Introduction

What is a Short-Term Rental Property?

Short-term rentals are most commonly used by people either on vacation or business trips. Stays vary from a few nights to several weeks. It’s normally a residential property, unit, or accessory dwelling that is rented out to guests. Before investing in one, you’ll want to be able to answer yes to the following questions:

• Do you have time/are you able to offer exceptional service?

• Do you live near your rental?

• Are you contactable?

• Is your property in a desirable holiday location or near a tourist hotspot?

• Is your property right for the job?

• Can you afford higher vacancy rates?

How to Make Your Property Stand Out

The first rule of successful vacation rentals is that they live and die on the reviews they get. Bad reviews will see your vacancy rates climb and the amount that you can charge decline. A small welcome gift adds a personal touch that guests will surely appreciate, and they’ll find it hard to leave a bad review provided that everything else is in order.

Add personality to your copy – guests at your property are probably going to be on holiday after all. Highlight local attractions, restaurants, and other things to do. Lastly, photography matters. When it comes to reducing your vacancy periods, getting great photography is vital.

You can outsource short-term rental management to a professional company. There are several payment structures that you might choose from depending on how much involvement you want in managing the property yourself.

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Choosing the Right Property

Deciding a Location

Location plays a huge role in whether a property is a good investment or not. Do some research and try to identify areas that could be of interest to potential guests and if the local tourism industry is driving demand for vacation rentals in the area. Factors like proximity to popular attractions, natural beauty, and local amenities will make for a highly sought-out rental property.

Once you’ve narrowed down your search to one or two potential locations, it’s time to examine the market and demand even more closely. As a vacation rental investor, you want to look for areas that have high demand and relatively low competition from other rental properties. This way, you can maximize your potential returns.

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Rooms and Amenities

After having researched the location, you'll want to know the demographic of people who visit. If it's a hotspot for families with younger children, you may want to offer more bedrooms, a pool, or a game room. You could substitute multiple bedrooms for a hot tub if it's a popular honeymoon destination. Those who travel for work will likely need stable WiFi and a desk.

Price Range

Finally, you should think about how much you can realistically charge for rent. Vacation properties generate income that is dependent on the season. You can expect strong demand during high seasons, but the demand needs to be lucrative enough to offset less busy months. Knowing the average rental rates for the area will help you to determine the optimal price point for your property. You can determine an optimal price point by finding out how much comparable properties in similar locations are charging and using those rates as a guideline.

Higher vacancy rates can be costly, as they mean prolonged periods of time without rental income. The cost of running a short-term rental or Airbnb includes increased maintenance and cleaning costs after every visitor. Investing in energy-efficient solutions for the property will keep your utility bills down and help improve your cash flow.

Marketing Your Property

Online Marketing

When it comes to marketing your short-term rental property, it pays to think outside the box. Utilizing online marketing channels can help you reach a wider audience and get more bookings. Start by creating a listing on dedicated rental websites like Airbnb, VRBO, or HomeAway. Additionally, you can use social media platforms like Facebook and Instagram to promote your rental and share photos and other details about your property.

Creating a website is also a great idea to showcase your property and provide information to potential guests. Website builders allow you to create more exposure without needing any prior coding knowledge, and many offer SEO benefits. Investing in SEO will increase visibility for your property. When potential guests search for terms related to your property, you want your listing to be one of the first ones they see. You can do this by optimizing your website with keywords related to your property and other tactics to boost your search engine rankings.

Another way to get your property seen is by using online booking services. These services allow guests to book your property directly from your website and often come with a range of features to help manage bookings and communicate with guests.

Offline Marketing

Offline marketing is the analog alternative to getting the word out about your rental property for those who aren't as tech-savvy. Flyers and posters are an effective way to reach potential guests. They can be distributed in local tourist areas, handed out at events, and sent through the mail. You can also use print advertising in local magazines, newspapers, and other publications. This may be more expensive than other forms of marketing, but it can be worth it if you’re targeting a local audience.

Ultimately, word of mouth will act as a testimony to your property or the great service you provide. Encourage guests to leave reviews on popular rental sites and ask them to tell their friends and family about your property. You may even consider offering a discount to guests who refer others to your rental.

Networking

Lastly, you can network with other rental property owners in your area. Participate in Facebook groups, online forums, and other online communities to not only get your property seen by potential guests, but to build relationships with other landlords. Reach out to them to see if you can collaborate on marketing efforts and share leads. Maximize your reach and get more bookings by connecting with local businesses that cater to tourists and see if they’ll help promote your property. 

Managing Your Property

Creating a Rental Agreement

A well-crafted rental agreement is a key element of managing a successful short-term rental. Not only will you need to consider your personal needs, but the legalities of your area. The rental agreement should go over the rental period, price, security deposit, pet policy, and other rules and regulations.  It should be clear and concise so that all parties understand the terms.

Finally, when creating a rental agreement, make sure to include details about your rental insurance policy. Rental insurance is essential for protecting your property and any potential liabilities that may arise from renting it out. Make sure to include the amount of coverage, the type of coverage, and any other specifics about the policy in your rental agreement.

Finding Reliable Tenants

It's also helpful to cover information about your tenant screening process to protect your property and ensure that you are renting to reliable tenants. Your tenant screening process should include things like background checks, credit checks, and employment verification. Ask for references from past landlords to verify information with them. You should also include a clause about damages and potential eviction for non-payment or breaking of rental rules.

Finding reliable tenants for your short-term vacation rental property is crucial because they are only temporary guests, and their behavior can significantly impact the condition of the property and its reputation. Trustworthy renters can help minimize the risk of property damage, complaints from neighbors, and negative reviews, ensuring a positive experience for both you as the owner and future guests. Additionally, reliable tenants are more likely to follow the rules and regulations set by the rental agreement, leading to fewer problems and headaches for the owner.

Conclusion

Short-term rentals provide many benefits to property owners. They offer an alternative source of income that can supplement other sources of revenue, such as salary or rental income. Investing in a short-term rental property also allows investors to enjoy consistent returns over time and lower risk than other types of investments. Additionally, investors can take advantage of dividend reinvestment opportunities and DRIP programs, which can help to grow their investments over time.

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