- This is because people will often want to try to bring in extra income by using their primary or secondary residence is a vacation rental. While this can be a great opportunity to make extra money, it's not without its challenges. For example, vacation rentals often times fluctuate greatly depending on the time of year it is. With vacation rentals you normally will see your peak season, as well as your off-season. The fluctuations in seasons can make it difficult to meet a mortgage payment or other financial obligations. So, as one who rents out vacation homes, how can you balance out the highs and lows that come with the seasons? Well, in this article we will give you 4 tips on how to better find balance within the fluctuating seasons.
- The first thing that you can do is consider a fixed rate contract. Essentially, what a fixed rate contract is, you work with a vacation rental manager who pays you a consistent dollar figure, as opposed to the variable amount that you receive when renting out a house yourself. This option is often very attractive as it gives you a fixed amount of income and cash flow they you'll receive every month. These types of contracts are perfect for financing your first investment property as it can lead into an opportunity for you to be able to invest into a secondary vacation rental. Plus, you can use your fixed rent property as proof of income when you apply for your bank loan.
The second thing that you can do to help balance out the fluctuating rental seasons is by diversifying your investment portfolio. You can do this by having vacation rental homes in different seasonal markets. What this will do for you is that it will allow you to bring in consistant income because while one market has its off-season, your other property will be having its peak season. This rental diversity will allow you to shed the burden of not having consistent income.
- Not only can you focus on different seasonal markets, but you can also focus on different logistical destinations. For example, you could have a drive-to vacation rental and a fly-to vacation rental. By having a drive-to vacation rental you can appeal to the more spontaneous vacation goer, as opposed to having a fly-to vacation home where you will appeal to the planner. By having both of these types of rental homes, you can further diversify your portfolio, thus appealing to a mass demographic.
The third thing you can do is position yourself to take advantage of peak seasons. By this we mean that when you are looking at buying a home, try to buy one that is about 6 months out from its peak season. This will give you enough time to do your homework and talk to local managers. As well as give you time to buy the property and make any necessary improvements that you will need to make it rental ready. Plus, this will give you time to set up your marketing strategy as well as give renters time to find your listing.
- Ways that you can help boost your listing are by having professional quality photos, as well as taking advantage of tools such as real estate virtual tours. Real estate virtual tours allow a renter to take a tour of the property via the Internet. This is extremely attractive, especially to the planner, as real estate virtual tours allows the renter to see exactly what they are getting and all the amenities your home has to offer.
Finally, you can take advantage of any updates or upgrades that will give you more bang for your buck. For instance, think about adding in certain amenities that will help make your rental more attractive to renters. For example, if you have a rental in a cold location, you could include amenities such as a hot tab for your renters to warm themselves on cold snowy night. Or stock the home with a lot of inside entertainment such as a Ping-Pong table, air hockey table, a fireplace, a theater room, etc. As opposed to a warm location where you may want a pool, an outdoor fire pit, a volleyball net in the backyard, etc. Also, be thinking of how you can make families more comfortable by providing extra space with things such as sleeper sofas, and providing as many bedrooms as possible.
- Renting vacation homes is not always easy, but it doesn't have to be impossible. By being prepared and understanding your market, you can better balance out the fluctuating seasons that come with vacation rentals. We encourage you to follow these tips and do your own research to best set yourself up for success. Happy renting!