How to Make Money on Vacation Rental Property [10 Tips]
Owning a vacation rental property can be more than just a place where you spend the occasional weekend when you have some time off, or where you want to retire. If you plan things right, owning a vacation rental property can make you money, and it’s even possible for a vacation rental to cost you virtually nothing. Read on to find out the secrets of how to make a vacation home pay for itself.
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➜ How to Make Money on Vacation Rental Property
1 – Promotion
If you want to know how to make a vacation rental pay for itself, you have to advertise and promote your rental. It doesn’t matter how well located, decorated, or priced your property is, if you do not advertise and promote your property, you will not have customers. Websites like Grand Welcome can help travelers know about your property including price, pictures, and amenities.
You should also consider making a website about your property. This gives potential customers an in-depth look into your location with a detailed walkthrough. When you do create a website, don’t forget to include part of it that shows the local attractions and events that are accessible from your property.
For the best amount of traffic in your vacation rental, you have to spend some time and maybe even money in advertising and promoting it.
2 – Single Night Rentals
Long stays at your property are what you want from your renters. The longer they stay at your property, the fewer days it’s vacant. While it can be a good goal to have long stays, and some rental owners even require a minimum of three or four nights, don’t disregard single night rentals.
These rentals might not be the best profit margin for your property, but including them as an option, especially during the off season, can be a small form of revenue. When you’re looking to know how to make money on vacation rental, consider allowing single night rentals. A small revenue is always better than your rental property being vacant and making no money.
3 – Open During Peak Season
If you have a property that has a peak season, you need to do everything in your power to make sure that it’s booked during that season. Having a property going through maintenance or renovations during the busiest time of the year can cost you a large chunk of income.
One of the biggest mistakes some owners make is to use their property during the peak season, rather than renting it. While you may have gotten the rental so you could use it when you wanted, by occupying it during the peak season you’re losing money you could potentially be earning if you had renters in it.
4 – Don’t Slack on Maintenance
The quality of your property plays a major role in the reviews and feedback you get on your property. Once a few bad reviews get out that your property is dirty, or not maintained to a livable standard, you will quickly lose customers.
Knowing how to make money on a vacation rental property is as easy as keeping up with maintenance requests and needs. Despite your best efforts in advertising, you will have vacancies. Do not treat these days as off days for you. During the vacant days, maintain your property. Have it cleaned and maintained frequently. If you are not tidy or handy yourself, it’s often well worth the investment to hire an outside service to handle it for you.
5 – Invest in Amenities
Spending a bit of money to invest in a grill, pool, hot tub, pool, or deck can bring your property higher traffic than an identical nearby location. When it comes to two competing locations, a simple amenity or upgrade can be the difference that brings people to your rental property.
If you don’t have the budget for upgrades when you first purchase the property, save the income you make from the first few months and re-invest in it. This can give you the time to learn what your renters are looking for and cater directly to them.
6 – Location, Location, Location
When purchasing your rental property, find a location that others would be interested in. While you might think that owning a vacation rental in a town smaller than some high schools could be a big investment, you’re quickly going to find that the market for that property is non-existent.
It’s smart to find a location that has nearby attractions that will continually bring in revenue. Your goal is to have as few vacancies as possible. Some locations are traps and will look temporarily profitable, but in the long term are potential bad choices. Locations with very seasonal high periods (ski resorts) will be booked solid during the winter, but during the spring, summer, and fall when there’s no snow on the mountains, you won’t have nearly as high demand. It is possible in these situations to increase the costs during the high season to offset the off season, but it’s always better to have consistent rental than a rollercoaster of highs and lows.
7 – Start Small
There’s a lot to consider when dealing with rental properties, and it’s possible to get overwhelmed when trying to juggle and manage everything. When you first start, avoid burnout and anxiety by starting small. Starting with a small condo or apartment might be the best way for you to dip your toe into the vacation rental industry without biting off too much.
By starting off small you can learn some of the industry standards and the ins and out of the market without setting yourself up for major losses. This can be invaluable with future investments that you want to make as you diversify your portfolio.
8 – Share Rooms
One of the biggest mistakes when pricing and advertising a property is assuming that only one person can be in one room. Consider your property like a hotel room. Just as a hotel room is built to accommodate multiple people at a time, groups are looking for a property with large rooms that can fit everyone, and they are willing to share bedrooms. A family of five does not need five bedrooms.
By correctly advertising the range of guests your property can accommodate, you will be able to bring in larger groups, which can lead to higher profits.
9 – Avoid Fixer-Uppers
It might seem tempting at first to find a cheap deal that “a bit of paint” could fix, but oftentimes these fixer-uppers become a bottomless pit for your time and money and are not worth the investment. It is typically better to pay more money upfront for a property that is in good condition rather than thinking you might be able to flip a fixer-upper.
When you buy a property that needs extra love and attention before it’s rentable, you’re starting with a property that is failing. You will have to invest even more money into it before it becomes competitive on the market. Rather than instantly starting the rental process and being able to get income from renters, you’ll have to wait and invest more money that puts you only more in debt.
10 – Competitive Pricing
The best way to maximize your occupancy and avoid vacancies is to price your property well. This is a fine balance between what will bring you a profit versus what the consumer is willing to pay. To create the best pricing, pay attention to what other vacation rentals in the area are charging.
Remember that your pricing can also influence how long renters are willing to stay at your property. It’s better to have a long term rental that lasts four or more nights than short term stays with long periods of vacancies between them.
Part of your pricing should include more than just the cost of the mortgage. You should also include room in your pricing for maintenance, taxes, HOA costs, and any other fees and charges that you will experience in a year. If you don’t take into account the need for maintenance and care of your rental property, you will have to pay for those costs out of pocket, which will reduce how much you make from it.
Grand Welcome Can Help You Grow
Can you make money with vacation rentals? Yes, if you invest wisely and put in the work, there’s a good chance that your vacation rental can be profitable. For extra help with visibility, list your property with Grand Welcome and earn revenue with our easy and comprehensive management program.
Want to open your vacation rental management franchise and start your own business at home? Contact Grand Welcome Franchise to find the franchise opportunity and to receive a free Franchise Information Kit. Grand Welcome will help you come closer to your investment goals.