Why Invest?

A vacation rental offers much versatility  for  an  investor.   It  is  a  fantastic  choice  to  dip  your  toes  into  the  real  estate  market, particularly when you want to expand your portfolio. From a condo to a three-bedroom house, a vacation rental  can  be  profitable with any type of property you choose to invest in. Since higher fees can be charged and there is a regular turnover of guests,  it can also earn an income greater than a long-term tenancy over time. Certainly, this is a growing sector  thanks  to  websites  like  Airbnb and VRBO, making bookings easier than ever. Still, to be successful, you must have a plan of action to maximize  profits  and  secure clients.

Know Your Requirements

As a start, you must know what your requirements are  going to be. These are not limited to tax liabilities alone, as  you will likely also have to apply for a permit  to  run  a  short-term  rental. To avoid any surprises, do your research and know exactly what to expect to hit the ground running.  Similarly,  ask  yourself  if you will have the time to clean and  maintain  your  property.   If not, research  what  interior  cleaning  services  are  available  to you (the cost of hiring a cleaning company  averages  between $100 and $300). Any successful business needs  good  planning,  and that can save you money, too.

Form Your Business Entity

Many real-estate investors choose to establish themselves as a limited liability company to  protect  their  personal  assets from any litigation. To file an LLC, you can  hire  an  attorney,  but  it’s  much  cheaper  and  quicker  to use  online  formation  services.  These services  can  inform  you  on how to create an LLC in addition to explaining its benefits and how an LLC differs from other business structures.

Make Adjustments

Like a standard  rental,  a  vacation  property  can  benefit  from minor  enhancements  that  might  also  boost  its  value  in  the long-term. If you're unsure where to start, focus on sprucing up the rooms and transforming the outside. Yes, guests  will spend a lot of their time indoors, but a property with poor curb appeal isn't likely to make a strong first impression.  So, give everything a fresh coat of paint, replace anything that looks worn, and add extra color with flowerbeds. 

Likewise, make subtle upgrades to the inside by, for example, installing new fixtures or putting in fresh caulking. If you don't have the  time  or  experience,   a  local  handyman  could  be  brought in to get the job done quickly (expect to pay $30 - $50 an hour for these services). Your property doesn't need a major transformation to be attractive to renters.

Have Amenities

No rental is complete without a range of amenities to create a home away from home. They might be basics, like a selection of toiletries and towels, but don't overlook other essentials of modern life.  After all,  WiFi is  no  longer  seen  as  a  premium bonus, but a necessity for many, and a rental lacking internet could struggle for bookings. Once you  have  addressed  these basics,  you  might  then  invest   in  other  features,  such  as smart tech,  to  further  boost appeal. Ultimately, the additional amenities you choose may depend on your neighborhood, budget, or desired clientele.

Tailor Your Property

You may want to focus on a specific demographic, or you might be   seeking   broader  appeal.  Both  of  these  approaches  will mean  tailoring  your  rental  to  get  bookings. For instance, you could engage both families and single travelers by making  your property pet-friendly. Yet, your neighborhood may be the major factor   in   who   visits,   since   local   features  may  not  suit  all demographics. Given that, look to  your  area's  attractions,  and see if they would appeal to millennial, family, or senior clientele. Your research won't end with this, as patterns will emerge once your business is up and running.