Owning a short-term rental can be a lucrative side hustle. How lucrative? One homeowner earned more than $130,000 per year renting out his vacation rental home through TurnKey.
But, to be frank, making that type of money takes a lot of work. Over time, you may find your side hustle takes as much effort as a full-time job.
It doesn’t have to be this way. We asked short-term rental owners and property managers around the country for their best time-saving tips. From setting rates to staying on top of local regulations, here’s their advice for making your vacation rental business as lucrative — and easy — as possible.
Know Your Target Market
Many of the property managers we spoke to said the key to short-term rental success is to identify your target market and position your home to meet their needs. It will make every aspect of your job, from writing a description for your listing to knowing how to decorate your home, easier.
“To me, identifying my target market and marketing the home fit hand-in-glove,” said Jim Prugh, owner of Lindsborg Vacation Rentals.
Start by researching what brings people to your area. The local Chamber of Commerce is a good place to start. Bigger cities might also have a visitor’s bureau or a destination marketing organization.
In Prugh’s case, he found that most visitors to his region were middle-class travelers in town for weddings, college reunions, and other large gatherings. To appeal to these travelers, he offers rentals that can accommodate multiple guests. All of the homes include kitchens for making group meals, and on-site laundry. In his marketing, Prugh positions a stay at his home as a chance to live like a local. He includes suggestions of nearby moderately priced restaurants as well as a roundup of local activities.
Providing a stellar guest experience will help set your home apart from the competition. This means delivering on all of the promised you make in your marketing, as well as being quick to answer questions and address any issues that come up along the way.
You may also consider greeting your guests in person, or at least sending a warm welcome.
“We always try to reach out to guests soon after they check in to see if there’s anything they need, any issues, anything at all that would make them more comfortable,” said Eric Thomas, owner of Artemisia Cabin.
He also recommends checking in with guests after their stay to see where you can improve.
“Go fishing for feedback,” he said. “When it comes to guest satisfaction and great reviews, make the extra effort to find out what would make your guests more comfortable, and then try to make it happen during their stay.”
Make It Easy for Guests to Find You
Now that you know your target market, it’s time to start, well, targeting them.
Scott Dobos is the director of rental operations for Legacy Properties Sotheby’s International Realty, which runs more than 50 luxury rentals across Maine.
The vacation rental company built a website that is optimized for the target keywords their customers might use when searching for a short-term rental. But all the homes are also listed on popular home-sharing sites, including Airbnb and VRBO.
“The reality is that travelers around the world all use a wide array of websites to find their next home to rent on vacation,” he said. “We use a broad stroke when it comes to marketing.”
While it might be tempting to avoid these sites so you don’t have to pay their fees, you’re only making your job as a vacation rental home owner harder.
“Utilizing Airbnb, VRBO, HomeAway, Booking.com, and many others will allow you to tap into a pre-built marketplace with millions of users,” said Matthew Lerner, founder and co-CEO of makomi.com. “The exposure and web traffic will more than justify the listing fees.”
Turnkey’s property management team will create and optimize listings for your home across 50+ popular vacation rental sites. Learn more about how you can improve your vacation rental home’s ranking on sites like Airbnb and VRBO.
Set Rates With Confidence
Establishing your nightly rates can be a time-consuming and nerve-wracking experience. You don’t want to set them too high and alienate potential renters. But you also want to make sure you’re covering all your costs. Here are our experts’ tips for making the process easier.
First, start by finding 6 similar listings in your area, advised Donna Evans-Deyermond, author of the book Host for the Most. Check a variety of short-term rental sites to find the range people are willing to pay for a home with similar amenities.
“Until you get some reviews, you should probably start at the low end of the range,” she said. “Once you have a few 5-star reviews, you can probably raise your rates.”
When determining your nightly rates, don’t forget expenses like housekeeping, electricity, and fees.
“Know your break-even price,” said Veronica Hanson, owner of Vacay Visionary. “Every short-term rental has a minimum cost to operate. If your cleaning cost is $300 per turnover, you can never offer a stay for less than that.”
When researching other rentals in your area, pay attention to how the prices change throughout the year, said Evans-Deyermond. You’ll likely see there are high seasons, when nightly rates increase, as well as times of year when rates drop. Prices may also vary based on the day of the week.
Embracing dynamic pricing is key to bringing in more profits, our experts said.
