When purchasing a vacation rental home, there’s a sweet spot between making the home a great business investment and making the home a place to make memories – it is absolutely possible to do both.
To be able to successfully use the home for personal and business endeavors, plan ahead for success with these 6 tips:
Do block your calendar in advance. It’s your rental, and you can, of course, use it however you see fit. But you’re going to start generating some negative reviews if you cancel guests last minute because you forget to block off the weekend you’re hosting your grandma’s 90th birthday at your mountain home. Sit down every few months, and evaluate your calendar so guests can see the most accurate availability for your home.
Don’t use the home every peak weekend. If your goal is to generate revenue from your vacation rental, using your rental every peak weekend won’t be the best decision – you can’t wonder why you’re not making money when your home isn’t available. For example, it’s reasonable to use your beach house one weekend each month during the summer but if you plan to block off every summer weekend, you’ll find it hard to generate a lot of revenue.
Do use dynamic pricing. It’s not just airlines that use customer-based pricing – vacation rental homeowners use it too. Customer demand creates an opportunity for you to make a little bit more money. For example – if you own a beach home, you can increase the nightly rate you charge for summer weekends but you’ll want to lower the price on a weekday during the winter. Set different nightly rates for weekdays, weekends, and peak season.
Don’t price higher than market rate. Always look at other homes in your area on sites like Homeaway, VRBO, and Airbnb and see what their nightly rates look like. You’ll want to price your home similarly to other homes in your area. You can always charge a little bit extra for amenities other homes may not have, like a hot tub or wrap-around porch. But if you overprice your home too much, you’ll find it harder to get bookings.
Do your research. Whether you have a rental in a popular travel destination or an up and coming one, know what the norm is for your area and keep a finger on the pulse of the city. What are other homes offering amenity-wise? What decorations are most appealing in a rental? What events are happening that can affect pricing? Keeping an eye on the market and on your city can help you get the most out of your rental.
Don’t have aggressive stay minimums. It’s tempting to put a night stay minimum on your home to get the most out of every booking, but tread lightly. Some guests may jump for joy at the thought of booking your home for a long weekend but will click away from your listing once they see you have a 7-day stay minimum. If you have a high night minimum and you’re not seeing the bookings you want, try dropping the minimum and see what happens.
Deciding on how to price your home and when to make it available plays a huge role in how much revenue your property will generate. Understanding how these two factors work together will help make your rental very successful.