Thanks to guest author Jackie Waters
Renting out vacation property is an excellent opportunity to earn a steady income throughout the year, and that’s not even including peak season, where your earning potential could double or even triple. From Ideal Wealth Grower, take a look at this to find out more about what it takes to reap passive income through residential real estate investment.
If you decide a vacation rental is a better investment than a long term, traditional single family investment property, you need to be aware that your out-of-pocket initial investment will be higher because you need to fully furnish and equip your vacation rental unit before you can start generating income. If you follow the advice below, you have a great opportunity to make your money back and more when operating your vacation rental.
Owning a property comes with its fair set of legal property laws. Owning a vacation rental is no different.
● Check with your state and city regarding what regulations apply for short-term rentals.
● Check what zoning laws apply as well, as there may already be one too many vacation rentals in the area.
● You may have to apply for a general business license and a short-term permit – again, dependent on your state’s requirements. In some cities your short-term rental unit is also treated like a hotel and you will have to pay bed tax accordingly. Most owners add this to the daily rental price as any hotel would.
How to make your vacation rental more attractive
The vacation rental industry can be a competitive one. Therefore, it’s essential to ensure your vacation rental is as attractive as possible.
● Make sure you have functional and aesthetically pleasing furnishings that will make the property more pleasing to the eye. This can be best accomplished by following a theme. You can have the “Yellow Zebra” house, or the “Hibiscus Fence” house, or the ‘Nurses Paradise” house.
● Exceed your tenant’s expectations. In other words, what special touches can you add to impress them even more? This is also a great opportunity to collaborate with local artisans and artists. You can offer their products and keep a small commission to boost your revenues.
● Create an intriguing listing that will speak to your tenant’s emotions rather than just listing the facts. Unless you are a professional photographer, get one – it will make a huge difference.
● Design business cards to stand out from your competition; it’s this sort of personalized touch that can go a long way in making your vacation rental more memorable.
Running your vacation rental
You can choose to manage your vacation rental yourself or have someone do it for you.
● If you want to manage the property yourself, this can be a time-consuming exercise, requiring you to be very hands-on and detail-oriented.
● On the other hand, a property manager can manage the property for you, including any admin, maintenance, and tenant-related duties. Be careful to only hire a property manager with substantial experience in vacation rental management as it is totally different from long-term rental/apartment property management.
● Vacation rental software provides the best of both worlds, enabling you to be more hands-on while increasing the efficiency of the rental process. The biggest platforms, like Airbnb and VRBO offer some tools and are integrated so you have a software suite.
● Technology can also be very advisable. Get a noise detector that plugs into a wall outlet to allow you or your manager to monitor noise levels though a phone app. If you have a non-smoking rental, get an air quality detector with the same app connectivity. For your entry door, get a system (i.e. Nest) with a camera and code lock to check the number of tenants when they arrive and be able to limit access through a timestamp for the lock. There are many more gadgets that allow you to have control over your rental and possibly provide protection for your guests.
Owning a vacation rental is an exciting and financially rewarding business opportunity. But it is one that requires one to strike while the iron is hot, taking advantage of unique opportunities to stand out as much as possible.