“You can’t set your rental rates and then assume that they will be good for years and years. A smart owner is one who stays in touch with the market and adjusts his or her rates as needed,” said Steve Schwab, founder and CEO of Casago.com.
While there are plenty of pricing tools on the market that offer to help you set your base price and make adjustments as needed, Lerner suggests not becoming overly reliant on them.
“There is still a need for manual oversight,” he said. “Automated tools can help you maintain a certain baseline and keep pace with the dynamic nature of the market. But sometimes you’ll want to adjust pricing on the fly because you’d rather have someone in the house than not, even if they’re paying a lower nightly rate.”
Combine Calendars and Keep a Master Schedule
Another process that might require some manual oversight is maintaining your booking calendar.
Most sites allow you to integrate your calendars so when your listing is booked on one platform, it automatically marks it as booked on the others. Our experts advise you turn on this functionality to make your job as a vacation rental homeowner easier.
But Evans-Deyermond suggests double-checking your home’s calendar on all sites, especially during high season. You don’t want to risk double-booking the home or missing out on income because of a technical glitch.
She also maintains a master calendar of her own. She said having all her bookings in one place makes it easier to coordinate her schedule with housekeepers and any repair personnel. Which brings us to our next point.
Build a Trusted Team of Housekeepers and Repair Staff
Whether your vacation rental is on the other side of town or the other side of the country, you’ll need to build a team of reliable cleaners and maintenance staff. Having people you can call to spruce up the house in between guests and tackle any repairs that come up along the way makes your job a million times easier. It also reduces downtime in between renters, which means more money in your pockets.
“Finding people you can rely on takes time, patience, and a lot of trial-and-error, but once you find people that you know will show up on time and do a terrific job, you are already miles ahead of the competition,” said Lerner.
For best results, do a quality check after the cleaner’s first few visits. Afterward, hop on the phone and give them specific feedback on what they did right and where they can improve, Lerner advised. If they do a particularly great job, give them a small cash bonus.
Turnover with contractors and cleaners is high, he said. Bonuses will keep your team motivated to continue doing a great job.
It’s also smart to have a backup plan in case your regular cleaner gets sick or experiences an emergency that prevents them from coming to the home.
“You have to have a plan B,” said Evans-Deyermond. “If you live close by, it’s likely the substitute will be none other than you.”
The DIY method works just fine for Riley Adams, who manages a short-term rental with his wife in part of their multi-unit New Orleans home. He said it doesn’t make financial sense for them to hire a cleaning service. If you find yourself in a similar position, Adams recommends giving yourself a day in between bookings to prepare the home for the next guest.
Technology can make your job a lot easier, our experts said.
Tools like motion-activated lights can help your guests feel more confident moving around the property at night. They can also add an extra layer of security in between bookings.
Smart smoke and carbon monoxide detectors give everyone greater peace of mind. And noise detectors can help make sure rowdy guests don’t alienate your neighbors.
Exterior cameras can also help you ensure renters aren’t bringing in extra guests or disobeying the rules for parking and trash disposal. But you should never, ever install cameras inside the home. Not only will it make your guests feel uncomfortable to know their every move might be monitored, installing cameras and surveillance devices inside your rental home is illegal.
“Cameras are for the protection of your renters and your home, not a means for you to spy on your guests,” said Hanson.
Know the Rules and Regulations
Many local markets have extensive regulation regarding short-term rentals. It’s crucial you’re up to date on all of the rules affecting your business. You also want to check with your homeowner’s insurance and, if relevant, your homeowner’s association or community’s rules regarding short-term rentals.
But it’s not enough to simply know your rights as a homeowner. To make your job easier and more lucrative, you also have to fight for them, our experts said. This can be accomplished by attending city council meetings and speaking out against unfair regulations.
“Be an advocate for short-term rentals anytime you get a chance,” said Hanson.
Find out which cities have the best short-term rental laws.
Setting Yourself Up for Success
By following the expert tips above, you’re well on your way to making your short-term rental business a well-oiled machine that helps you bring in extra cash without taking a lot of time.
But if marketing the home, managing multiple calendars, and building a team of reliable cleaners and maintenance staff feels a bit overwhelming, why not let someone else do all the work?
Here are 6 reasons property managers are worth the investment.
TurnKey’s team of professional property managers help you earn more money — in less time — by handling every aspect of your vacation rental business.
Interested in partnering with us? Connect with us here.