I had lunch with my client Kris Getzie last week and she told me the vacation rental she purchased through me was booked the entire winter. I asked her to share her secrets for my blog and she graciously wrote this post. She purchased the little blue house in the photo and the investment literally transformed her life. She’ll be writing another blog post about how it transformed her life next month. In the meantime, here are Kris’ secrets for owning a profitable vacation rental investment.
What Does it Take to Build a Profitable Vacation Rental Investment?
With nearly 50% of travelers booking vacation homes over hotels, investors have started pouring money into properties and often ask this question.
In my experience as a consultant, novice investors approach their first vacation rental with wide eyes and a sexy dream. Based on the latest statistics many assume their private escape will book itself and is guaranteed to be profitable.
Lucrative opportunities abound, but the reality is that turning a profit takes a lot of hard work, thought and care. Below are five insider tips for vacation rental profits based on experience and speaking to owners and managers:
The best vacation home owners crush their competitors by helping guests create a truly unique and authentic experience. They provide informative blogs, guides with local secrets and approach all interactions with intention to help.
People will not remember what you said or did, but they will remember how you made them feel.
Always respond promptly and enthusiastically. The old response standard was within 24 hours, but profitable owners often respond within 2-5 hours, even if their home is already booked.
If you are booked, at a minimum, respond with a short statement like “Sorry, we are booked”. Industry leaders often take it upon themselves to make recommendation for alternate dates or use their networks to find a comparable rental, despite no financial gain. Helpfulness will be remembered next year!
3. Polished Brand
Airbnb has in excess of 600,000 properties listed and is closing in on a $10B valuation (after it raises an additional $400M in capital from investors), surpassing that of Hyatt, a 57 year old stalwart.
In today’s competitive market, you will not compete if you do not have a solid hospitality brand present on the internet. Profitable owners are active on-line (by way of independent websites, social media and blogging), have an elementary understanding of search engine optimization, and positive guest reviews. Travelers will Google you and your home before they book, leaving missed opportunities for those who only market on listing sites.
4. Know What Your Guests Want
Successful owners outperform competitors by acting upon opportunities at their vacation rental and knowing exactly what their guests want. How might owners accurately know what guests want? By asking, of course!
Guest needs will continue to evolve and successful vacation rental owners keep pulse by regularly implementing surveys. It’s easy and I guarantee you 90% of your competitors aren’t doing it. Three to five poignant and open ended questions will not only help you elevate your guest experience, but it will also make dramatic improvements in your marketing efforts.
For example, if guests refer to your home as a cottage, be sure describe it as a cottage in marketing materials (speak like your guests!). Or perhaps, many comment on the lovely wine bar next door; leave coupons for future groups to enjoy at a discount (local businesses often partner with vacation rental owners).
Owners can leave a survey with each group at check-in for immediate feedback or send an anonymous Survey Monkey link seasonally. The results are astounding!
5. It’s All About The Details
Profitable vacation rental owners pay attention to details in the home. I recommend doing a yearly audit (at a minimum) to replace and repair worn amenities. Guests notice if towels are tattered so be sure to replace things as soon as visible signs of wear appear.
The vacation rental business is tough and getting more competitive each day. According to the 2014 Investment and Vacation Home Buyers Survey by the National Association of Realtors® (NAR), vacation home sales increased 30% between 2012 and 2013. But with record levels of vacation rental guests, you can build an extremely profitable business by including these five tips in your rental repertoire.
An experienced real estate agent can help you find the perfect property for your hospitality dream. The right home in the right market is critical to the foundation of your business (and subsequent success), so be sure to utilize this resource. For more detailed information on building a foundation and differentiating your vacation rental to drive profits, please check out my book Vacation Rentals For Newbies.
What do you think? What are your best learnings in differentiating your vacation home to drive occupancy and profits?
Article By Kris Getzie: Volo Founder & Principal Hospitality Consultant