Are you thinking of renting out your place? Perhaps you’ve seen your neighbours build a new deck or extend their cottage and they tell you the rentals have paid for the improvements. Maybe you just don’t use it anywhere near the way you used to, but you don’t want to sell. Or you see it as a great investment to buy either an established rental or that great little place you just saw on MLS. There are myriad reasons for deciding to rent, but once you do, you enter a world of travel and tourism, hospitality and welcome, and above all, business.
It’s A Business
Yes, it is a small business whether you decide to rent for a few weeks of the year or have it listed year round. And thinking of it in business terms will help you make much more from it. The rental industry has changed a lot in the past decade. It has become more competitive as more owners see the benefits; guest expectations have changed, and accommodation standards have risen. The days of making a few bucks and expecting renters not to notice the mouse droppings or the old mattresses have gone. And if you are ready to embrace these changes there is a good income to be made.
Successful owners know exactly what their guests want, provide that and much more, and are rewarded with repeat guests and referrals to boost their occupancy.
So, what do you have to do?
Set a Realistic Rental Rate
It can be easy to rent in a market with high demand, however the challenge comes to find vacationers in the low seasons when supply is high and the competition is fierce. Understanding supply and demand in your area is the key to creating a balanced rate .
Research the competition thoroughly looking at the features and amenities being offered. Examine their availability calendars to see if the higher prices properties are being booked. Be realistic in what you charge, and offer value. Vacationers are savvy and will be doing their own research so will avoid any property that is over-priced and be wary of those that are significantly under-cutting. Appreciate seasonal variations in your area. Check the seasons that agencies are using as they know the market. Introducing ‘mid-season’ rates when no- one else is using them will impact your booking potential. Avoid complicated rate charts. Make it easy for a potential guest to calculate what they have to pay. Aim to include all extras in the published rate – adding extra fees for cleaning, or pets can lose you business.
Create an Appealing Space
The days of grandma’s old throw gracing a 20 yr old bed, with yard sale furniture filling the rooms are gone. Numerous TV make-over shows have shown what guests are now expecting. Light and bright spaces with attractive furnishings will always win out over dark, junky interiors; new and shiny appliances appeal more than the ‘vintage’ fridge and rusty stove. These three changes will help increase your booking rate:
- Critically Evaluate then Stage Every Space
Look at all your rooms from a guest perspective. Would they love to climb in that bed? Cook in the kitchen? Dine outside on the patio? Send photos to their friends and make them jealous? If your goal is to achieve maximum occupancy and great income, you need to do the work and create desirable accommodation.
- Get Professional Photography
Unless you are a great photographer, hire someone who is to take your photos. You could offer them a free weekend in exchange for them, but you may find it is not that expensive given what you could achieve in extra bookings. Great photos sell vacation rentals – it’s almost as simple as that. Almost…..
- Include the ‘Bells and Whistles’
Don’t be the judge of what you think your guests should do on your vacation. If you don’t watch TV, or always ‘unplug’ when you are on holiday, that’s great, but it could cost you a lot of business if you transfer that mindset to your guests. Give them what the stats tell us they want – high speed internet, satellite TV, updated entertainment systems, chef’s knives in the kitchen…you get the picture? Invest at the outset and you’ll be rewarded with raving fans.
Your prospective guests will be looking at lots of other listings, and making many enquiries. Mostly they will get canned responses, or no response at all, particularly if the period of rental is already booked. Your goal is to capture that interest, and maintain it, something that great marketers spend a lot of time on. Here’s some tried and trusted ways of doing this:
- Respond immediately We live in a society that demands immediate gratification and instant response. The most successful owners know this and have methods in place to alert them to an inquiry, and will respond immediately, either by email, text or phone call. Some will include a Frequently Asked Questions (FAQ) document that covers many of the questions or concerns a potential guest may have, and this serves to raise excitement and interest.
- Answer questions then engage You will need to answer every question that is posed in an enquiry, even if the information is on the listing. Then engage with them. Find out more about the potential guest, show interest in their vacation plans and if you can find some commonality between you, mention it. It could be the place they come from; their children’s ages; the breed of dog – in fact anything they tell you becomes your data to create a relationship.
Your vacation home can be a significant income generator if you go about it in the right way, set your income goals, and work to create the kind of location your guests will love.