Macaulay Gidado | Monday, 24 August 2022
Booking channels like Airbnb, HomeAway, and Booking.com have drastically revamped what short-term rental represents. They transformed an unpredictable rental model into a lucrative unicorn for property owners willing to do what it takes.
The demand for short-term rentals is often thought to revolve only around tourists in search of amazing local experiences. Hence the Airbnb saying, “Stay in this or that location like a local.” But then, the market, as is now obvious, is much broader than just adventurous tourists.
The demand extends to digital nomads, contract workers, corporate tenants on temporary relocation. Potential real estate investors researching locations prior to buying. People visiting friends and family. Travel bloggers and vloggers. Family getting together. People that prefer a more homely experience than what’s attainable at a hotel. And so on.
On top of that, short-term rentals command about 30% higher rates than its long-term counterpart. Plus, there’s the convenient flexibility that comes with being able to shorten or extend contracts at your discretion. In other words, it’s up to owners to decide when they want to rent your property. Even how long they want to rent it for, and when to block bookings. It’s all up to owners under short-term renting. No more waiting weeks or months to regain control of your property after issuing out a quit notice.
Also, if you plan on renting yours for no more than 14 days in a year, you might qualify for a tax break. Of course, if you are looking to really make more money taking the short-term route, then renting for only 14 days in a year would be anticlimactic. Still, there are some owners out there that perhaps aren’t looking to rent consistently. Maybe you are going on a holiday. Perhaps you are having a void period after a long-term renter parked out. Maybe you need to keep the income flowing in while you look for another long-term renter.
Speaking of void periods, there was a time when the possibility of multiple void periods made owners shy away from short-term renting. But today, Airbnb, booking.com, and similar sites have made it so easy to find guests. Now any hardworking owner can easily avoid void periods. One way to do that is by listing on multiple channels and using a channel management software like Beds24 to automatically sync calendars from those channels and avoid overbooking.
We have worked with multiple owners at Helot. And the data we have so far suggests that just listing your property on Airbnb, booking.com, HomeAway, and TripAdvisor alone can push your occupancy rate to 95%. Of course with the right pricing strategy. Now imagine listing your property on more channels. There are dozens out there.
Still, truth be told. While vacation rental is a money-making beast of a market, it’s worth noting that, just like long-term rentals, the industry comes with its own hiccups. It’s not a bed of roses.
For more information on the things involved in setting up your property as a vacation rental home, please refer to our setup page. You can also check-out our housekeeping and hosting pages for info on housekeeping and hosting too.
In all, managing a vacation rental property, while very lucrative, isn’t for the faint of heart. It is a skilled practice. If you are going to self-manage yours, be careful not to underestimate the time commitment involved. When you don’t know how to go about setting up and managing your vacation rental business, always get help. A little help from an expert can make all the difference between a successful vacation rental business and failed attempt.
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