Real estate is now changing. The property owners now consider whether if they want to rent their property as a short-term rental or yearly rental. In 2017, the percentage of investment property owners who rented their property as short-term rental was 24%. And that number escalated from 8% to 35% and is expected to grow even more in 2019.
According to a recent study, property owners can make more than 50% with short-term rentals rather than yearly rentals.
While renting a property as a short-term rental can make you a lot of money there are many things to consider before renting a property as a short-term rental. Leading among them are…
- How are you planning to manage the property?
- Are you prepared to manage the property like a boutique hotel?
- Are you ready to field hundreds of inquires a day in a near immediate return?
- Have you reviewed market analytics in your neighbourhood to determine the best nightly rate?
- Do you know what your average accommodation rate is?
We strongly recommend you choose a professional property management company to bring your success in short term rentals at best position. Just so you know, we have the best rates in the city.
Main thing, if you choose the right property management company to influence the property and maximize nightly rates and bookings it’s a no brainer.
Here are some additional things to consider:
- Less Wear and Tear.
- The average accommodation rate is 52%. Meaning the use of your property is 48% less than yearly rentals so there’s less wear and tear on the property.
- You’ll Pay Utilities
- With a short-term rental you’ll be paying the utilities rather than a yearly rental tenant paying utilities.
Here are 10 things you need to know and do before you rent out your vacation home:
Make Initial Analysis: Creating spreadsheets to analyse what it might cost you to rent out your home against expected income you can generate making it a vacation rental. Expenses include maintenance, utilities, taxes, insurance, repairs and amenities. Also keep the budget of preventive maintenance and wear tear
Claim any allowances you're entitled to:Renting out a holiday home? Consider it as a trade rather than an investment, which will give you more favourable tax treatment. You may be able to claim various allowances and reliefs, including:
Capital allowances on furnishings and equipment.
Capital gains tax reliefs, e.g. business asset rollover relief.
To qualify for these allowances, your holiday home must meet specific criteria, including being available at least 210 days per year and let for more than 105 days a year. Also, no single guest may stay for more than 31 days, and you must charge market value rent.
Get proper insurance: Discuss with your agent what type of policy you need for short-term rentals home.
Furnish, decorate and equip your home: Facilities typically depend on the market and the price, but people often expect most of what they would get at a hotel. A fast Wi-Fi connection, extensive cable package and other entertainment options are recommended, while a hot tub, pool table, board games and other recreation options can be a draw for some guests.
Get professional-quality photographs and write an excellent, detailed description:People will select your home based on the pictures and the description of the property. As they say first impression is the last impression, hence the first photo is incredibly important because that’s what people see. Be very detailed in your description. List every facility, down to balconies, cribs and pool noodles. These tips might become handy.
Find a dependable cleaning crew and other maintenance personnel:If your home is popular, you will have guests checking out in the morning and other guests arriving that afternoon. That makes it important that the cleaning crew show up on time. If you don't live nearby, your cleaning crew is also your eyes and ears. You may also need pool service, lawn service and a handyman, plus know whom to call if the toilet quits working.
Be ready to respond quickly: Most travellers will send inquiries to several homes at a time. The first suitable home to reply is likely to get their business.
Create a guest screening process:Screen your guests by asking the number of guests, their ages, their plans in the city. If they book, get their full names, addresses and phone numbers. You get a lot more information and a feel for people by talking to them. Do it yourself or get it done by a property management company.
Offer a personal touch:Whatever you offer to make your home stand out and to make their vacation easier is likely to get you more income. You can store useful things such as beach gear and toys for children in the property and allow their use and leave tips for holidaymakers based on your own experience. Anything you've learnt, pass it on. This gesture will help your guests feel at home and will significantly increase the chance of recommendations and re-bookings, leading to a steady annual income.
Hire a property management company: It is better to hire a property management company if you do not have the time or desire to run your vacation rental yourself successfully. They can manage every aspect of renting your home, from managing bookings, to creating your listing. Hiring a property management company can be very useful for you.