Everyone loves to vacation. When work weeks appear to routinely bleed into the weekends, and emails ping from morning these rare instances of free time are moments to unwind, recharge and have fun.
But in the last several years, millions of people are increasingly embracing vacation time as a business opportunity.
As Airbnb has grown from a small San Francisco startup into a global hospitality brand, sparking other short-term rental companies to emerge, the chance for one group to take some time off has become a way for another group to make money.
There are stories of rental owners making millions per year, and other instances of rural areas becoming travel destinations. Vacation homes that may have previously sat empty for months are now being seen as a way to increase retirement savings, pay off debt or save for college. The average Airbnb host makes about $920 a month.
This shift in how we view vacation stems from the Great Recession and is enabled by new technology. According to a study by vacation rental website HomeAway and real estate firm Savills, it’s also fueled by people prioritizing monetary returns on their investment properties.
So if you’ve been thinking about buying and operating your own vacation rental property, there are some important things to learn in order to be successful.
QUALITIES OF A HIGHLY-PROFITABLE VACATION RENTAL
As with your primary residence, the classic real estate trope of”location, location, location” is mostly true about vacation rentals, also.
According to the HomeAway and Savills report, California and Florida dominate the vacation rental market because of attractions like beaches and theme parks.
Choosing a property within a desirable town — that are the hubs of most vacation rentals — is easy enough to remember, but it’s also important to pick on one in a safe neighborhood.
If you’re thinking about building a property for a vacation rental, think twice. Costly new building is much more time-consuming than renovation and can delay profit. Rather, think about purchasing fixer-uppers on large lots.
When you feel you’ve found a desirable location for your property, check the city’s ordinances about vacation rentals. Some prohibit short-term rentals, where others have a required minimum stay or additional taxes, so familiarize yourself with the logistics of having a rental in that area before making a down payment.
MAKING THE PROPERTY MARKETABLE WITH DESIGN
As soon as you’ve selected a vacation rental property, you may have to do some renovations or design upgrades. The first step is to research and procure a trustworthy vendor to do the construction, and to work with the city to secure the necessary licenses.
Clean, modern aesthetics are usually popular across renters. And photos will often be the determining factor in whether or not your rental gets booked.
Discover the positive attributes in the home and enhance those with a classic, fun design,” she said. In addition, try and create a realistic budget and prioritize what has to be done — make paint your friend.
Bring a clear vision to your vendor before construction starts, and be prepared to roll with the punches as designs and timelines often change.
If you have decided to run this vacation property yourself, consider hiring a professional to write your ad and a photographer to take exterior and interior images.
A vacation property makes you a business owner, so you’ll have to play the part. Being smart about even the small details will go a long way toward earning your vacation rental 5-star reviews, which helps you increase your occupancy and nightly rates.