By George Wentworth
There are many advantages for setting up a short-term rental property versus using the traditional long-term rental model, as the short-term rentals offer the potential for higher profits and the ability to use your real-estate asset whenever you decide it's available. For example, under the long-term approach, you can purchase a two-family house in the center of town, and rent each unit for $1,500 per month, for a total of $3,000. Or, for the same purchase price, you can buy a beachfront condo and rent it for an average of $250 per night for 20 days per month and bring in $5,000. That’s a potential $2,000 per month increase in profit, while still retaining the ability to use the asset. This is why short-term rentals are quickly becoming the new investment trend.
If you are thinking of becoming a short-term rental host, but aren't sure where to begin, take a look at The Outbounds. Our experience in real estate and short-term rentals enables us to analyze the strengths and weaknesses of your home, and design an experience for your future guests to enjoy. The Outbounds model helps your home stand out from the crowd and get the recognition and bookings it deserves.
If you are thinking of investing, here are 5 things to consider:
This is very useful if you are purchasing or leasing a property, when you identify the cost of maintaining the property and the minimum amount you need to make on rental for it to "carry" itself. Look at similar properties on a few different booking platforms to get an average rate for all four seasons of the year. A good rule of thumb is to be able to cover all your expenses with no more than two weekends per month worth of rentals.
You must get proper short term rental insurance for your property. Not only this is a legal requirement in many areas where you might choose to start this business, it will also give you and your guests peace of mind, knowing that if the unthinkable happens, you will be taken care of. Generally, the cost of this type of insurance, when divided by the number of rentals throughout the year, is very low.
Create accounts and list your property on multiple platforms; you should not create a business dependent on any one booking platform. Your listing should have a compelling description of the space and list all of its amenities, focusing on what guests like and want, and you should have plenty of pictures of the property. If you are not well versed on how to take good real estate pictures, it is worth investing in a professional photographer, they can also help with staging and lighting. Be proud of your investment and show it off.
Make sure you spend enough thought and money on amenities that will please most guests, such as creating a local guide book with restaurants and shopping recommendations, offering a coffee maker along with providing them with good quality coffee, and equipping each bedroom with comfortable bedding. Unless your listing prides itself in being off the grid, reliable WiFi service is a must. In an era where people work remotely, you should offer one or multiple locations where guests can set up their laptops and work; a nice added touch is good lighting for video calls.
It all starts with good communication. Reach out to guests prior to their check in to ask if they have any questions about the area or the property itself; make the check in process easy, invest in smart locks and a video conferencing system, so you can greet guests from anywhere, at any time. Keep in mind that while most guests are nice, many others won’t appreciate your property as much. Don't worry about it. You can't please everyone. What you can do is manage their expectations and at least listen to their complaints. Take it seriously when multiple guests make the same friendly suggestions. Be mindful that with short-term rentals, you are more likely to need to interact with guests more often than with long-term rentals. Beyond the check in and check out process, your guests will need to know more about the property, the area, and any amenities you might offer.
At the Outbounds, we pride ourselves in offering excellent service to our guests, and we think of the property owners that work with us as our business partners – we work with hosts at every step of the process, from property selection and profit projection, to setting up the units and advertising, to guest scheduling and communications. If that sounds like something that can work for you, reach out to us for a consultation.