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Owning a vacation home is just like owning a business. The goal is to keep cost down and profits up. Over the last few weeks, we have written about ways to reduce the monthly costs in your vacation home. If you missed that article, here is a link to it.
So this week I thought we would go over ways to increase or maximize your profits.
5 Ways to Maximize Your Rental Property Profits
1. Do Your Own Bookings
I know many vacation homeowners have other jobs, and it is not conducive or cost effective for them to do their own bookings. However, if you do have some extra time, you can make quite a bit more money if you do the bookings yourself.
For example, if your rental property gross income was $35,000 for a year, a typical property management company will charge you around 30% or $10,500 to manage your bookings for you.
- Upgrade your subscription on the places where you are advertising. It has been stated that on VRBO (to learn more about how to rent your place and list for free on VRBO, click here), if you upgrade to the deluxe package (only $100 more per year), you will get as much as 7 times the exposure.
- Write a catchy title and a professional description. Just stating the facts is boring, and it has been proven time after time that professionally written copy will net you more bookings.
- Take great pictures. Here is a link to a previous article which talks about this in detail.
2. Work Hard to Get Repeat Clients
Many guests prefer to go to the same vacation spot every year at the exact same time. Once a guest has stayed in your unit, you really should be e-mailing or calling them to see how they liked your home and to see if they want to rent again next year.
Here at my company, our repeat clientele is 25% for vacation homes so this can be extremely profitable.
3. Have Your Unit Professionally Decorated
This is key. Guests want to stay in a place with a resort-type of feel to it. If you have a vacation home near the beach, then the décor should have a more tropical vibe. If you have a vacation home in Orlando, then it is a good idea to have a bedroom or two with a theme park or Disney theme to it.
You will also not want to overlook the importance of the kitchen. When people are buying homes, it is said that the kitchen and bathroom updates are key; in vacation homes having an updated kitchen with top-grade appliances is key to attracting the most guests.
4. Offer Amenities that Guests Want
It is 2014, and every home should have flat screen TVs, wireless internet and cable TV — at the bare minimum. We live in a society that likes to be connected to social media, and wireless internet is a mainstay in most people’s lives. When guests are deciding which vacation home to choose, the older box TVs will make your house look dated, and it will be a major turnoff to most potential guests.
5. Keep Your Calendar Updated With Current Rates and Availability
This is a great opportunity for you to make some extra money off your bookings even if the guest does not stay in your property. Get to know your neighbors or vacation homeowners who have properties close to yours.
If a guest calls you about your property and your property is full, instead of simply turning the booking away, try and see if your neighbor’s house is available. If it is, set up an arrangement for your neighbor to pay you a commission for the booking. Also, maximize your revenue by doing a little revenue management.
If the demand is extremely high during curtain periods and you are confident that you are going to rent your property during this time, don’t be afraid to ask a little more. Remember, last minute planners are used to paying a little more. On the flip side, if you have dead periods, don’t be afraid to really sharpen your pencil and get aggressive on the rates or offer a huge incentive to get guest in your house.
What do you do to ensure your vacation properties stay booked and bringing in revenue?
Leave a comment below!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.