If you’ve been in the vacation rental market for more than a couple of years, things have changed, drastically. With the breakneck pace of innovation, vacation rentals have become a mainstream lodging option showing no signs of slowing down. The global short-term rental market is currently worth an astounding $100 billion and is projected to hit $170 billion by the end of 2019.
Homeowners are increasingly seeing the benefits of vacation rentals and making money in the industry, and there are more than 660,000 U.S. vacation home listings on Airbnb alone. Guests are continuing to move away from hotels and into vacation rentals, with one Goldman Sachs study showing that people who stayed in a vacation rental in the five years ending in 2016 are now half as likely to prefer a traditional hotel in the future.
This unbelievable growth is a double-edged sword. More vacation rentals means more competition, and if you can’t keep up with the amenities, offerings, and experiences guests are looking for, you can expect your piece of the pie to crumble.
So, what’s the best way to increase your marketability? Here’s a list of ways you can earn more from your vacation rental in 2019.
- PHOTOS ARE EVERYTHING. In today’s market, your photos are the number one marketing tool for showing prospective guests why they should choose your unit. Make sure they are updated regularly. Focusing on good photos helps with listing quality and lets you take advantage of the algorithms the OTA’s (like VRBO and RedAwning) use, which boosts rankings. People want to see how your property is decorated, they want to make sure they have their own private bathroom and that there is enough table seating for their entire family. Photos are by far the most important key to renting your property.
- INVEST IN AN UPDATE. TripAdvisor’s survey found 83 percent of respondents said the ability to cook in their vacation rental was their biggest cost-savings. Also, in last year’s Remodeling Magazine Cost vs. Value Report, even a minor kitchen upgrade was found to provide an 80.2 percent ROI when it came time to sell the home. So, updating your property increases the appeal of your property through a refined design and aesthetic, and contributes to the long-term value of your property. It’s easy to see why upgrading should be the first action item on your list.
- DON’T SHRUG OFF INTERIOR DESIGN. When staging your property for guests, consider what they’ll see in the photos. A window may have an amazing view, but if there are no accents around it, it could fall flat. Take that same window and imagine an elegant chaise lounge in front of it, a bold bookcase in the corner, and a unique lamp on a side table. You’ve created a cozy area where they can envision themselves cuddling up and relaxing with a good book. With a few simple additions, this room’s appeal and comfort rose dramatically. Interior design requires finding a balance. Guests don’t want a stale, empty rundown room, and too many personal effects can also be off-putting. Local area attractions, local art, and updated traditional decor are all safe bets. Working with a company like Ocean Posh, a North Myrtle Beach company who specializes in inspiring revenue growth in rental properties through re-design, is a proven method of giving your property an edge over your competition.
- INVEST IN LUXURY ITEMS. Guests want to have a memorable experience. Finding unique ways to help your guests have an unforgettable vacation means your rental property, too, should be unforgettable. A great experience leads to repeat bookings, predictable income, and great guest reviews. One study conducted by HomeAway and the University of Texas found that travelers are 73 percent more likely to remember their trip if they feel happy and excited about it before it ever starts. Spending the money upfront on luxury items can have manifold effects.
Here are a few luxury items to consider in your vacation rental property:
- Nespresso or Keurig coffee machines
- Ninja or VitaMix blenders
- High quality kitchen inventory
- Tempurpedic mattresses
- Stainless steel range stoves, refrigerators, dishwashers, and microwaves
- Granite, marble, or quartz counters in the kitchen and bathroom
- Updated luxury master bathrooms with tiled showers
- PUT A FINANCIAL PLAN TOGETHER AND IDENTIFY GOALS. Take a step back to make sure you understand your ultimate goal in renting your property. What you decide will affect all revenue-based decisions when it comes to renting.
- Using a second home purely as an investment property? If so, we’ve found that investing in making your property fit into a luxury designation can give you as much as 15% higher earnings than standard properties. When these strategies are applied correctly, your ROI can be achieved quickly.
- Looking to cover your second home’s cost of ownership? Your vacation property is yours, and you bought it for a reason. If you are planning to spend large amounts of time in your property, know that total revenue will be lower. However, many people find this is a great way to pay for the property’s costs, even if margins are lower.
Focus on what adds value. It may be tempting to use the cheapest bedspreads and obtain your artwork from consignment shops. Just remember, they are the cheapest methods for good reason. Rather than opting out of quality furnishing and fixtures, try to approach each project by understanding what value you can add to your property that will intrinsically lead to justifiably higher rental rates.
In the ever increasing competitive market of vacation rental properties, using techniques to make your property standout will give you an advantage in revenue production. If you’d like to discuss implementing these strategies, please contact me at [email protected]