Investing in the short-term vacation rental market is a good way to ensure protection against stock volatility and generate passive income. It is also ideal for a real estate investor who is looking to diversify his or her portfolio. When you check out a short-term property investment website, you will see that short-term rentals come in various types, from mountain cottages to beach houses.
However, how can you attract more guests to your property, choose property management software, position yourself for success, and get the most out of this type of business?
Choose The Best Location When Buying
Location is a critical factor when looking for an opportunity to invest in the short-term vacation rental market. You may find a well-built property, but when it ceases to be in an optimal location, it is less likely to become a successful investment.
When hunting for a short-term vacation rental property for sale, you should:
- Choose locations where the demand for vacation rental property is high
- Know the short-term rental regulations and laws for a particular city
- Find evidence of ongoing construction activity, economic growth, and population growth
- Use a short-term rental investment calculator to gather information on how well the average short-term investment property does in a city and the profit it yields
Another factor that you have to consider is the property’s proximity to amenities, entertainment spots, and transportation hubs. Of course, the community should also be safe for your future tenants and guests.
Set The Right Rental Rates
To determine the best price for your property, use a short-term rental website to conduct all-inclusive market research. You can also use online vacation rental pricing tools, like:
- Airbnb’s iGMS
- Beyond Pricing
- AirDNA’s pricing tool
Take Advantage Of Tax Deductions
When renting out a vacation home, there are certain expenses that you can deduct from the property tax and reduce the tax liability on your short-term rental investment. These include:
- Bonus depreciation deduction of 100 percent of expenses on land and property improvements for business
- Pass-through deduction for landlords who own property through sole-proprietorship and S-Corp and C-Corp business entities
- New Section 179 deductions for improvements
However, some states have different tax deductibles on vacation rentals, so do your research for the location of your prospective property. You can minimize the risk of making mistakes simply by hiring an expert to help you file taxes.
Use A Good Marketing Strategy, Especially During Off-Seasons
A mountain ski cabin operator recognizes warm summer months as off-peak, while a beach short-stay rental is less popular in the colder months.
As the proprietor of short-term investment in real estate, it is up to you to identify your low season and implement an off-peak marketing strategy. Here are some tips that will be helpful:
- Be aware of special holidays and local events: There are special holidays, like Thanksgiving Day, when families reunite and celebrate, and a vacation rental with a huge living area and a full kitchen will be a hit with these types of guests.
Promoting community calendar events is also a good way to attract more bookings during off-seasons. Reach out to local event organizers, concert venues, and tourist destinations to include you on their websites or brochures.
- Update your presence on rental listings: Make sure you are highly visible on the online listing you use for your property. You can do this by creating an eye-catching title, using a punchy description, posting stunning photos of your property, and completing your profile.
- Provide better offers than your competition: Consider reducing the daily price, and offer guests special weekend and weekday rates. You can also provide extra services or amenities, like a hot tub, barbeque on the balcony, or bicycle and motorcycle rentals. These and other products and service features your competitors lack will definitely bring in more visitors to your property during the low season.
Take The Necessary Steps To Increase Repeat Guests
There are many things that you can do to make your guests come back year after year. For example, you can include personal touches to your services that make guests feel like you truly care about them. For business travelers, you should ensure they have everything they need, like a fast Wi-Fi connection, a desk or convenient space where they can work, and blackout curtains in the rooms to help them sleep better.
Aside from this, you can provide referral discounts or discount codes. You can also send out re-booking requests at the same time of the year as the guests booked previously Moreover, you can send your past guests emails on recent home improvements that you made or about upcoming local events to keep them updated.
Start slow, so that you can figure out what mistakes to avoid and what provisions best align with your guests’ needs. Keep reading more tips on a recognized short-term rental investment website in order to become better informed on what it takes to be a successful vacation rental owner.
Setting up your short-term rental for business means defining the overall interior design style to please all your guests. Amazing Interior Design provides you with fun DIY tips that will transform your rental into a stunning vacation home. Find out more here!