One of the biggest fears any new business has is “Will it bring in any money?” This question has stopped many new business ideas in their tracks as people let the worry and fear take over. What starts out as excitement and a desire to build can fall very quickly if profits are not made and maintained. When it comes to a business venture that requires capital up front (often borrowed capital), it is vital to ensure that investment has a worthy return. Generating revenue on short term rentals can be done and sustained as owners figure out the keys. So, if you find yourself asking “Are short term rentals profitable?” Here are 5 methods to ensure reliable income on vacation rentals!
Location, Location, Location For Vacation Rental Income!
Whether your rental is a cabin in the mountains or a beach bungalow, location matters! If somebody wants a view of the ocean, but your rental property is 3 blocks away, behind a high rise, they probably will not book with you. And a cabin along the Appalachian Trail will do better if it is closer to the trail, as most thru-hikers do not have a car to drive just anywhere. Being aware of what people want will help you decide what property is best to invest in.
Market to the right audience For Short Term Rentals
Tenants that trash the house or refuse to leave the house is a nightmare! Having to replace furniture or appliances between tenants can get costly QUICK! Being selective with your tenants can reduce extra costs and lets you keep more of your revenue. Using platforms like Airbnb, you can see reviews on potential renters before you accept a booking. This can save you a lot of headache and money.
Market to a Wide Audience on Airbnb or VRBO
Keeping your vacation rental booked up may take more than local listings. Being found on a national or international platform can broaden the base of potential renters. For example, if you have a rental house in Myrtle Beach, most of your potential renters will be from out of state. Classic Bed & Breakfasts are even putting their listings on Airbnb because how many more people are able to quickly and easily find the listing. Having the backing of a widely known platform can garner trust with potential vacationers as well as simple visibility. This can be the step that makes your business plan viable.
Plan for Expenses with your Short Stay Accommodations
Things like rental insurance, short term rental tax, utilities, consumables like toilet paper and of course, the rental mortgage. Having a plan in place can ease some of the stress. If you know what to expect, you can plan for it and adjust accordingly. Having your rental property listed for a competitive price may gain more bookings but if it is not enough to cover the costs, it will simply not be enough. Talking to a group like Brass Financial can help you figure out what a budget should look like. Covering costs and having a contingency are vital steps to ensuring your income is stable with a short stay rental.
If you are unsure of your own ability, consider hiring a professional for part or all of the process. Professionals get paid to do what they do because they have the skills and knowledge to do it well. You have options for everything from the small tasks to the big! Perhaps a rental agency can get your listing into a market that you would not otherwise have access to. Maybe a contract with a travel agent can send more vacationers to your vacation rental. Look into having an accountant file taxes to potentially reduce part of your tax liability. A professional can lower your costs overall, as well as grow your revenue. It can be the investment needed to make the big picture work!As plans come together, give Brass Financial a call to get the mortgage to get that vacation rental you are wanting and get the adventure started!