Equip Your Home For Guests
Your home or apartment should be equipped to make your guests stay as easy and pleasant as possible. This is the way to get good reviews and repeat business on sites like Airbnb and VRBO. You should, for example, provide:
- clean towels and linens you should have a set of at least two towels, hand towels, and washcloths per guest
- extra blankets
- an ironing board and iron
- dishes, silverware, and pots and pans sufficient for the maximum number of guests you host
- a microwave oven
- coffee maker, teapot, and toaster
- basic seasonings and food items like sugar, salt, butter
- cleaning supplies including hand soap, dishwashing liquid, carpet cleaner, all-purpose cleaners, bleach, and disinfectant
- basic toiletries like toilet paper, paper towels, and tissues
- a first-aid kit
- all remotes necessary to operate the television and other devices
- trash can liners
- pillow protectors and mattress pads, and
- extra light bulbs.
Most guests will expect to have access to the Internet. If this is not available, make sure your guests are aware of it before they rent with you.
Although not absolutely necessary, there are lots of other things you can provide your guests to make their stay more pleasant–for example:
Some hosts get creative and leave goodies for their guests like bottles of wine, chocolate, fresh fruit, or local delicacies.
Draw up a list of all the items you need to buy , and be sure to keep your receipts for tax purposes.
How To Make Money On Vacation Rental Property
There are two main approaches you can use when it comes to building a vacation rental business.
You can invest in buying property, which you can also use as your second home. This path requires thorough research to determine which locations will draw a steady flow of guests.
Another business model is rental arbitrage when you rent a property long-term and then re-rent it to travelers short term with the permission of the landlord. This path allows you to make money on vacation rentals without owning the property.
Youll need to list your vacation rental properties on platforms like Airbnb, Booking.com, and Vrbo and do your best to ensure perfect guest experience. This narrows down to:
- fast responses to guests requests before, during, and after their stay
- providing them with all the necessary information about your place and neighborhood
- having a flawless check-in and check-out
- keeping the place tidy and equipped with the necessary amenities.
Create Listings On Multiple Sites
Now, the vacation rental property is fully prepared and streamlined, and its time to create listings! While many new vacation rental hosts turn to Airbnb first, its best to list a property on multiple different sites to maximize bookings and revenue. Aside from Airbnb, hosts should be sure to update their business website to allow for direct bookings. They should also check out other vacation rental listing sites like RentalTrader, Vrbo, Booking.com, and HomeToGo. RentalTrader, in particular, is a great choice for new hosts because its simple to sign up and list a property. Plus, host fees are extremely low at just 4.5% per booking.
When thinking about how to start an Airbnb, remember that good listings lead to more bookings. This means that hosts should concentrate on getting high-quality photos that showcase all that their vacation rental has to offer. The quality of the writing in the description is just as important. Some hosts choose to hire professional copywriters and photographers to help them create the best listing possible.
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Are Vacation Rentals Profitable
Investing in vacation rentals is an excellent way to earn some passive income. But can you make good money with a vacation rental property? Essentially, vacation rentals can be profitable because they are popular with people renting properties for a short period.
The primary factor that affects profitability is location. Why? Profitability is based mostly on occupancy level, demand, competition, and rate, so the more attractive the location, the higher probability the vacation rental will be profitable.
Besides, short term vacation rentals can outpace long-term rental properties when it comes to potential rental income. Thats why a vacation rental is a good investment for those who want to start investing in real estate.
Investing In Vacation Rental Property
With platforms like Airbnb and Homeaway being used by more and more people each day, investing in vacation rental property has become a goal for many, whether they plan to eventually use it themselves, or simply want to diversify their real estate investment portfolio.
The first step in buying a vacation rental property is to pick the right place. Andrew McConnell writes about vacation rentals and the sharing economy, and is the Co-Founder and CEO of Rented.com, the world’s largest marketplace for vacant rental weeks. He advises that vacation home buyers be honest about their goals and use those goals to guide their choices.
The first thing to ask when buying a vacation property is: Is this an investment or a vacation home? If you are really intending it to be a vacation home, many of your design decisions will be based on your own personal tastes, which may not align with what will actually maximize rental income, i.e. guests don’t always have the same tastes as you.If you want to be as good of an investment as possible, your own desires for the home are secondary to those of the guest. There are tradeoffs with each. In one you get the vacation home of your dreams. In the other, you get outsized returns. It is often difficult to get both. â Andrew McConnell
When shopping for a vacation home with a focus on renting it, Margot Schmorak, co-founder and CEO of Hostfully, advises buyers to do plenty of research.
