Purchasing a rental property is a significant investment and can be the start of a scary but rewarding adventure for many. We have spoken with thousands of vacation rental owners across the United States and across the globe, and we've noticed several common themes and mistakes from owners about their rental experiences.
Here are five of the biggest mistakes made by vacation rental owners and our tips and advice on what can be done to maximize rental income, minimize expenses and make the experience a positive one:
The wrong rental solution.
Choosing a property manager is probably the single most important decision you’ll make regarding your home, after its purchase of course. Your choice of property manager can affect your rental income and how well your home is taken care of, which makes choosing the right one crucial. A great property manager knows how to advertise your home, can take care of your guests during their stay and take care of your property and keep it in top shape while you’re away. The wrong property manager will fill your home with discount bookings, increasing the wear and tear on your property while your profit margin takes a serious hit in the process. So, do your research. Most property managers only charge a small monthly fee and/or a commission of the rental income they bring in from your property.
Failing to go above and beyond.
The key to great rental income is in repeat guests, and delivering an experience which renters will want to tell their friends about. The way to achieve both is to go above and beyond the competition. Whether that’s through services, features or facilities, it’s important to provide an, if not luxurious, comfortable and stress-free experience to your guests. There are no excuses for old, stained mattresses, outdated furniture, decade old televisions or broken appliances. The vacation rental industry is consumer driven and rapidly achieving main stream status as a top choice for vacationers, and it’s crucial to be on the cutting edge, rather than in the bargain basement. What’s more is that if you hire a property manager to rent out your home, your guests can even enjoy hotel-like conveniences like concierge services and vacation planning. Something to think about.
This is one of the easiest to remedy AND one of the most common mistakes new vacation rental owners make. It’s important to remember that potential renters literally have millions of properties to choose from and pictures are indispensable as a means of convincing renters to choose your property over another. That means no iPhone photos and no budget digital camera photos. Your properties photos should be crisp, clear and comprehensive, showcasing all aspects of your property, from the nice upgraded game room to the half bathroom off the living area. It’s all important, because guests want to know exactly what to expect and what they’re paying for. A professional photographer is an excellent option, and won’t cost you much in the long run if you have your property re-shot every couple of years.
Pricing too low…or too high.
Pricing too high is a good way to niche yourself out of business and to ensure you never get the booking volume you seek. But pricing too low devalues your property and attracts irresponsible renters. This can easily be one of the more disastrous mistakes new vacation rental owners make. So, what to do? Find the middle ground. Property managers normally evaluate the competition, scouring listing sites and local rental directories to find the sweet spot price that will get you the highest profit margin while maintaining a healthy stream of bookings.
Selling instead of helping.
When you own a vacation rental, it’s important to remember that you’re a small fish in a big sea. Competition for rental guests is fierce, with tens of thousands of vacation rentals in the Disney area alone. Pitches, deals and promotions can get old fast, but if you make an effort to help your potential guests, you stand out from the crowd. The best vacation rental managers will incorporate social media and blogging as part of their marketing strategy. Blogs can be about family travel tips, local events or an area’s “hidden gems,” and these blog posts can be shared on popular social media sites. All of this adds up to valuable content reaching your potential renters, which helps them trust you and provides something of real value to the consumer, which turns into value for you later on.