All around the world, people have jumped into the often lucrative world of vacation rentals, turning their holiday properties or second homes into getaway spots for couples, groups and families. Today, the vacation rental market makes billions of dollars annually for owners around the world providing comfortable alternatives to resorts and hotels.
If you have a second property that you feel would make a great vacation rental and you’re interested in making some money, it’s typically not a complicated process. Though every home is unique and covering every possible situation is beyond the scope of this article, there are a few basic steps to follow before you can begin renting out your beachfront cottage, lakeside cabin or holiday home.
- Be Realistic
Before you start converting your second property into a vacation home, ask yourself some realistic questions about whether or not this will be a profitable venture for you. Profitability is obviously easier in a popular destination such as Cape Cod or a condo near Disney World, but not every property is located in such a popular area.
First, is your home is in or near a popular tourist destination? Does it have amenities that would make it attractive to visitors, such as access to a pool, lake, view, hot tub or tennis courts? Go online and do a little research on your area to check both popularity and competition. Multiple rental listings can indicate a good market for renting vacation properties, but it also means visitors have plenty of options, so check what other vacation rentals are offering and be honest about whether you think your home will be attractive to vacationers.
- Stock and Update
If you’ve decided that your property will make an appealing vacation rental, now it’s time to give it a critical once over. Not all vacation rentals need to have the latest of everything, but everything needs to be in working order. There are amenities that vacationers have come to expect, including a full kitchen with microwave, wireless Internet, and an entertainment system.
Walk through your property and make a list of everything that needs fixing, painting, updating, decorating or changing. A little investment into a flat screen TV, Blu-Ray player, chairs for the patio or new paint job for the kitchen cabinets can make a world of difference in attracting renters. Be sure to walk around your property as well. Hiring a landscaping company for periodic maintenance is also a great idea.
You will also need to make sure that your rental property has all the basics on hand, including full bedroom and bathroom linens, a full set of dishes, pots, pans and cutlery, and cleaning needs such as dish and laundry soap.
- Do It Yourself or Hire a Property Manager?
Now, it’s time to decide if you want to manage your property on your own or if you want to hire a rental company. If you go with rental brokers or managers, they will take care of all your accounting, advertising, and the regular upkeep of the property. Of course, this comes at a cost, which is most often a percentage of your rental profit. The main determining factors of whether you do it yourself or hire a manager are how much time you have on your hands, whether you live close to the rental property to oversee any problems, and how much control you wish to have.
- Hire a Housekeeping Service
To rent consistently, you need a good, local, housekeeping service that will clean the property when your guests leave. It is possible to do it yourself, but if your property is successful this will be quite a chore. Look for a good housekeeper now, and save yourself the hassle. Many vacation properties include a housekeeping fee in their rental prices to offset the cost.
- Access to the Rental Property
How are your guests going to access your rental property when they arrive? If you choose to hire a rental broker or management company, they will take care of this detail. If you don’t have a property manager, most owners find it easiest and most secure to set up a lockbox or keyless lock, from your hardware store. Then you can simply provide your renters with the combination.
- Guest Instructions
You need to prepare an instruction sheet for your guests, outlining house rules such as where they should dispose of garbage, where they need to leave the keys when they leave, and any community or housing complex rules and restrictions (such as no loud music after 11pm). The instructions should list all local emergency numbers, poison control centers, local police and fire department, and a phone number for reaching you or your property manager in case of emergency.
Many vacation property owners also provide local tourist information and brochures, which can be picked up for free from your city’s local tourism office or chamber of commerce. Visitors will really love if you include personal tips, recommendations and suggestions of best restaurants, places to go and attractions to see. That personal, local advice is priceless to people that are not as familiar to the area and simply want the best experience.
- Accounting & Other Legalities
It is now time to set your price for renting. Look at comparable properties in your area and set a price for nightly rentals, weekend rentals, by the week, or long term. Will you offer discounts in certain seasons or for longer rentals? Set up a separate bank account to handle just the profits and expenses from your rental property and be sure to look into what you need to claim on your taxes.
You also need to check your property insurance to make sure you are covered for renters, and you need to check with your local by-laws to make sure you comply with all the legalities in your area. You may need to apply for local permits, and you may need to arrange for an inspection.
- Listing Your Property
There are plenty of excellent websites that can list your vacation property, giving you access to millions of travelers. To make sure your property shows best, it is best to take good, high-quality photos of the property, making sure that you get images of every room. Stage your photos to make sure that you are highlighting your home’s very best. It is also a good idea to take pictures of any unique features like views, relaxing patios or comfortable yards. If you aren’t confident in your camera or ability to take good photos, consider hiring a local photographer, as these photos will really make your vacation property more appealing.
You will also need to write a nice piece of sales copy about your property for your online listing and advertising. List all your amenities—how many bedrooms, bathrooms, benefits and nearby tourist attractions. Check and double check for spelling or grammar errors.
- The Rental Agreement
Finally, you will need to draft a rental agreement that lays out the specific terms, taxes and policies with regard to your property. The agreement will also outline the deposit you require, housekeeping arrangements and cancellation policies. There are many drafts of rental agreements available online, but it is smart to consult a lawyer to draft the final document so you are confident that you have covered everything and are in good standing. You will send this rental agreement to all of your renters when you arrange for their booking.
Now you are armed with a good overview of where to start when listing your property. Time to start doing some heavy thinking and planning to see if renting your vacation home is in your future plans!