Factors That Influence the Cost of Your Vacation Rental Property
Feb 11, 2020 | By: Soar Vacation Rental Services
If you’re considering purchasing a home or already have a vacation rental property in South Texas that you are interested in listing on Airbnb, Vrbo, Booking.com, etc., it’s important to know the affiliated pros and cons. Like any type of investment, you need to weigh the costs of managing and maintaining the property yourself versus having a vacation rental management company in South Texas, manage it for you. Here are some factors that will determine how much you can rent your property for.
Perhaps the most critical factor in any real estate venture is the location. Location is essential to guests even if they’re only going to be in your home a short while. Whether your renters are looking for somewhere quiet on the beach or lake to spend the majority of their vacation or, something close to all the action, location is key in helping them have the vacation they’ve been dreaming of or even the perfect business stay. It’s not worth it for most people to pay less for their rental and have to drive farther to the destinations they’re going to frequent, so rentals that are closer to attractions may not have much trouble charging a higher nightly rate simply because of the allure of the perfect location.
Comparable Vacation Rental Properties Nearby
Just as comps are used in the real estate business to determine a good asking price when listing a property for sale, comps can also be used to help vacation rental hosts set a competitive nightly rate. Comparing rentals nearby that are of similar sizes, age, and condition will give you a good idea of what the possibilities are. Check out the décor as well. The more updated and beautiful your home is, the more attention it will receive, especially if in a prime location. After pulling numerous homes and documenting nightly rates, (by season, if applicable), take an average of the nightly rate for those properties. That average will give you a good starting point. You’ll want to set a competitive rate and offer a few extras so that you provide the best experience at a competitive rate.
Extras and Upgrades
You may be able to charge on the higher side, with added amenities. Cable and Smart TV, Wi-Fi, a desk, hot tub, pool, game room or even a wagon full of beach/lake toys can be attractive to travelers looking for a home to rent. Upgraded and stylish homes with splashes of color and an applicable theme, photograph well and can have influence, especially through photographs. We find that many today would rather scan the high points, such as cost, location and take a close look at photographs before making their decision. You can have great listing information 5 paragraphs long, however; most will probably not take time to read it all. Remember the old saying; a picture is worth a thousand words! So, I guess 35 would be worth $35,000, or at least a new booking! Don’t forget to schedule your professional photography shoot. It is on one of the most important investments you can make, in getting your home ready for the rental market.
Seasonal Highs and Lows
Your rental rate will fluctuate throughout the year, along with seasonal highs and lows, in most areas. These rates reflect the property’s demand, so by lowering the rate in the off-season, you can keep drawing renters to your property instead of leaving your home vacant. If you are in a warm, coastal area, think about advertising to those looking to escape the cold for a few months. If you’re new to this process, it’s a good idea to research nearby properties to get an idea of what they’re charging during the low season.
Costs to Run Your Vacation Rental
In addition to considering factors that can boost your occupancy and make your property competitive, evaluate all the costs associated with running a vacation rental property so that you can plan and budget accordingly. You’ll want to calculate costs, (fixed and variable), such as the mortgage payment, homeowner’s insurance, taxes, lawn service, pest control, utilities, repairs, upgrades, etc. You should know what your annual costs are so that you can determine an accurate ROI
Contact Soar Vacation Rental Services, your South Texas vacation rental management partner today to learn more about owning and managing vacation rental properties in Galveston, Houston, Livingston and surrounding areas.