Investing in vacation rental properties involves more than simply buying a place in a location that’ll appeal to Airbnb customers. You’ve got to treat your vacation rental properties as a business. Among other things, this includes ensuring the interior matches the vibe of your property and attracts renters.
Open the door to opportunity by learning more about investing in vacation rental properties.
How to Start a Vacation Rental Business
If you already own a property suitable for vacation rentals, then you’ve got a big advantage. But many potential owners of vacation rental properties must start by purchasing a property.
Before you buy a property, though, you need to answer the following six questions about starting a vacation rental business.
1. Where do you want to operate a vacation rental business?
Do you want it to be close to home so you can manage it yourself? Or are you OK buying a rental property hundreds or thousands of miles away, and then letting a property manager handle most or even all of the day-to-day operations?
2. Which location will be best for rentals?
Before deciding to buy a property, do your homework. Are there places where the rental activity and potential return on investment are especially attractive? The ideal spot could be in your backyard or thousands of miles away. Do your research and don’t overlook places that might not have initially been on your radar.
3. How much money do you have for a property purchase?
In many cases, a lender will require that you make a 30% down payment on a property you’ll be renting out. That’s because a lender is taking a greater risk when it lets you borrow money for an investment property rather than a primary residence. Keep in mind that you may need to tap into retirement savings or an investment account to come up with the down payment.
4. How much money can you allocate for a vacation rental business?
A vacation rental property can go unrented for days or even weeks, depending on the location. As such, you must be prepared to pay the mortgage and other property expenses when the rental property isn’t occupied.
5. Who will be on your team?
It’s critical to rely on experts to help you enter the vacation rental business. Otherwise, you could make some costly missteps. Find a real estate agent who’s familiar with the market you’re interested in, knows where short-term rentals are allowed and are not allowed, and will be an advocate for you. You’ll also need to line up a lender who’s easy to work with and familiar with investment properties, as well as a property manager if you’re not going to handle reservations, cleaning, and other tasks on your own.
6. What is the property’s earning potential?
Before dedicating tens of thousands of dollars to buying a property, you should figure out what its earning potential is. You can ask your real estate agent to help you create revenue projections, or you can use any number of online calculators to do it. Among the numbers you’ll take into consideration are annual revenue, annual expenses, average daily rate (the amount of rent charged each day), occupancy rate, property appreciation or depreciation, and the effect of seasonality on revenue and profit.
How to Prepare Your House for Airbnb
Regardless of whether it’s a beach cottage, a high-rise condo, or a mountain cabin, you must prepare your house for Airbnb and other rental platforms so you can maximize your investment. Here are five things you should do once you’ve acquired your property.
1. Determine whether any changes are needed
Does the exterior need a fresh coat of paint? Is the refrigerator not doing its job? Is there some electrical work that’s long overdue? Look at all aspects of the property, and invest money in fixes that can improve its rentability, comfort, safety, and security.
2. Look into new locks
These days, owners of most vacation rental properties replace traditional locks with digital locks to make it easier for renters to enter and exit. Plus, digital locks allow you to change the door code between guests.
3. Make your place camera-ready
Your rental property should look great, both inside and outside. First impressions are important, so you want photos of your property to stand out (in a good way) among the thousands of rental listings online.
4. Market your property
Renters likely won’t (or can’t) find and rent your place unless you advertise it on platforms like Airbnb and Vrbo. Listings on these websites aren’t free, of course, but the revenue you reap can easily offset the marketing costs.
By the way, when you’re writing descriptions of your property, think like a renter — make the place sound as enticing as possible, and emphasize its unique aspects (proximity to major tourist attractions and amenities such as a swimming pool, for instance).
5. Establish a money-tracking system
Whether you use a spreadsheet or software designed for vacation rentals, it’s vital to keep track of the money coming in and going out. This way, you can stay on top of whether your property is a money-making or money-losing venture and whether you should adjust your rental rates or cut back on expenses. In addition, collecting and reviewing this information regularly can help you tremendously when it comes time to file your taxes.
How to Furnish an Airbnb
When you’re furnishing your vacation rental property, remember that you’re decorating it to attract renters and not to satisfy your own wants or needs.
With that in mind, it’s often best to start with a theme for your rental property. Do you want to create a beach vibe? Are you looking to help renters connect with nature? Do you want the look and feel to produce a festive, fun atmosphere? Or, do you want to create a sleek, modern space?
Once you’ve got the theme nailed down, it’s time to figure out precisely how to deck out your space:
Should you repaint the interior?
If so, what colors will match the emotions that you want your guests to feel? For instance, calming colors like blue, gray, and green are ideal for renters seeking a relaxing getaway.
What should you hang on the walls?
Are framed photos the way to go? Or is artwork on canvases a better choice? Whatever you select for wall decorations should coordinate with the paint scheme and all the other elements of your property’s theme.
Do you need furniture?
Maybe the property came fully furnished, but you’d like to swap out most of the furniture for new pieces that mesh with the property’s theme. Or perhaps the property isn’t furnished, so you need to rent or buy a sofa, some living room chairs, a dining set, a couple of bedroom sets, and other items. As with everything else, the furniture should reflect the theme and what your guests are looking for and not necessarily reflect your personal taste.
Furnish Your Vacation Rental with CORT Furniture Outlet
Are you ready to start a vacation rental business? Find what you need to furnish your rental properties at CORT Furniture Outlet. Shop stylish decor and durable, quality furniture that’s built to last at a fraction of original retail prices.
Shop online or at your local CORT Furniture Outlet location to find everything you need at up to 70% off new retail prices. The best part? You can take home your furniture the same day you shop. After all, the quicker you can furnish your rental, the faster you can book renters! Start browsing online or in-store today!