How Does a Vacation Property Fit Into Your Portfolio?
By Jason Witzell
Vacation rental properties are becoming increasingly popular for both renters looking to get away for a short vacation, and investors who are looking for ROI (with the added bonus of having your own getaway).
It’s why platforms like Airbnb and VRBO have grown exponentially over the last decade.
Fellow Keyspire Success Coach Judi Paré and I hosted an Income Property Labs training session on Vacation Properties. These were some of the major takeaways:
Geo-Demand
• Demand of your property and can change based on time or year. For e.g., mountain towns have a high demand in the winter and beach cities have a higher demand in the summer.
• Some cities have major events which creates a high geographical demand. Check your local calendar for events and attractions.
• You can set lower prices during the low season; this allows for a little bit of income versus no income. Conversely, rent prices should be raised during high seasons to increase your profits when demand outweighs the short-term supply.
Occupancy
• Offer more sleeping accommodations to increase your nightly rate.
• When travellers are considering a vacation home rental as opposed to a hotel stay, they often do a person/cost comparison.
• Increasing the occupancy is a major contributor to higher demand for vacation home rentals.
• You can increase sleeping accommodations by adding simple items such as bunk beds, soft beds, etc.
Amenities
• Amenities are added value that help in attracting renters.
• If you make your vacation home child friendly with cribs, highchairs and toys, it helps attract families to your property.
• The cost spent in amenities adds to your revenue. The goal is making a vacation home feel like a luxury getaway. Be creative and think of things families and groups of people would like on a vacation property and add them!
• Travellers are looking for features like hot tubs, pool tables, bicycles, hammocks, fire pits, and wi-fi.
Location
• Homes located in a downtown area are able to command a much higher revenue than homes located in the more rural areas.
• A property with an exceptional view will be able to charge a premium.
• Simply compare your homes advantages and limitations compared to other properties in the area. Each vacation rental home market has its own unique situations, comparable pricing is the best approach to take.
This was such a hot topic, we returned for a mini-encore to answer additional questions.
Check out this short recording to get answers to the following:
• Do you take a damage deposit?
• Do you charge a rental fee for use of canoes, kayaks, motorized boats, etc.?
• Are there liabilities for allowing guests to use motorized vehicles?
• Is tax charged to each booking?
• What are some websites to advertise the vacation rental?
• What are some pros of vacation rentals?
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About the Author
Jason Witzell
Keyspire Success Coach, Jason Witzell, has been a real estate investor for over 20 years and is a Licensed Realtor in the Kitchener—Waterloo Region. His real estate investing portfolio has included student rentals, condos, multi-units, vacation properties, and private lending.
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