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Vacation rentals represent a burgeoning opportunity for real estate investors looking not only to capitalize on one of the fastest growing travel segments in the world, but also to enjoy their real estate investment quite literally (cue the Corona commercial beach scene).
But unlike more orthodox segments, the well being of a vacation rental investment surprisingly depends on a keen marketing sense. Seeing as though an investor’s ROI is tied directly to his or her yearly occupancy rate, vacation rental owner traits tend to more resemble those of small businessmen than they do hands off financiers.
Sure, as I’ve shared in previous posts, the commitment is more hands-on, but according to the massive influx of baby boomers now entering the vacation rental game, so too can be the great financial returns.
Before getting involved in a vacation rental investment, it can be helpful to know different marketing avenues that most directly impact occupancy rates:
1) Listing Sites
An elite group of online directories tend to rule the vacation rental cyberspace. When travelers seek out rentals, they are drawn to sites like VRBO (to learn more about how to rent your place and list for free on VRBO, click here), HomeAway (click here to list your place for free on HomeAway—only pay when you get a booking), and FlipKey.com and accordingly, these three behemoths are part of pretty much every property owner’s marketing repertoire. Annual memberships to these sites can range from several hundred dollars to several thousand per year, but thanks to the amount of bookings they generate, owners and managers always seem to come back for more.
2) Personal Websites
As with any green industry, personal websites representing one property (or a small fleet of properties) are becoming the name of the game in today’s vacation rental scene. Any owner who takes their property marketing seriously has started to develop their own online presence apart from the obligatory listing sites. Personal websites (easily done on the cheap) help convey an owner’s personality and insight in what’s proving to be a very identity-driven industry.
Perhaps the vacation rental owner/manager’s best marketing weapon is their insider knowledge, which acts to draw travelers away from generic hotel stays and into a more local and authentic experience. Successful vacation rental proprietors tend to be those who share their knowledge about their neighborhood in constructive and generous ways: whether it’s blogging on their own or submitting guest blog posts to popular travel sites, their wealth of information (and how effectively they share it) is often directly proportional to calendar activity.
4) Word Of Mouth
One of the oldest marketing dynamics in the real estate game takes on a new twist when it comes to vacation rentals. Because their economic livelihood depends on booking rooms, owners and managers of vacation rentals are – more and more – becoming mini-hoteliers in spreading their advertising gospel throughout the community. By connecting with other proprietors (tour operators, restaurant hosts, tourism officials), successful vacation rental owners leverage personal connections in their local environments and drum up great street cred.
Vacation rentals are getting lots of press these days as the ever-growing market starts to encroach on traditional hotel travelers. Investing in a vacation rental brings with it a sense of entrepreneurship and engagement that about as new to many newcomers as it is rewarding.
Photo: kevin dooley
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.