If you are looking to invest in a vacation rental property to diversify your portfolio and earn you extra income, it is important that you are prepared fully on how to manage and rent out your vacation property, so it can be a highly successful vacation rental business for you. The vacation rental industry is competitive; being well-informed is critical to compete.
Before buying holiday homes and hoping to rent them out, there are several aspects to research and business activities to conduct.
An obvious first step is to look into financing options, determining what levels of risk you are comfortable with, and examining your personal finances.
At this stage, it is also good to determine whether you are interested in a property strictly for extra money generation, or if you also want to use it as a lifestyle investment - as a place to use for your own vacations and family time. Research and consider, too, if you are looking for a short-term rental business, which is most common for a vacation home, or if you would consider a more long-term rental.
A key first decision is the planned location of vacation rental or vacation rentals. A highly-desirable location is essential to attract renters to your vacation home. If you live in a tourist area, this can make buying a property close to you a possibility, but for many people, this may mean looking further afield.
It also raises the question of whether you can manage your vacation rental yourself. Self management is a significant commitment, even when the property is close, but to manage a vacation rental remotely is extremely difficult, since you are not there to respond to any situations that arise.
Make sure to research and understand the implications of regulations and taxes for the location you are looking at purchasing a property listing in. Some places have additional taxes for foreign investors or those with multiple properties, while others do not.
You will need to consider how you plan on handling the booking process; whether you will handle direct bookings, whether to invest in vacation rental management software, or go through a third party system. Be sure to consider whether you can still manage this once you start to get more bookings, and how you will handle any changes, cancellations, and other activities. You may wish to set up your own website, but if this is not done well, it can put off potential guests.
You need to be able to respond quickly to questions and guest messages, requests to book, and changes, every day of the week, and for extended hours. Online platforms will work for many of the interactions, but many guests still prefer to be able to call.
Be sure to read and respond to all reviews - even the positive reviews. You can learn from all of them, to know what you are doing right, or what could be improved, and it gives you the chance to make another personal connection with guests. This can help keep the guests coming back.
Some new vacation property owners believe they can handle the cleaning and general maintenance themselves, but this is a major job, and needs to be done well; if cleaning and maintenance is not to a high standard, it will ruin the guest experience and be reflected in the guest reviews.
In addition to regular maintenance, be sure to have plans in place for any emergency repairs if needed; having a relationship with a company to handle something urgent before it happens is essential to a timely response.
An essential part of managing vacation rentals is security, whether you have purchased your first property for rental, or bought additional properties to add to your investment opportunities. Burglar alarms are a must. Smart locks and other smart technology can make security simpler for when a guest checks in, and can even help the check out process since there are no physical keys to be lost. It also helps if you are trying to manage a vacation rental remotely.
Make sure you have anticipated all of the needs for a comfortable stay (without being wasteful). Automated systems, such as smart thermostats, keep the property comfortable without wasting energy. Also consider bed and bath linens, and all of the other items expected for a stay - and know that the quality of all of these will make a big impression.
This is a big component of your vacation rental business, but it is one that many new investors do not do adequately. To get new guests, you need to get the word out. Develop your personal brand, and understand what exactly you are offering, to be able to reach the right people who would be interested.
Hiring a vacation rental property manager can simplify your worries greatly. Having a property manager means there is someone on hand for local maintenance, and to deal with any emergency or urgent situations, without you having to rush over, which may not always be possible.
You also benefit from the experience and expertise of a property manager, who will know what to expect and how to handle all of the circumstances that may arise. You can benefit from being vacation rental owners, without the stress and hassle. You will have to factor in the cost of management fees, but especially if the management company has other properties nearby, these fees can be more affordable, and cheaper than you attempting to learn through trial and error if you do not already have this type of experience.
Property management companies can handle everything from cleaning and maintenance, to advertising and promotion.
Kokomo Botanical Resort offers lifestyle investments in Turks and Caicos, with luxury resort-style cottages, allowing investors to have the advantage of a beautiful property they can visit themselves for a vacation at any time. It also offers the benefits of vacation rental property ownership without the stress and time consuming aspects of managing a vacation rental. Kokomo Botanical Resort handles the role of a vacation rental management company when a cottage is not in use.