priced significantly higher than other competing places in the area, you may struggle to rent it out. Similarly, setting your nightly rate too low could see you leaving money on the table.
Striking the right balance between offering your guests somewhere reasonable to stay, and ensuring that your vacation rental is a successful investment is paramount.
Therefore, you should price your property according to the market. Another thing to remember is that once you set your price, there is nothing stopping you from adjusting it, or introducing discounts during quiet periods, if needed down the line. Being dynamic in this way will keep your vacation rental competitive.
If you are renting out your Airbnb for more than thirty days at a time, you may want to look into offering discounts for long-term stays. Although this may seem counterintuitive, it can attract guests who then return the favor by providing you with stable income for a brief period of time.
While there are a few nuances, your vacation rental investment should be managed with just as much care as you would treat a traditional rental investment portfolio. Consider location, the potential return on investment, pricing, accounting and more.
You May Also Like: