Written by Andrea Needham, Eldersday.org, August 29, 2022
Many people who travel don’t like to stay in hotels, but they still need accommodations. Vacation homes are popular alternatives. Homeowners can make a substantial income by transforming their properties into short-term rentals, and careful preparation will maximize the profit.
If you’re planning to turn a home into a vacation rental, experts advise that you treat it as a business. Check with local and state governments to ensure that you comply with all laws, rules, and regulations. You’ll probably need multiple permits and a federal employer identification number if you hire people to help you. Access Adventure shares some more tips on prepping your home to be a vacation rental.
How Can You Protect Yourself?
Many select a limited liability company as their business structure. An LLC has several benefits, such as protecting the owners from personal liability, tax breaks, and simplified paperwork. Although you can hire an expensive attorney to help you set up an LLC, using a formation service can save money.
Check with your insurance company about the types of policies you’ll need for your vacation rental. You’ll likely want coverage to protect you from repair costs and loss of income if someone damages your property and to cover the contents and home.
How Much Should You Charge?
A competitive pricing strategy is crucial. Rates vary depending on several factors, including:
• Size of home
• Amenities you offer
• Time of year
• The number of guests
Research comparable properties in your area to find average pricing. Don’t overcharge, but be sure to charge enough to cover your mortgage and insurance payments, taxes, property management and maintenance, advertising, and upkeep expenses.
How Can You Compete?
There are several things you can do to ensure maximum occupancy:
• Research reviews for other properties to see what people liked and didn’t like about them, then make
appropriate improvements to yours.
• Provide full descriptions and multiple photos of your home in advertising.
• Maintain a clean and comfortable atmosphere.
• Choose effective marketing strategies.
• Include sought-after amenities.
• Offer information about local attractions, restaurants, entertainment, and events.
• Network with your local Chamber of Commerce and other businesses.
What Amenities Should You Offer?
Regardless of location, vacation rental guests look for several amenities when choosing where they’ll stay. If you’d want it, include it. Basic amenities include Wi-Fi, TV, and other types of stay-at-home entertainment. The kitchen should have a coffee maker, pots and pans, dishes, utensils, paper towels, trash bags, and cleaning supplies. Think about what guests will likely do while staying in your home and try to provide amenities in line with those activities.
One of the most important things you can do is provide comfortable furniture, bedding, and pillows. Guests who don’t sleep well won’t leave positive reviews, and negative comments can cost you money.
If your home is in a warm climate, in addition to providing a refreshing breeze, ceiling fans can also help to lower your energy bills. When used in conjunction with air conditioning, ceiling fans can help to circulate cool air throughout the room. A ballpark range for a ceiling install is between $144 and $352, but costs go up if you need to install wiring.
How Can You Market Your Vacation Rental?
Property owners choose a variety of marketing platforms, including social media posts and ads, email marketing, a
comprehensive website, and local tourist centers. The more information you provide in your marketing materials,
the more comfortable potential guests may be with booking your rental. Include:
• How many people the property will accommodate
• The type of home
• If guests can bring pets and children
• The distance to nearby attractions
• Guest reviews
Use search engine-optimized keywords in your text to place higher in search results. You can also benefit from content marketing and publishing blogs regularly.
Are You Ready?
Researching pricing and customer reviews can give you an edge over your competitors. Employ wise marketing strategies and provide a comfortable rental to create a profitable vacation rental business. Make sure to include desired amenities like quality bedding, ceiling fans, TV, and Wi-Fi.