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Find A Locksmith To Put A Lock On An Interior Closet So That You Can Store Personal Items Or Extra Cleaning Supplies
We have a both a personal closet and a storage closet for supplies and cleaning items, paper products, toiletries such as guest soaps, hotel shampoos and lotions etc. Our cleaning crew has access to the supplies closet and uses that to replenish any used items after each rental. Our locked off closet does have a sign that reads “owners closet no access” to make renters aware it is off limits. We do use our property from time to time for personal use and it is nice to have some personal items available that we don’t have to pack and take each time we go. You can also lock off one cabinet in the kitchen and keep any pantry items and special kitchen items that you do not want renters to have access to.
Youre Ready For Starting A Vacation Rental Business
If youâve been tossing around the idea of starting a vacation rental business, itâs time to go for it! Not only is it fun, but itâs also a profitable property investment that brings a lot of rewards. After reading our guide, now you have the knowledge of how to start a short term rental business in 6 steps in addition to the best tools that youâll need as a real estate investor.
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What You Need To Start A Vacation Rental Business
Create a Business Plan
One of the biggest reasons new property managers fail is that they donât run their vacation rental like a business. Sitting down and creating a solid business plan will help you get your ideas and expectations down on paper instead of swirling around in your head . Along with a business plan youâll need:
- An Operations Plan
- A Marketing Plan
- A Financial Plan/Revenue Management
If youâre new to starting your own business, you may want to sit down with a professional to get all of your documents sorted out before you move forward.
Get the Home Ready for Guests
Once you have a clear business plan, you can move on to the next phase. Itâs important to keep in mind the comfort and convenience of your guests when preparing your home. If youâre working room by room to upgrade your home, focus on kitchens and bathrooms first. These are areas where guests expect cleanliness and functionality. Whether youâre going for a luxury vacation rental or something more fundamental, guests expect certain amenities in their home to ensure a comfortable stay. Make sure you equip your home in a way that allows guests to feel at home.
Set the prices
Write a Compelling Vacation Home Descrpition
Create the Required Documents
How To Get Your Home Ready For Short
By Stephen Fishman, J.D.
When your rent out your home or apartment to short-term guests, you can’t simply hand your guests the keys and expect everything to take care of itself. You need to carefully prepare your home in advance for paying short-term guests, many of whom will be expecting cleanliness and comfort standards on a par with those found in a hotel . The better job you do getting your home ready the easier your guests’ stayand your life as a host will be.
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Understand The Rhythm Of Vacation Rentals
Earlier, we touched on the ebbs and flows of demand, which deserves an even closer look. Vacation properties are much different than traditional rentals: the income generated is often dependent on the season. A house near the water will attract more interest in the summer. A house near a ski resort will thrive during the winter months. You need to know what you can expect during both the peak seasons and off months. You also need to have an idea of what the overall monthly expenses will be. You need to factor in that you will have to furnish the property and clean it every few weeks. The homeowners insurance may be increased, and there will be flood insurance if the house is near water. If you plan on buying the property, you will need at least a 25 percent down payment, and you can expect a higher interest rate.
How Technology Can Help You Run A Vacation Rental Business Successfully
Mar 13, 2020 | Homeowner Tips
Technology has had a huge impact on the world today. In fact it has become a necessity in many ways, thanks to the convenience it offers to all of us. In the vacation rental business, specialised softwares have streamlined various aspects of vacation rentals such as operations, distribution, marketing , guest check-in & check-out process and so much more.
Bringing latest technology to their vacation rentals have enabled multi-fold growth to homeowners in breakneck speed, which couldnt have been possible otherwise.
So, if youre running your vacation rental property the old fashioned way and want to understand how technology can help you transform your the vacation rental business, read through to know more about the opportunities technology presents to you
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Set An Acceptable Price
One of the challenges of owning a short term rental property is to find the right rental rate. As an Airbnb host, if you charge too high, itâll scare guests away. On the other hand, charge too low and you may lose money on your bookings or attract the wrong crowd. One mistake that beginner property investors starting a vacation rental business usually make is setting the rental rate based on their financial standing or emotional attachment to the house. Donât do that!
Instead, what you should do is to check comparable properties in your area to find a competitive price that guests will pay and that will make you a profit. Moreover, smart Airbnb hosts use an online real estate investment tool called the Airbnb Profitability Calculator. Among its many uses, this tool provides data for Airbnb rentals like the cap rate, cash on cash return, Airbnb occupancy rate, and expected Airbnb rental income.
