8 Steps for Successfully Investing in Vacation Rentals

There’s just something about summer. No matter where you are or what you do, summer brings out the excitement that’s just a step or two below the thrill of the holiday season. Memories of summer vacation, swimming pools, ice cream trucks and care-free days always stick with us, even into adulthood.  No matter how old I get, I still love packing the car and heading to the beach.

Several years ago, I headed out on a two-day trek from Memphis to Cape Cod to spend time on a beach I had never visited.  That had to be the most grueling two days I have spent in a long time, but it was so worth it as we pulled up to a summer cottage on the water.  Yes, even with five kids in tow, and regardless of the distance, I always smile at the end of that drive to the beach.

Summer also brings out unique opportunities for real estate investors. While many of us involve ourselves in single-family rentals or apartments, there are ways to branch out that, for whatever reason, we don’t always take advantage of.  I am in the middle of putting together a vacation rental as we speak, and my family is now operating two others.

Investing in vacation rentals is certainly a different beast. It’s not like a regular investment—stays are shorts, seasons matter, and marketing is king.  The ‘wow’ factor starts the second someone inquires about your property and lasts through the time they check out.  Your task is to figure out how to wow them from the start and keep them in awe so they tell everyone else how great the experience is at your property.

If you’re considering investing in vacation homes, there are a few keys to remember.

Summer Lovin’: What You Should Know About Vacation Rentals

1. Your marketing matters.

Marketing is always important in real estate, but it’s especially true for vacation properties. Highlight your assets. Craft a stellar description, but make sure it is accurate. Invest in high-quality, professional photography that highlights your property’s uniqueness.

More important than setting up a good listing, however, is ensuring that it’s effective. Look at the data, and track analytics. Are people finding your listing? How much attention are they giving it? Like any other listing, you’ll need to keep it updated and in line with what people seek.

Lastly, don’t shy away from telling people how they are going to be treated by you. Believe me, there are plenty of places to stay where the owner does not care about the renter’s experience. Highlight that you are not one of them!

2. Only the best customer service will do.

Customer service for a vacation rental isn’t just about having top-notch property maintenance and responsiveness to your customers. It’s also about answering any inquiries that come your way and responding even when your property is booked. When people receive a response, they’ll be more likely to try again at another point. Let them know what is available (if anything) and encourage them to check back another time.

Wow them when they walk through the door by leaving a unique gift for each booking. Something local for them to remember you by and possibly even a few personal touches like recommendations for fun things to do close by with kids. Every little touch you can give counts and only heightens their experience in your property.

3. You’re selling an experience.

For residential rentals, you’re not selling a dream. You’re selling a home. Your tenants don’t need it to be ideal. On vacation? It needs to be ideal.

That means painting a picture in your listings that entices readers and delivers the well-maintained property in which people want to spend their vacation. It’s not a necessity—it’s for pleasure. Because of that, you have to approach your strategy with an entirely different mindset.

It absolutely matters that your property is spotless when a new renter arrives.  It matters that a gift is waiting for them to make them happy. It matters that they know you are looking out for their best interest and want them to have a comfortable and fun time at your property. This is what earns you high marks on the reviews and not only repeat customers but high praise from those customers to their family and friends (referrals are important)!

4. Be competitive in your market.

Your renters have absolutely looked at other vacation properties in the area. Make sure you know your market and are offering a competitive price. You may be tempted to up the cost because of seasonal use and a higher yearly vacancy rate. Don’t. Focus on being competitive and delivering value to your customers.

Price is very important, but so is occupancy and word of mouth. When someone feels that they received a high level of service and value for the price they paid, you can bet others will hear about it. Staying booked definitely helps cure the competitive pricing.

5. A professional image lends confidence.

Being professional is always important. As we’ve discussed before, many vacation rental scams are out there. Avoid suspicion by being responsive, providing formal contracts, and using a professional booking system. The more thorough, organized, and communicative you are, the more renters trust you. The more detailed your listing and the better your pictures are, the more professional your image will appear.

Remember, all of these small details matter.

6. Quality comes first.

On the note of selling an experience, value upkeep. There’s nothing sadder than a run-down vacation home. Ensure that the place is thoroughly cleaned between each renter and diligently find and address any maintenance issues. People are far, far less forgiving of a vacation rental than they are of other properties.

7. Establish relationships with local service providers

To enhance the overall experience for your vacation rental guests, it’s beneficial to establish relationships with local service providers. Collaborating with nearby businesses and professionals can offer additional perks and convenience to your guests. Consider partnering with local tour guides, car rental agencies, restaurants, or spas to provide special discounts or packages exclusively for your renters.

By recommending trusted local services, you can help guests maximize their vacation and create a personalized touch that sets your property apart from others. These partnerships can also lead to referrals and repeat bookings, further boosting the success of your vacation rental business.

8. Leverage online platforms and technology

In today’s digital age, leveraging online platforms and technology is crucial for the success of your vacation rental business. Utilize reputable vacation rental listing websites and online travel agencies to reach a broader audience and increase your property’s visibility.

Additionally, consider implementing a secure online booking system that allows guests to easily make reservations and payments. Technology can also enhance the guest experience by providing amenities like keyless entry systems, smart home devices, and entertainment options like streaming services or gaming consoles. By embracing technology, you can streamline your operations, attract tech-savvy guests, and stay competitive in the vacation rental market.

What do you think is most important about owning a vacation rental property? Share your opinion in the comments.