A lot of people go into the vacation rental business thinking that it is going to be a relaxing way to make a healthy income, usually either in retirement or outside of their primary vocation. Well, it may be relaxing for the people who vacation at your property, but for the business owner, however, there can definitely be some headaches if it is not done right.
Still, running a vacation rental business can certainly be both profitable and enjoyable. Just make sure you take advantage of these 5 tips for running your vacation business profitably and successfully.
Budget Your Time
How hands on are you planning to be with your rental property? Are you planning on saving yourself money on a cleaning service or management staff by doing those chores yourself? You may think you are saving yourself money, but as they say money is time and if you are spending a lot of it servicing the property while you could be making money doing something else, you might just be buying yourself a big headache.
Decide ahead of time whether or not it is worth it to you to manage and service the property yourself, or if it would be better to hire a third party cleaner or manager. It may cut into your bottom line a little, but budget your finances appropriately and it should work out for the best.
Be Clear on the Risks
Hopefully you don’t have to discover this the hard way, but there are all sorts of ways to lose money running a vacation rental. Forgoing protection against liability for property damage, not marketing effectively enough to get customers through the door, not foreseeing the true cost of maintenance expenses, possible break ins and theft…all of these things and more can go wrong if your game plan for what you want to do, what might be an obstacle and how you are going to deal with it, isn’t thought out and strong.
So make sure that you all of your cover bases. See that your contracts spell out very clearly what occupants are responsible for and what you are responsible for, who is liable for what, know what your maintenance costs are, your insurance costs, home security, your furnishing costs, and keep everything under budget. Stay on top of the operation, and risk management will be taken care of.
Anticipate Your Customers Needs
In the hospitality industry, having repeat customers is a tremendous part of ongoing success. So from a purely practical standpoint, you want to make sure that customers have a really great time whenever they come. A great vacation rental business owner will go out of her or his way to try and anticipate what her or his customers will need and what will make their stay more enjoyable.
This could be little things like keeping water and popular snacks stocked in the kitchen and refrigerator (perhaps more hot teas and hot cocoa for colder weather locations), having local magazine laid out with information about the sights and scenes to be enjoyed in the local area, and probably some type of cable, dish and/or Wi-Fi or internet service they can plug into. A good place to start is by asking yourself what things you enjoy about staying at a vacation destination, and try and make those types of amenities available to your customers as well.
Study Customer Reviews
It is important to be educated about your property and the area that it is in, but it is also essential to be educated about your potential customers. Of course, you’re not going to run a background check on everybody who expresses an interest in possible renting your place, but you can study consumer reviews of other vacation properties like yours to see what it is that customers generally like and don’t like about the places they are staying. Many vacation business owners don’t do this, but it is a great way to give your business an edge on the competition.
Keep Up with the Market
Along those same lines, you want to stay abreast of changes taking place in the marketplace and know the things that customers come to prefer and expect as times change. These days a lot of people are taking advantage of AirBnB locations. Perhaps you want to have that type of setup yourself. If not, how should you compete with it? Remain a student of what makes a business like yours work, and odds are that yours always will.