As a real estate investor starting a vacation rental business, youâll get this data on the property level AND the neighborhood level. So, youâll be able to analyze and compare various investment properties in your location to see how profitable your Airbnb vacation home rental will be and determine the appropriate rental rate thatâll yield a good return on investment.
First Impressions Matter Even In Vacation Rentals
Matt Woodley has been a vacation rental host for the past 12 years, with properties in New Zealand and Brazil. Matts taken advantage of the major platforms like Airbnb and VRBO to market his vacation rentals. Having been in the industry for so long, Matt focuses on the guest experience. Heres one tip in owning a vacation rental he offers to new hosts:
Before your guests even set foot in your vacation rental, set yourself up for a 5-star review by making a great first impression. Take time to update your landscaping and ensure the path to the front door is swept clean and free from obstacles. In cold weather, he walkways always have to be shoveled and de-iced. In warm climates, water plants frequently and remove dead greenery immediately. Every few months, wash your windows and check the exterior of the home for any maintenance that might be necessary. And keep in mind that your guests may be arriving after dark check that theres ample lighting from their parking spot to the entryway.
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Research Your Hoa Municipal And State Rules And Bylaws
Fred Davidson has operated vacation rentals in Montreal for the past five years. Fred invests in new construction condos, which he runs as vacation rentals before converting them to long-term leases. Heres a tip he offers to hosts who operate vacation rentals in urban areas:
Big cities represent significant earning potentials for vacation rental hosts. Festival season, summer tourists, and conferences are great for boosting your average daily rate for the same operating expenses. But before you buy a condo as an investment to operate as a vacation rental, make sure you read every bylaw, rule, and regulation governing vacation rentals in your area. Many new hosts think reading the condo or HOA rules and ordinances is enough. Just dont forget that your municipality, as well as state , might also have regulations on short-term rentals. Many of these restrictions carry hefty fines for small infractions that can dig into your bottom-line or land you in legal trouble.
You Have To Manage The Property
A vacation home isnt a set-it-and-forget-it sort of investment strategy. Its one of the most hands-on investments you can get yourself into and requires year-round work.
At the very least, youll have to clean, prep, and restock the property between every guest. If your property gets popular, that could mean a serious amount of work. .
You could hire a professional property management company to deal with the turnover tasks, repairs, maintenance, and other hassles of the home. But it wont come for free. According to industry averages, short-term rental property managers generally charge 15% to 40% of your income. Yikes!
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Manage Your Rental Property
All thats left now is to decide how youre going to manage your rental property. Will you do it yourself, or hire a company to do it for you? Hiring a manager would certainly save you a lot of time, but make sure you can afford the fee. Either way, here are a few things youll need to consider before your first guest arrives.
- Youll need a system for welcoming guests. Its unlikely that you will always be able to be there to meet your guests in person when they arrive, so decide how they will get the keys to your property. Consider setting up a keypad so that renters and staff can easily get inside, and you are able to change the passcode as often as necessary.
- Establish the cleaning schedule and routine for before and after each guest. Who will be doing the cleaning and laundry? Dont forget the little details like who is in charge of stocking up on cleaning supplies and toilet paper.
- Consider who will take care of any necessary repairs on the property.
- Hire a bookkeeper or be sure to gather professional advice in order to keep your rental finances organized.
Ready to get started?
Biggerpockets Joshua Dorkin & Brandon Turner
This is an inspirational podcast that hosts successful vacation rental property owners who share their stories with the listeners and tips on how to keep going until you succeed. The hosts have a knack for finding and conveying the most uplifting and inspirational industry tales on almost every episode.
What Youll Learn:
- How to successfully grow your business exponentially
- How to have a winning mindset
- How to mentally prepare yourself for the vacation rental business
Tune in at BiggerPockets
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How Profitable Is A Vacation Rental Management Business
The vacation rental business is most certainly profitable, with the industry yielding over $80 million in revenue in 2019 alone. This places the average revenue per user at upwards of $100,000, which can, of course, fluctuate based on the quality of the property, the level of service provided, efficiency and effectiveness of internal operations.
Regardless of the size and shape of properties you manage, the key strategy for maximizing your profit is implementing a dynamic pricing model that reflects dips and rises in demand. Airbnb ownership guide will give you more insight into how profit works.