Airbnb is one of the fastest growing industries in the US right now. So whether you’ve already invested in a second home or are planning on buying a vacation rental property, you need to know one thing to benefit from this real estate investment strategy. And that is how to make money on vacation rental property.
This guide will take you from beginner to pro and you’ll be making money with rental properties in no time. Now, investing in real estate isn’t the easiest thing (nothing worthwhile is) but with our tips, you can learn how to make money on vacation rental property in order to benefit from these very lucrative investments.
1) Do Your Research
This should be the number one step in any real estate investment. If you haven’t invested in vacation homes before, then you probably don’t know all the ins and outs yet. Lucky for you, there are mounds of information available on the internet now. Mashvisor’s real estate investment blog covers every aspect of vacation rental investing. It’s a great place to start to learn all about short-term rentals– from finding to buying to managing them.
That’s another thing- vacation homes are short term rentals. So even if you’ve invested in traditional rental properties before, managing and successfully operating a vacation home is a different realm. You’re targeting a different tenant group, renting your units for shorter periods of time, and marketing/listing your property differently.
One of the key factors for learning how to make money on vacation rental property is that last part. Listing your investment property on popular online platforms like VRBO, HomeAway, or Airbnb can boost its performance. We’ll be focusing on making money with Airbnb since it is such a popular platform for vacation rentals, but this guide will work no matter your real estate marketing strategy.
Now let’s get into more details on how to make money on vacation rental property once you’ve done your homework.
2) Buy the Right Vacation Rental
Investment location and property type, among other things, can determine the type of Airbnb returns you get. So if you really want to know how to make money on vacation rental property, consider these important factors before investing:
It’s important to strategically choose the right location for your vacation rental property. This means you need to invest in areas near popular attractions (beaches, ski slopes, theme parks, etc.). Owning an Airbnb investment property in a city with high tourism rates is the best option.
Related: 8 Best Cities for Airbnb Investment in 2019
An extra tip for Airbnb investors– keep track of any new regulations/bans on short term rentals before deciding on a city. Check county, city, neighborhood, and HOA (homeowner association) ordinances about vacation rentals. Some areas have capped the number of Airbnb guests you can host in a year or have fined people for owning an Airbnb without a license. So even if you already know how to make money on vacation rental property, there may be some regulations getting in the way of that.
How to make money on vacation rental property throughout the entire year? You can generate higher Airbnb rental income by choosing a location that is popular/desirable year-round.
Obviously, the more rental units your vacation home has, the more guests you can host. This is where you decide between a single family home or a multi family property. The size of the vacation home can affect the rental rate as well; if it’s larger or has multiple bedrooms/bathrooms, you can charge more per night.
Related: Four Things to Consider Before Purchasing an Airbnb Investment Property
3) Decorate the Vacation Home and Update Its Amenities
Creating a beautifully furnished and decorated home is how to make money on vacation rental property. Finding investment properties in the best place to invest in real estate isn’t enough. Your property has to actually attract Airbnb guests. You want people to be drawn to your rental property, not another one.
Decorating and Furnishing
Most guests really appreciate a well-stocked and kept kitchen, comfortable bedding, and trendy decor. You can always hire professional interior designers, but if you just go back to step one and research what guests look for in a vacation home, that should be enough to lead you in the right direction.
There are some amenities that guests simply can’t go without. Providing them will definitely give your vacation home the attraction you’re looking for.
The first is to welcome pets. Some guests travel with their pets and have a difficult time finding a rental that allows this. Why don’t you be the place that does?
Another great addition to your vacation home is a hot tub. This especially makes a difference if your vacation home is in a colder climate or in an area that has an amazing view.
The last, but certainly most basic and essential feature for a vacation home, is Wi-Fi. Unless you’re listing a secluded cabin for guests to relax and unplug, all vacation homes should have internet access. These three amenities will boost your rental occupancy and the positive feedback will draw in even more tenants to your vacation home.
Related: What Kind of Airbnb Occupancy Rate Can You Expect?
4) Determine Rental Rates
You’ll never know how to make money on vacation rental property if you don’t first learn how to set your nightly rate. With today’s technology, rental rates are more dynamic than ever and have become one of the most complicated parts of Airbnb property management.
You could try to analyze vacation home rental comps (properties similar to yours) and set the rate you think is right. However, an easier and more reliable method is to use Mashvisor. You can conduct an investment property analysis with our Airbnb profit calculator and it will automatically set comparable rental income and rates. It’ll also include expected expenses so you have an accurate ROI calculation.
Related: The Best Ways to Increase Airbnb Rental Income
How much money will you actually be making with a vacation rental property? The best way to ensure a profitable investment is to invest intelligently from the very beginning. Our tools will help you find lucrative investments in just 15 minutes! All you need to do is just click a button.
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