While renting out your property requires a lot of management, this effort is often worth it if you can make enough income. Here are the most important factors to successfully renting out your vacation home and maximizing the revenue it generates.
Most travelers research and find their vacation rental online. Marketing your property online—and on multiple websites—is key to getting your vacation rental home in front of enough potential guests.
“The biggest mistake I see a typical property owner make is not marketing their property on all of the biggest websites” says T.J. Clark, cofounder and CEO of TurnKey Vacation Rentals. According to HomeAway, its website receives 9.8 million visits a month. Airbnb’s website is reported to have more than 200 million bookings since 2008. Booking.com is the top ranked website for the Accommodation category with 4 billion visits over the last 12 months.
If your property isn’t listed on all of these travel websites, you’re missing out on exposure to millions of potential guests per month—and many potential bookings.
Once your property is listed on a vacation rental website, it’s important to have a high-quality listing to attract as many guests as possible.
Each listing website is a little different, but here are the critical attributes of a successful listing:
The photos should reflect the amenities, location, and qualities of the home. Capture as much of each room as you can. Guests want to know if the space is right for their group. Be as clear as possible. If you think by hiding a flaw you’ll book more travelers, think again. Reviews of disappointed travelers can hurt you more than missing out on a few bookings for being honest.
Write a great headline that is descriptive and specific. Highlight what makes your home unique, while also clearly spelling out what guests want to know. Write enough that you cover all your bases but not so much that guests are deterred from reading it.
Sell your particular location in the vacation destination. Are you near a hip entertainment district? Be sure to include what makes your home and neighborhood stand out.
Make sure your home is priced competitively for comparable homes in your area. Don’t forget to also look at hotel prices to make sure your home is not priced too high to compete with them. When your home is booked more year-round, you earn more revenue. Our homeowners usually see a 35% increase in revenue when they use our dynamic pricing strategy.
88% of consumers trust online reviews as much as a personal recommendation. Many major booking sites are using verified review methodology to ensure that reviews were submitted by verified guests booked through their platform. Since search results on Airbnb and HomeAway are affected by number of positive reviews, you need to have a review acquisition strategy in place.
If you have these important bases covered, more potential guests will look at your rental listing than the listing of a comparable home with poor quality photos, out-of-sync pricing, vague descriptions, and no reviews.
If you have a great listing that is on all of the major vacation rental websites, you’ll receive many inquiries and questions about your property. In order to convert these inquiries into stays, you or your vacation rental management company need to be prepared to respond quickly and appropriately answer questions or concerns.
“We’ve seen a direct correlation between fast, personalized inquiry response and higher booking conversion rates,” says John Banczak, Executive Chairman and cofounder of TurnKey Vacation Rentals.
Since 84% of guests receive an inquiry response the same day, according to Phocuswright’s 2015 study, you need to be ahead of the curve.
As of July 2017, HomeAway will auto hide listings that do not respond to inquiries within 24 hours from search results. If your listing is not showing up in search results, you cannot maximize your bookings.
Fast, quality responses are one of the biggest reasons homeowners look to property managers.
Most owners simply can’t keep up with the 24/7 nature of responding to inquiries and recognize they’re leaving money on the table. “My wife and I both had full-time jobs and busy lives. I got tired of being at dinner with my family when guests would call me because they ran out of toilet paper,” says James McKee, who managed his own home before hiring TurnKey Vacation Rentals to manage it for him.
One of the first things potential guests look at before they consider a property is its availability during the time they want to travel. Having an accurate and up-to-date availability calendar helps attract more guests and bookings.
Potential guests often are frustrated by the following two availability calendar issues:
First, the availability calendar isn’t updated and the owner requires potential guests to email or call to check availability. For major booking engines like Airbnb and Homeaway, host phone numbers are not permitted on listings. Many guests will simply skip these kinds of rentals, costing the owner bookings.
Other times, the property appears to be available, but it isn’t. Guests get very frustrated when they receive an email from the owner letting them know that it actually isn’t available, even though their calendar indicated it was. Booking engines like HomeAway penalize declines when a date is open by lowering the property in search results, which can impact your booking rate.
Once a guest decides he or she wants to rent your home, owners and management companies should make it as easy as possible. Enable your property to be instantly bookable online and accept credit card payments.
“Travelers have been conditioned by the online travel agencies to book instantly online and want instant gratification,” says T.J. Clark. “Guests want the same thing when booking a vacation rental.”
Making it easy to book the property with a credit card is important as well because guests prefer the convenience and security of using a credit card rather than mailing a check.
Soon, hosts will not have a choice. Airbnb and Homeaway are strongly encouraging hosts to offer Instant Book or Book It Now properties. Since being able to instantly book a property enhances the guest experience greatly, major booking engines are likely to make it mandatory. A subset of new hosts to Airbnb are required to enable Instant Booking, further indicating this is the direction they are moving in. The total vacation rental marketplace has also seen a doubling of instantly bookable properties over the course of the last year.
Homes managed by owners and property management companies that do these five key things well will generate more income than homes that don’t. While it takes additional time and effort, the increase in revenue can be material.
If you’re currently managing your home and don’t have the time or expertise to try these tactics, consider a property management company. The increased revenue and time saved should more than offset the management costs.
If you’re already working with a management company, make sure they’re doing these five things well for your property. Otherwise, you may be leaving money on the table.