There is a lot of money to be made in the short-term vacation rental market. In fact, according to a research done by Airbnb, an average host can earn $30,000 a year by listing their property in vacation marketplace platforms such as Airbnb, VRBO, Booking.com, or a property manager’s direct booking site like Elevate Properties.
While it has huge potential, it’s important for homeowners to understand what they’re getting themselves into before jumping into the industry. As anyone who has ever rented out their home knows, there are many factors that need to be considered before investing in this type of venture (and many more after).
Not every home is a fit for the vacation rental market, and you need to make sure that yours meets the criteria before you take the leap and try it out. Here are five things you should know before deciding if this route is right for you:
Identify if your home is suitable as a vacation rental property.
Before turning your home into a vacation rental property, consider the following:
Ask yourself. If it was listed as a vacation rental property, would you stay in it? If the answer is no, then chances are that someone else won’t either. Ask yourself why you wouldn’t stay there. Is the room too small? Do you have all the necessary amenities that make guests feel at home? Answers to these questions will help determine if your home has potential as a successful short-term rental property.
Check if there is demand in your area for vacation rentals. If you live in New York City, Florida, or Martha’s Vineyard and have been thinking about taking advantage of this growing trend by converting your home into a vacation rental listing, then chances are good that there will be demand for such properties within driving distance from these destinations. Even more so if you live near restaurants and places of interest that attract tourists from around the world!
Be prepared for the investment needed
A vacation rental property is an investment. And there are typical investments expected in maintaining your home but it’s another when you list it as a vacation rental.
Invest in high quality furniture that can stand wear and tear, home automation technology that lets guests automatically check in or control lights, and home security systems that protect guests and hosts from theft.
Additionally, maintaining a vacation rental property can also require additional investments throughout the year. Fixing any property damages that may arise during guests’ stay (such as spills or broken windows), fixing appliances if it breaks down, cleaning carpets, changing bulbs and other unforeseen costs along the way.
Comply with the legal requirements
Before you start renting out your home, it’s crucial to check the legal requirements that may apply to your city and state where your property is located.
If you live in a community association or condominium complex for example, a homeowners association could have rules about vacation rentals or other short-term rentals. Your city may also have some regulations about such issues as noise levels, parking spaces and garbage disposal that affect guests staying at your property during their stay.
Also, keep in mind that many cities have enacted ordinances requiring potential rental properties to obtain business licenses, which means paying taxes on income generated from short-term rentals. In addition, most cities require businesses offering short term accommodations through web platforms such as Airbnb and VRBO (Vacation Rental By Owner) provide proof of insurance coverage when they register with local municipalities before listing their properties online
Understand the business you’re going into
As a homeowner, you need to make sure you have an understanding of the vacation rental business before jumping in. It’s a market that’s constantly changing. Keep in mind that there are ups and downs in the market, off peak and peak seasons, and guests that may cause issues along the way.
While there are property management companies like Elevate Properties that can help manage and market the listing for you, this doesn’t mean they will be able to cover all aspects of the process. Homeowners have to secure the proper legalities, insurance and documents before they can list it.
Lastly, homeowners should acknowledge that listing their home will affect their ability to use it when they want to. And this may mean booking their property as a guest themselves!
Have a property management partner
Having a reliable property management partner is crucial for making sure your guests have a pleasant and memorable stay, managing daily upkeep – and not to mention helping you address potential property damages.
A good property management partner will guide you through everything from marketing your property to ensuring it will be priced competitively. They can help you set up the necessary licenses, requirements and additional documents before you can list your home.
Technical expertise and local market knowledge of your property management partner can also help you make the most of your vacation rental property. So this is why choosing an experienced property management company like Elevate Properties can help you manage your property on your behalf, unlocking the full value and potential of your home as a vacation rental property!
If you want to know more about how to list your home as a vacation rental property and the potential income it can make, book a call with one of our Elevate advisors!