10 Steps to Becoming an Independent Vacation Rental Owner
What better time to think about joining the ‘revolution’ in hospitality and becoming an independent vacation rental owner?
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Independence Day, July 4 – what better time to think about joining the ‘revolution’ in hospitality and becoming an independent vacation rental owner? And to help you keep a cool head in these exciting times, here are our top 10 tips.
1. Ask yourself: why am I doing this?
Is it a long term dream to have your own vacation property? Do you see becoming an independent vacation rental owner as a business proposition? Are you looking to subsidize your own vacations? Is it a mix of these things? Whatever your approach, choose a property that fits with your specific aims.
2. Decide on a budget – and stick to it.
Take a realistic, non-sentimental view of potential vacation rental properties. Remember this is not the main family home you are buying. If you’re stretched when you buy it, how will you handle the unknowns down the road when you start renting out? When you’re up and running, Homes and Rooms has powerful, easy to use software tools you can use to track and compare your vacation rental’s performance and stay on course.
3. Choose your location with care.
Get this wrong and you’ll have to work hard to fill out your reservations. Select your property with an eye firmly on guest appeal and bookings. Research the area you’ve chosen. Familiarize yourself with its appeal and attractions. Browse the local vacation rental offers as though you were a guest checking price and availability throughout the year. This is invaluable when setting up.
4. Decide on a target demographic.
Who will you be catering for? A vacation rental cannot be all things to all people so if you’re hoping to attract families, make it a family home. If you’re after older, upscale couples, consider more sophisticated locations.
5. Try before you buy – rent in your chosen area.
This is a great way to get to know the area in which you’re planning to buy. You will be seeing it from the guests’ point of view. This helps you find the pitfalls and drawbacks of your chosen areas as well discovering and confirming its attractions and high spots.
6. Research the true costs – be hard on yourself.
Play devil’s advocate and work out the realistic cost of running your vacation rental property. Allow 1.5% of the property value per year for maintenance and repair. Yes, 1.5%.
7. Estimate rental income – with caution.
Don’t rely on top-of-the-head figures. Research the local market, estimate accordingly – then reduce the figure to allow for unforeseen circumstances. That way you might just come out on top!
8. Prepare to be taxed!
Welcome to a whole new area of tax you’ll have to pay and legislation you’ll need to abide by. Your home will never have been this safe! Paying the taxes is bad enough, but remember that you have to collect them too. Fortunately for our subscribers there’s a clever little widget that sorts this all out for you so that charging guest taxes is automatic once it’s been set up.
9. Think about the time and energy you will need
You need to think about the time and energy you will need to manage your vacation rental property and be able to compete with the big online travel agents. As an independent on your own this may seem daunting, but help is at hand. Homes and Rooms was specifically set up to provide the back-up services needed to support independent vacation rental owners. We’ve been there – and now we do it for other owners, helping them maximize their reservations and revenues, while minimizing the time and effort they need to spend.
10. Make sure you will use your property for vacations!
If not, consider instead putting your money into stocks and shares and pay to spend your vacations in someone else’s idea of a dream vacation rental.