The number 1 question that you should be asking yourself when you are renting out a vacation rental property is: ´How can I maximize my vacation rental income?´ From over 15 years of experience as a vacation rental owner and owner of a villa rental agency I know what makes your vacation rental realize maximum income. Please allow me to share these Lessons Learned with you so you too can maximize income and profit!
The 12 Tips to Maximizing Vacation Rental Income are:
- Rent Out Yourself
- Rent Out With A Local Agency With Strong Brand
- Advertise on Online Travel Agencies (OTAs)
- Decorate To Impress
- Upgrade Your Amenities
- Kitchens and Bathrooms To Die For
- Take Amazing Pictures
- Write An Enticing Description
- Set The Right Prices
- Offer The Best Experience Possible
- Reviews Matter – A Lot
- Fully Booked
Like any investment, vacation rentals will bring you the highest income and return on investment if you put some work into it. These 12 Tips are easy to implement and will teach you some skills that you can use in renting out other properties as well. Let´s get started!
1. Rent Out Yourself
This step is often overlooked by many. The reason is simple: it takes work to do this. Make a website, get educated in marketing and sales, answer guests questions. I totally get that. But it also offers you the best way to really find out what prospective guests are looking for so you can improve your offer.
There are so many resources available for anybody that would like to ´direct book´ more with their own platform. Yes, the days of paying a webdesigner and builder over 5000 Dolar for a simple site are over (fortunately).
WordPress has made it super simple to create a website with a vacation rental theme in under a day. Register your URL on Godaddy, get your hosting set up, get your WordPress website and proper theme and start building yourself. No coding experience needed.
There are many cost efficient (you will see that just booking through agencies can easily cost you up 15% commission for bookings alone) ways you can market your vacation rental yourself. I write about that here, and more specific about Instagram here , Facebook here and other Social Media Marketing here.
When you do have guests that have booked with you in the past, you can now easily get them to ´repeat book´ on your own platform. Talking about cheap!
2. Rent Out With A Local Agency With Strong Brand
Most local agencies will offer you 2 basic services at least: ´Bookings´ and ´Talking Care of Guests´. The latter might be something you are interested in when you do not have a lot of time to dedicate to your guests. The former would only make sense if they have a strong brand that will generate bookings for you from their collective repeatbookers and their own marketing.
If they just offer to advertise your vacation rental on the OTAs (next point), there is only the advantage that they will sort out the guests communication before arrival for you as well. Just be aware that the commission percentage will add up. maybe you would like to advertise on these portals yourself.
3. Advertise on Online Travel Agencies (OTAs)
There is just no way around these behemoths like Airbnb (How to list in Airbnb), Booking.com and Homeaway with their enormous reach. These guys have marketing budgets that make most countries GDPs blush. It is fairly easy to list your property on these sites (choose multiple websites) and they can drive a lot of travellers to your property.
´So, why mess with your own website and working with an agency then?´, I hear you think. Well, because the interest of the OTAs (Online Travel Agencies) might not always be aligned with yours.
In the years before 2020 Airbnb was the favourite of them all and millions of vacation rental property owners identified themselves with being an Airbnb-er and did their best to become a Superhost.
Which is all good……until COVID19 came along and Airbnb decided to cancel hundreds of millions of Dolars of turnover from these owners. The result has been a lot of owners cancelled their Airbnb account and are looking for ways to ´book direct´. But they found out they were close to 100% dependent on Airbnb for booking. OUCH….That hurt. Do not let that be you. Make sure you have alternaties.
If you are wondering how to stay somewhat independent, check out this article.
4. Decorate To Impress
It is easy to think: ´mwah, it is just for the renters, let´s get the cheap decorations´. Profit is Income minus Costs, Right? The only problem is: It shows. When everything is low grade IKEA and guests are renting to stay and live in your villa for weeks, guests tend to complain about that.
Do not hang your favourite original Picasso in your beach house, but do make sure that you have invested in some (local) artwork and nice furniture. Just make sure it is ´idiot proof´. I once put a light coloured sofa in a luxury villa in Spain, only to have to wash the covers every week: not recommendable.
When your place looks nice, your guests tend to look better after it as well: Double Bonus!
