4 Tips to Turn Your Home Into a Profitable Vacation Rental
The short-term accommodation industry is booming. According to a Phocuswright study , one in three travelers opted for a vacation rental last year versus just one in 10 in 2010. That means it’s a great time to put your second home to work.
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Any good property manager will tell you that there’s more to turning your home into a profitable vacation rental than simply adding a few photos to an online listing. In addition to obtaining the necessary permits and upgrading the furniture, you’ll need to think about removing or securing your personal belongings, creating a compelling description, and getting the optimal number of reviews before peak season begins.
Investing a little time, effort, and money in your vacation rental early on can make a huge difference in your profits and create a more pleasant experience for you and your guests. If you follow this checklist, you’ll be well on your way to owning a successful and profitable vacation rental.
4 Tips to Turn Your Home Into a Profitable Vacation Rental
1. Acquire the necessary permits.
Before you can start renting out your vacation home, you have to obtain the correct licenses and permits for your state, county, and city. The timeline for this varies by municipality; in Panama City Beach, the permitting process takes one week, while Woodstock, Vt., takes up to six weeks.
Although it’s possible to handle permits yourself, this is one area where having a vacation rental manager can make things easier. Vacation rental property managers are familiar with the local permitting process and can help you deal with associated taxes, overcome unexpected roadblocks, schedule inspections, and assist with any required documentation.
It’s in the property manager’s best interest to avoid disruptions in business, so you know they’ll be thorough when it comes to making sure your home is properly licensed.
2. Prepare the home for guests.
Although most of your guests will be courteous, careful, and conscientious, accidents are unavoidable. Remove anything from the home that is one-of-a-kind or has sentimental value and can’t be replaced. If you plan to use your vacation home frequently and want to leave some items behind, consider storing them in a locked closet or another secure area so you can access them when needed.
That being said, if you do need to replace or upgrade some furniture, don’t fill your home with ratty thrift store couches or salvaged secondhand tables. Newer furniture and appliances are generally easier to keep clean, are more appealing to guests, and sometimes come with lifetime warranties—in other words, they quickly pay for themselves. If you don’t want to buy brand new, see what you can find at higher-end consignment stores.
Make sure you have two full sets of linens for each bed (preferably in solid colors, which photograph better) so you always have a clean set ready to go in the linen closet; that goes for towels, as well. And don’t forget the kitchen and dining room—you should have enough seating to accommodate your maximum occupancy, at least the same number of place settings, and enough pots, pans, and cooking utensils to cook a full meal.
3. Gather photos and write a compelling description.
If you’re planning to self-manage your vacation rental or if you’re working with a property management company that isn’t full-service, consider hiring a professional photographer to take photos. Photos are the first thing someone looks at when browsing vacation homes, and if the photos aren’t high quality, potential guests won’t bother sticking around to see the rates or read the description. Your house might be beautiful in person, but if the only photos you have were taken on a smartphone in poor lighting, your bottom line will suffer.
Make sure the home is tidy and maintained prior to photographing it. If you can’t take the time to replace a burned out lightbulb, guests will wonder what else you’ve left unfixed.
The description is your chance to highlight amenities that aren’t obvious in the photos. Think of it as a conversation between you and the potential guest. You want to tell them what makes your home awesome and unique without overselling or rambling. You might love your custom-built mahogany cabinets, but guests are more interested in whether or not they can walk to the beach.
Proximity to local landmarks, neighborhood walkability, and pet-friendliness all win big points with potential guests. Try to paint a picture, but keep your language simple and have someone else check your work for spelling mistakes or typos.
4. Allow time for reviews.
A few positive reviews can do wonders for a vacation home’s reservation rate. An attractive listing is important, but reviews provide potential guests with a firsthand account of what staying in the home is really like. If someone is planning a special getaway, they want assurance that everything will be perfect and as advertised, with zero chance of unpleasant surprises. Reviews add trust and validation.
If you want to be ready in time for peak vacation season, plan to have your listing live and home rented with enough time to get five to 10 reviews beforehand. Roughly 40 percent of guests write reviews, so you’ll want to plan for at least 12 reservations prior to the start of the season.
Big-name vacation destinations such as Ocean City, Md., and Destin, Fla., have longer booking windows than Fredericksburg, Texas, and Big Bear, Calif. In Ocean City, reservations are made on average 121 days in advance, while in Fredericksburg , they’re made just 23 days in advance. Include the lead time in your calculations by counting backwards from when your home’s “peak season” begins. If it’s a popular summer destination with a 90-day booking window, you’ll want to have at least five reviews by the beginning of March.
Although it’s certainly possible to manage your own vacation rental, enlisting the help of a property management company is one of the easiest ways to get the most out of your home. The time it takes to on-board a home depends largely on where the home is located. A full-service property manager can help you figure out the best time to get your home on the market, in addition to assisting with your other logistics and marketing.
Even if you aren’t planning to rent your home immediately, it doesn’t hurt to ask a vacation rental property management company for some insight—or even an estimate of how your home might perform. Either way, the sooner you get started, the sooner you’ll find yourself with a profitable, hassle-free vacation rental.
Anything you’d add to this list? Which of these tips do you find most helpful?
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