Owning a vacation rental property can be an excellent source of additional income; however, there are a lot of factors to consider before making such a big investment.
Whether you are looking to invest in a rental property or interested in renting your own vacation home which can help offset monthly expenses (mortgage, utilities, HOA fees) this blog can help answer some of your initial questions about what it takes to create a profitable rental property.
How Do You Make Money with a Vacation Rental Property?
Do Your Research:
Know your market – Learn as much as you can about the vacation rental industry, and what renters are looking for in your market.
Depending on the location of your home, certain types of vacation rentals may be more in-demand. For example, beach cottages, cozy mountain cabins, modern condos or townhouses, ocean-front villas, lake view luxury homes, etc.
Location, location, location
Homes that are near popular attractions (ski slopes, the beach or lake, local points of attraction) are great choices for an investment property.
Larger homes with more bedrooms and bathrooms typically correlate to higher nightly rates.
You’ll see a better return on investment if you choose a destination location that is accessible and desirable year-round. This could be due to weather (like Palm Springs), or seasonal activities (Central Oregon).
Check on local city, county, and HOA (homeowner association) ordinances about vacation rentals. Some regulations limit the maximum number of guests, impose strict parking restrictions, or simply outlaw short-term rentals.
Consider a Vacation Rental Management Company
We understand there are many factors when deciding to invest in a vacation rental property, and everyone has their own reasons – whether an alternative source of income, or a second home to enjoy with friends and family on holidays and vacations. Whatever your motivation, a vacation rental management company can help guide you through the vacation rental process, offer assistance with monthly reporting, tax forms, pricing analysis, increase your visibility through strategic marketing and advertising, and partner with you to maximize your investment.
At Meredith Lodging, we pride ourselves on our owner-first business model, and work tirelessly to provide attentive care to our Owners and their valued home. We guarantee our industry-leading experience and market knowledge will help maximize your profitability.
What kind of amenities should you make an investment in?
Guests typically search for certain amenities more than others, so you’ll improve your home’s visibility and profitability by offering these perks:
- Welcome pets – Our data shows that properties that allow pets earn an average of 8–12% more revenue than those that don’t. We also recommend making your home truly pet-friendly by providing designated water/food bowls, a spare leash, waste bags, etc.
- Add a hot tub – This is especially true for homes with ocean or lake front views, or homes located in colder climates.
- Provide WiFi – Internet access is a basic expectation of guests today, and you may miss out on bookings if you don’t provide it. If your home is too secluded to offer WiFi, we recommend marketing your home in the property description as a lovely place to relax, unplug, and recharge.
Other amenities that guests look for and value in a vacation rental:
- Fully equipped kitchens
- Smart TVs with streaming services
- Bikes, pool tables, foosball, darts, board games
- Plush towels & high-end bedding
- Smart mattresses
Find a Vacation Rental Insurance Provider
Your rental property is an important asset and investment. Protecting your valued property from any future damage or unforeseen losses should be a top priority.
We recommend contacting your personal insurance provider to explore homeowner or landlord insurance options best suited for your vacation rental property.
List Your Property on Airbnb, Vrbo, and Other OTAs
Listing your property on OTAs (online travel agencies) such as Airbnb, and VRBO expands your visibility and market reach.
Provide a detailed description of your home as well as updated photos highlighting your home’s best features (ocean views, spacious gathering areas, hot tub, chef-style kitchen, etc.
Meredith Lodging will promote your home across multiple platforms and third-party websites using SEO-enhanced home descriptions, and professional and high-definition photos and 3-D tours (when applicable). These marketing techniques result in a higher booking rate.
Know Your Tax Benefits
You’re Running a Vacation Rental Business, So Use the Tax Benefits
When it comes to making money with your vacation rental, it’s important to understand the tax deductions you can claim as a vacation rental homeowner. According to the IRS, you can deduct “ordinary and necessary expenses” related to your rental property, including advertising, cleaning and repairs, insurance, mortgage interest (depending on your state), professional services (like CPAs or accountants and lawyers), rent collected, supplies, taxes, travel expenses, and utility bills.
As a vacation rental homeowner, you can deduct a wide variety of expenses from your federal taxes. These deductions can help offset the costs of owning and operating your rental property, making it more profitable in the long run.
In addition, property management fees are another deductible expense. By working with a property management company like Meredith Lodging, you can maximize your deductions while also having all the help you need to maximize your profit.
Know Who Will Be Cleaning & Maintaining Your Vacation Rental Between Stays
Whether you are cleaning your vacation rental between stays, or hiring your own cleaning personnel, we recommend creating a check-list to guarantee thorough cleanliness and consistency.
Meredith Lodging prides ourselves on taking exemplary care of your valued investment by investing in our staff. Our employees undergo a full background check and extensive training, and each home undergoes a walk-through pre-check-in and post check-out inspection to ensure our standards of safety, quality and cleanliness are being upheld.
Ultimately, successfully managing a vacation rental can take a lot of work. It is up to you to determine how involved you want to be. If you would rather enjoy a profitable income without the operational headache, you may want to consider partnering with a vacation rental management company.
Meredith Lodging offers end-to-end property management that puts the individual needs of our Owners and their investment first. We take care of all the work to maximize your home’s ROI so you can sit back and reap the rewards.
If you are considering renting your vacation rental property, contact us to learn how our comprehensive services and attentive care can help maximize the profits of your investment property. Contact us at email@example.com or 866.996.7498. We can’t wait to partner with you!