If you own a vacation home that you only use infrequently, bought a retirement home early, or otherwise have a property in a desirable location that is often unoccupied, you should consider renting your vacation home. Renting out your vacation house requires maintenance and careful planning, but you can potentially make a ton of money off of a rental home, particularly if you price your rental rates competitively. However, first-time renters are often unsure of the best steps to take when renting out their property. Here are five expert tips for renting out your vacation home:
1. Watch the Calendar
A common pitfall for inexperienced renters is to fail to take vacation seasons into account. If you want to rent out your beach house, for example, but you spend lots of time there in the summer, you won’t be able to rent out your property during the summer, which is the peak time for beach vacations. A good general rule is that you can usually price a weeklong rental during peak seasons as you would a full months’ rental during the off-seasons (i.e., if you charge 5,000 a week for your beach house in the summer, you can charge around 5,000 a month in the winter). Because of seasonal travel variations, it may not be a wise investment to rent out your vacation home if you usually stay there during peak seasons.
2. Budget Carefully
The best way to craft a budget for renting your vacation home is to create a spreadsheet and compare costs of renting your home to the profits you can expect to make. When considering expenses on your end, be sure to include insurance and yearly taxes as well as basic maintenances, repairs and utility costs. In addition, it’s wise to assume that you’ll incur more repair costs than expected when budgeting. If the financial predictions suggests you may make only a small profit or barely break even, then renting your vacation home probably isn’t worth the stress.
3. Consider Hiring a Rental Management Company
If you’re looking for the maximum possible profits, those will come from managing the rental property yourself, but it also means a lot of work on your part. Rental management companies like Airbnb or HomeAway will take care of online booking, calendars, questions from customers and other communications, but you’ll of course have to pay for their services. But if you have a busy work schedule or else expect to have little free time, hiring a management company might be the wisest choice.
4. Attract Customers with Amenities
Rental properties are a competitive market, and because of this, customers have come to expect a variety of amenities in quality rental homes. If your home doesn’t have comfortable beds, plenty of bathrooms and visually appealing furniture, you’re much less likely to attract customers. It’s also a good idea to provide plenty of entertainment options such as HD TVs with cable and premium networks, video game consoles, or equipment for outdoor sports and activities. Even if this means paying for features that your vacation home doesn’t currently have, the upgrades will pay for themselves if they catch the eye of potential customers.
5. Set Rental Rates Carefully
The best way to decide how much you’ll charge for the rental of your vacation home is to keep your prices competitive while still charging enough to ensure you make a profit. Check the rates charged by competitors (i.e., other renters in your area), as well as average rates for vacation homes in the area to keep your prices competitive enough to attract customers. Once you’ve calculated your expenses for maintenance, upkeep, etc., you can also factor in how much you need to make to turn a profit and how many weeks per year you’ll be renting. As long as you can keep your prices reasonably competitive while still making a profit, you can rent out your vacation home with confidence.