5. Upgrade Your Amenities
That is just a logical extension from the previous point. Buy a TV that looks good, a stereo that sounds good, a gaming console for the kids, super fast internet (= like oxygen to the guests nowadays).
And once you have bought these, make sure you mention it in the description of your vacation villa as well. When you mention that you have a Samsung 100 inch with BOSE surround set and PS3 gaming console….you know that a possible 50% of the family members have made their decision to rent your place already!
6. Kitchens and Bathrooms To Die For
Ask any real estate agent and they will all agree: Kitchens and Bathrooms are important. Just think of it this way: In order to rent your place, your prospective guests will want to visualise how they will enjoy themselves.
´In this kitchen I will cook for the 3 families that are with us´, does not really work when your kitchen is small and dark and looks old.
A trick I often use is to paint the cupboards and invest in a Silestone counter top. That stuff is so solid that will last you decades and looks modern and clean.
What to have in your vacation rental kitchen? Click here.
7. Take Amazing Pictures
This is number 7, but it could very well be the most important point in the list. It is important that I wrote a whole article about it to share some essential tips with you.
You are asking total strangers, who have never been at your place, to pay you for staying in your vacation house. Reserve the risk a bit by showing them everything they will see and help them visualise.
Easily the most crucial step in advertising your property. Get professional help if needed. If you want to be different: extend with video and a 3D virtual tour of the property.
8. Write An Enticing Description
Yes, you still have people that actually read online. Especially when they are trying to make sense of spending thousands of Dolars for their vacation.
This is a point where you can easily excel, as most home owners (most people) are terrible at this.
To help you out, I have written an article with tested methods for vacation rental description writing and tips. Check them out and blow the competition out of the water!
9. Set The Right Prices
Another point where most owners and agencies need serious improvement: Setting the right prices and the continuous managing.
At our company Club Villamar I always tell my owners that want to keep their price high and fixed (´because their villa is the Ferrari of all villas´) and not rent out: ´Look….it is the price. Do think guests would like to stay in your villa for 1 Dolar per night?´ ´Yes, sure´, they reply. ´So it is the price!´
That might sound a bit simple, but we have experienced thousands (yes thousands) of times that if you market the price right, monitor the results and adjust accordingly…..rent out fully.
I have written an article about Pricing Your Vacation Rental here.
We have owners that say: ´Robin, all i want is maximize my income, do it´, giving me all flexibility and these owners rent out over 40% profit (not turnover) more than other owners? How come? Check out point 12.
10. Offer The Best Experience Possible
Ok, this one goes without saying, so I was hesitant to include it. But we can really learn form high end resorts and hotels that have been in this hospitality game a lot longer than we have.
Leave a welcoming package to greet your guests on arrival with artisan snacks, leave a hand written note mentioning the guests by name, let your daughter or son make a welcoming drawing (we have done this for years), leave some chocolates, leave a bottle of wine.
All these things are cheap and they go a long way. To be honest: The guests almost expect it nowadays. It is not easy to ´WOW´ your guests, but you should certainly strive to do so. Why? Because it is the right thing to do, you would appreciate it too and………
11. Reviews Matter – A Lot
Reviews matter. It is one of 3 factors look for first when potential guests are looking to book your property.
- Stunning Pictures
- Competitive Price
- Good reviews
Just think of how you search for a property to stay in yourself. That is why it is so difficult to get a property booked with no reviews. As a strategy you might want to set low prices if you are just starting out renting out. That way you will quickly have guests that are likely impressed with the property, experience and price/quality relation. After that slowly increase the prices.
Make sure you have good reviews and many of them. It is called ´social validation´ and the logic goes like ´OK, if (a lot) of other people rented this, I am not an idiot for renting this as well. The other people liked it and so I wil probably like it too´. Yes, that simple. It is that part of our brain that started us running across the savannah when other humanoids did as well. There was probably a danger even though you did not see it yet. It is a life saver.
12. Get Fully Booked
This is a concept that some of our owners struggle with quite a bit, so let me explain the math.
Once your fixed costs are paid for by your guests. The more you rent out, the more you will make…….as long as your variable costs are covered.
That is why it is essential to have your vacation home fully booked. All nights empty do not make you any money. And that is why managing your prices is such a big deal.
But I am sure that with the provided tips you will have no problem to make sure your vacation rental is fully booked!