Vacation rentals are big business – according to Hotel Tech Report, the US vacation rental market is growing at 10 percent year-over-year, from $13.3 billion in 2021 to $20 billion by 2025. More people than ever are vacationing, and rentals of all kinds – lakeside cottages, mountain cabins, B&Bs, beach huts –  are in high demand. If you’re thinking of investing in a vacation rental, this is arguably the best opportunity you’ll ever have. Here, LycheeThings explains how you could make money from vacation rentals:

Vacation homes are a major responsibility 

If you’re a first-time investor, it’s crucial to understand that vacation rentals are a serious ongoing commitment. You not only pay to purchase the property but also to own it, long-term. Some long-term expenses you can expect are extra taxes, insurance, maintenance, repairs, management, security, losses, and, possibly, deprecation. You will have to invest your time in looking after it and, even in a hot market, profit isn’t always guaranteed.

Find a vacation rental you can afford

Before you purchase a vacation rental, you should gain a good grasp of your finances and ensure you aren’t biting off more than you can chew, especially when you’re seeking a mortgage. Research the property market for an inkling of home prices in your target area. Also, identify vacation-rental-related demand and long-term trends, if you can, for the best results. You should be able to justify every dollar you’re spending.

Make improvements to attract renters

Making improvements to your vacation rental can help you attract more renters and ask for more rent. Some examples of improvements that renters would like are beauty upgrades (think paint, plants, decoration), high-quality furniture, appliances (TV, fridge), security systems (burglar alarms, safes), and amenities (extra bathrooms, tubs). Rented offers worthwhile suggestions. Large-scale modifications – like external seating areas, a garden, a home theater, swimming pool – may sometimes be worthwhile. Consider your return on investment before investing in something big.

SmartSlydr is a low-cost, high-value investment that’s very much in keeping with the times. It automates any sliding door or window, making it a breeze for renters to exit or enter your home. With the Smart Pet Door system, their pets can enter and exit at will too. This is also a great way for busy entrepreneurs to let their pets come and go as needed. This ultimately creates an environment that’s much more enriching for your pet over the long run. Additionally, with the help of SmartSlydr, caring for a pet becomes less stressful, which can help lower instances of pet neglect and, in some cases, abandonment.

Protect yourself against litigation

You can’t control everything – things can sometimes go wrong, despite your best efforts. Forming an LLC can mitigate some of the risks you take on when you rent out a vacation property. It comes with limited liability, which means your personal assets aren’t affected if you get sued. To form an LLC, you can hire a lawyer or use a formation service – the latter is significantly cheaper.

Working with professionals can make it all easier

Working with professionals can make everything from finding a suitable home to running a vacation rental easier. Some key professionals specifically worth mentioning are realtors, business coaches, and property managers. Realtors can assist in finding a solid property at affordable prices, a business coach can help you get profitable, and a property manager can look after your rental (including managing guests) in your stead.

Conclusion

Treating your vacation rental investment as a business, instead of a one-off undertaking, may increase your chances of making money from it. You’ll be more likely to think like an entrepreneur and put time and effort into doing what it takes to become profitable – writing a business plan, marketing effectively, administering the property, and, last but not least, being a good host.

Image via Unsplash

Author: Jessica Brody