If you’re looking for the ideal first real estate investment, a short-term rental property might be the one for you. Unlike traditional single-family rental homes, short-term rentals like vacation homes offer you the flexibility and control to use and maintain your property however you choose while still being able to book guests and earn income.
To find success with this type of investment, all you have to do is choose the right location, spruce up your new property, set appropriate rates, and keep guests coming through. Here are a few tips and tricks for getting these factors in line and making your investment work for you!
Find the Right Spot
Location is key to any real estate endeavor. For long-term rentals targeted to families and working tenants, you’d have to study up on the crime rate, school system, job market, and shopping resources available in the area surrounding your prospective property before making an investment. For short-term rentals, the criteria are a little different.
Choosing a city is fairly simple. You’ll want to purchase a property in an area that is frequently traveled, either for vacation or business. In these spots, there will be plenty of other rentals available for guests to choose from. You’ll need to research the market to get an idea of how your property would fare against the area’s competition.
You can research stats and projections on the performance of your prospective vacation rental before making a purchase. This way, you can weigh your potential earnings against the performance of other nearby rentals as well as historical trends for that area’s market to get a clearer picture of your investment’s long-term value.
Give the Property Some Love
Further, you’ll need to give the property a bit of a makeover to transition from residential function to rental function. Short-term travelers have slightly different needs than long-term renters, which means that you can make a few renovations to your property to make it more appealing for a wider variety of guests.
For instance, you’ll make more money if you can book larger parties for longer stays. Try to incorporate more sleeping space to make your property more marketable to traveling families with multiple kids. While you may not typically gravitate toward these choices normally, adding a foldout couch or converting a spare room into another bedroom could be really cost-effective changes for a rental.
You can also provide useful features for working travelers, like high-speed internet and dedicated office space. In either case, remember that you’re creating a space for short-term renters and cater to their needs.
Set Competitive Rates & Market Strategically
Finally, when you’re ready to put your rental on the market, you’ll need to be smart about your rates and strategies. One of the benefits of short-term rentals is that you can adjust your nightly rates at your discretion, giving you the option to raise or lower them in response to any changes in your plan or the market.
You can take advantage of this by considering supply and demand. When your local market is booming, you can raise your rates and still get consistent bookings. If your area is experiencing a dry spell during the offseason, lower your rates accordingly to encourage sparse travelers to choose your property for their stay.
To ensure that your rental is booked as often as possible, you can switch up your marketing tactics to suit your fluctuating rates. During times of low demand, you can advertise your property’s openings and discounted rates to bring in guests. Exposure will help new guests find your listing and ensure that you earn a good rental income even during the offseason.
If you keep these tips in mind, you’re sure to find a great property and develop a rental plan that will bring you consistent earnings for years to come!