Making the home welcoming and livable to your guests is one thing you need to do to prepare your house for rent. Make sure it is decluttered, refresh the paint and flooring, check that all appliances are in working order, and spray for insects.
Additionally, there are a few behind-the-scenes things you need to do. Verify the mortgage is current, have a healthy book in savings (at least three months worth of expenses), and line up a property management company if you choose to use one. Of course, have a solid lease agreement ready.
How to Invest and Make Money
Since you got into this business to make money, you want to do everything within your power to make that happen.
Losing money is not an option for many property owners, so investing wisely (at the right place and at the right time) and using a good system for setting short-term rental pricing should be at the top of your list of priorities.
Vacation Rental Investment Guide for Beginners
Knowing if a particular rental property is a good or bad investment (and knowing how to invest in rental property in the first place) can be a very involved subject with many nuances that can take effort to master. But just knowing the basics is a good place to start.
A rental investment:
- Provides appreciation over time due to property value increases, the mortgage being paid down, and improvements made.
- Can provide an ongoing cash-flow return when the calculation of estimates (rates, expenses, etc.) is positive.
- Carries risk of loss and no guarantee of return.
How Much Money You Need to Invest in Property
Financing a rental property through a bank is different than financing for a primary home. Depending upon your credit, you have to put at least 20 percent down. So, if you want to purchase a $200,000 property, you’ll need $40,000 in cash up front.
If you don’t have that cash on hand, (carefully) consider taking out a home equity line of credit. Or, another possible option is to use”Seller Financing.” This means the seller of the property acts as the bank/mortgage company, negotiates a smaller down payment, and receives the monthly mortgage payments.
When and Where You Need To Invest in Property
When you need to invest has to do with your personal and financial situation. However, as with any sort of long-term investment, the sooner you start, the better. That’s because property values will always rise in the long term.
As far as where you should invest in property, it is smart to look at tried-and-true places (like Hawaii or Orlando) as well as up-and-coming locations (such as Texas or near The Great Smoky Mountains). Here are a few things to consider:
- Warm weather locations (like Palm Springs) usually do better than colder locations.
- Multiple high seasons (such as Lake Tahoe) mean more bookings.
- Some cities (like Boston) highly tax vacation rentals.
- Urban population centers (like New York City) have very expensive real estate and fierce rivalry.
- Smaller to midsize towns with high occupancy rates (such as Las Vegas) are a good bet.
How to Make Money on a Vacation Rental Property
Knowing how to make money on a vacation rental property is a key bit of information to know before venturing into this business. Making the correct calculations and being a master at marketing (which we will talk about later) are important, but another thing that really makes a huge difference in how much money you’ll make is the way you rent your property.
If you rent out your home sporadically or without a real motive behind it, then you can expect sporadic, marginal returns.
On the other hand, if you treat your vacation rental property as a fully-formed business where your customers’ presence and comfort are prized, then you can do very well for yourself.
How to Establish Short-Term Rental Pricing
Setting smart short-term rental pricing on your property is a task that shouldn’t be taken lightly. Putting in some effort and research will make all the difference in your profit margin.
There are many things to take into account when pricing:
- Your expenses
- Your rental history
- Your property
- Similar properties
- Your reviews
- Your high and low seasons
- Your goals
Market Your Business
There are a lot of reasons to go big when it comes to vacation rental marketing. Here are five of those reasons:
- You will rank higher in search results.
- There will be a significant uptick in bookings.
- It shows your commitment as a professional vacation rental host.
- It instills a feeling of trust and reliability with your potential guests.
- Your viewers will appreciate the information, as it helps them make a decision.
How to Do Vacation Rental Marketing
When thinking about how to market your short-term rental, there are literally dozens of ways. How can you optimize the options so that you don’t waste money, but gain it instead? Listing your home on a vacation rental site is the first, most obvious, and best way to get noticed by guests seeking short-term lodging.
When you list your property, you get a lot more than just a tiny blip on the results page. For example, listing with Grand Welcome gives you full access to:
- A state-of-the-art website
- Full online booking facility
- A mobile-responsive website design
- Personalized email marketing campaigns
- Both Google and Bing organic and paid marketing campaigns
- Social media campaigns
Property Description: For Rent Sample
Property description for rent sample absolutely must include the following four elements:
An engaging, inviting, informative vacation rental description. This should describe the property’s amenities and facilities, information about the location and surrounding area, and the experience guests can expect.
High-end pictures and movies. Give your visitors a great first impression and a great grasp on the space. Aim for more than 20 photos and a couple of videos. This will go a long way in establishing trust on your expertise as well as generating excitement over the vacation itself.
Clear pricing. Use a calendar view to show available dates and nightly prices. Break down any extra fees like cleaning, additional guests, taxes, etc.. If you are offering a deal or promotion, highlight it and make it easy to redeem.
Easy-to-understand policies. Do you require a deposit? What is the refund policy? Are pets allowed? How about parties? You’d better put it all in writing.
Putting Your House on Airbnb or Grand Welcome
Since Airbnb has a huge presence in the vacation rental market, most short-term rental platforms follow the same basic steps as it does for listing homes.
You’ll want to fill in some basic information, such as city, home type, number of bedrooms/bathrooms, and number of guests that will fit in your property. You will then add your property description, upload pictures and videos, fill out the availability calendar, place your policies and pricing, and then publish. That’s it!
As mentioned before, the same general procedure for putting your house on Airbnb will apply for other listing sites, Grand Welcome included.
Vacation Rental Management Software Options
Vacation rental software can support your business management:
- Facility maintenance
- Data and reports
Using vacation rental management software can simplify your experience as a host and increase the satisfaction of your guests. That’s because it integrates with online booking websites and is designed to track daily activities such as promotions, guest traffic, cleaning staff, customer satisfaction, and more.
When comparing vacation rental software pricing, be sure to compare apples to apples. What does each program include and which one will help you realize your specific financial and business goals?