So you’ve decided to buy a place and plan to rent it out to make some short-term rental income. Smart move. Real estate that gives you consistent top-dollar rental income will pay for itself… and then deliver pure profit.
But how do you ensure that you’ll make the maximum rental income possible? That’s what I aim to show you. Follow these essential steps and you will absolutely increase your short-term rental income.
Hands-on… or Not?
First things first: Decide how much work you’re willing to put in. If you buy where there’s no established rental market, be prepared to be a lot more hands-on. If you don’t want to be hands-on, find a place with an established and hopping rental market (like Tulum, for example), where you can be less involved.
In places where there’s a lot of tourist activity, it’s easier to find renters for your place — and a quality rental manager who will do most of the work for you, from finding renters to paying the bills to taking care of the cleaning and checking guests in and out.
Give People What They Want
Once you decide how much work you want to put in, start with the basics… Things like making sure the furnishings are clean and plush and match each other… that there’s potable water even if you have to provide bottled… that the beds are large with comfortable sheets, pillows and blankets… and that you have more than enough pots, pans, utensils and dishes in the kitchen.
Scratchy comforters… cheap sheets… dirty bathrooms — I’ve experienced all these and worse on the road. Get the basics right and you’ll be head and shoulders above the competition.
Add the Extra Touches
Thinking of your guests’ comfort will set you apart. Some places I’ve stayed in have left a basket of goodies. Think: a bag of coffee, local snacks, wine or beer, passes or discounts to local attractions, possibly sunscreen. Even if your guests don’t use the goodies, they’ll feel welcomed by the gesture.
Other things you can offer are boogie boards or snorkels, bicycles, a selection of books or DVDs — or even just a full ice tray when they arrive.
Be Their Guide
Take the time to write out a guide to the home and surrounding area. Make sure to include practical details (such as whether there is a cleaning service, how to operate the washer/dryer, where to find fresh linens and leave out trash, etc.) as well as some more personal recommendations.
I’ve stayed in places where the owner left detailed descriptions of things to do close by, where they like to eat, what you can expect to pay for things and what taxi company they use for good service. Pinpointing the best attractions and hippest restaurants will help your guests relax, settle in and want to come back.
Ask for Feedback
After all that, remember to solicit reviews from your renters with a well-timed email after their stay. Good reviews can bump up your listing in online rankings and encourage more people to book your place. One survey by an online marketing company found that 88% of consumers trust an online recommendation as much as they would a personal one.
Don’t Rest on Your Laurels
Even if you want to be largely hands-off, you’ll still benefit from putting in some effort to attract more renters to your place. One guy I know who’s doing particularly well from his rental is using a rental manager — but he’s going the extra mile to supplement that manager’s efforts.
He prints tear-sheet fliers (the type where you rip off a strip of paper with a phone number or email on it) and asks local restaurants in his hometown in Canada to put them up. He adds a special code so he knows which restaurant new bookings come from and pays them a little fee. He often gets renters his rental manager might not have found.
Setting out Your Stall Online
Folks used to go to a travel agent to book their vacation. Now, increasingly, people use the internet to find everything they need for a getaway — including accommodation.
The internet is now your online stall for your rental home… You need to optimize your online presence to attract more renters — whether you’re using short-term rental sites such as Airbnb or Vrbo, hotel and accommodation sites such as Booking.com, your own bespoke website or a mix of all the above.
Take Good Pictures
There are a whole host of studies out there that show people pay far more attention to advertisements with clear, helpful images than ones without. So if you’re skimping on photography, you’re losing renters.
Take photos that flatter your rental without being misleading. That means taking pictures of the interior (including clean, tidy bedrooms, sitting areas, etc.), any outside space such as terraces or gardens (also clean and tidy) and any beautiful nearby spots. It is incredible to me how many renters with a beach on their doorstep neglect to put a single snapshot of the sand or sea up.
Consider hiring a professional photographer. It could be a smart investment. Airbnb found that listings with professional photographs perform TWICE as well as listings that don’t use professional shots.
Highlight the Location
Ask yourself who would find your place a good base. If there’s a conference center nearby, for example, mention it in your listing. If it’s a foodie destination, say so, and list where to go to sample the best food. Near some historic ruins or an expensive ski resort? Tell people.
Additionally, make sure your address and location are as clear as they can be. If you have the option, add a map or geotag your home on an online map.
Add Some Information About You
People still trust a face over an anonymous listing. If you have the option to add a picture of you and a short, friendly blurb, do so. If you’re using a rental manager, make sure they do it instead.
Choose the Right Keywords and Descriptions
Keywords are the words search engines (like Google) and websites use to categorize information. When you are writing up a description of your place, make sure to include keywords people might be searching for.
Think about what people will search for to find a place like yours and use those phrases and words in your description. This will help you rank higher in search engine results.
Additional Quick Tips for Success
Know your renters and use different websites to attract them. If your renters are Scandinavian, Mexican, American, British, Irish, etc., seek out the websites they’ll use and post your rental there.
Know the holidays and raise your nightly rate as demand increases. Don’t focus on just the U.S. or Canadian ones. Being aware of both local holidays and the holidays of your potential visitors is key for getting your pricing right.
Lastly, think about what currency you advertise in. One contact rents out his Spanish home on a lot of short-term rental sites. By switching to advertising in sterling when the exchange rate is favorable, he makes more than if he advertises in euro.
Wishing you good real estate investing,