Vacation home owners are facing challenges if they need to sell.
Many are turning to rental as an alternative to having a property on the listings for many months.
There are a large number of owners choosing this route because they have either tried selling, or are not prepared to lower their asking price and want to ride out the economic decline by renting for a few years but the road to vacation rental success is a long one.
This creates an interesting situation as there will be a lot of new properties coming into, what is already a competitive market, and owners considering this option need to work hard to compete effectively and achieve vacation rental success.
Despite the current economic conditions, a well presented and effectively marketed property should have no challenge in renting in the traditional high season periods but to be successful, owners must also attract the elusive out-of-season renters and convert enquiries to bookings.
Renters have high expectations of a vacation home. Just having good waterfront is not sufficient – hi speed internet; a dishwasher; laundry facilities and satellite TV are high on criteria lists.
Fully equipped kitchens, top quality mattresses and a selection of non-motorised watercraft are expected as standard.
These keys to success are the basics to getting set up and achieving good occupancy.
1. Assess skills and choose the route – Rent By Owner or Agency
To create income for the coming year, owners must get their property prepared for rental, marketed and advertised and be ready for accepting bookings very quickly.
You’ll need skills in marketing, social networking, search engine optimization and web design to make a quick start, or be willing to spend the money for outsourced help.
If you don’t have a clue where to start or are unwilling to spend the time learning how to do it well, you might be better off using an agency, at least for the first year.
There are commission costs in getting an agency to do the work but that could pay itself back in the increased marketing power an agency has.
2. Using an agency
An agency will take care of all the rental management aspects of a rental home, and some will also manage changeovers and limited amounts of maintenance.
They will do all the marketing and advertising, match up the rental groups to the home and look after the financial aspect, collecting money and ensuring they have a security deposit.
Some agencies just concentrate on the high season months while others have off season marketing strategies which are preferable for maximum income opportunities.
When working with an agency there will be a commission charge. Agencies will charge between 12% and 25% depending on the services they offer, the length of a rental period, and the rental value of a property.
Resort complexes, particularly in the ski areas may charge a much higher fee to fully ‘manage’ a property, so check this out thoroughly.
3. Get some help
If you decide on the Rent by Owner (RBO) route, you will need to create a web site or perhaps use a blog to market the property.
There are some great resources online – outsourcing agencies can be used to set up web sites, or tweak a site to attract more visitors.
This doesn’t need to be expensive but there are companies that will still charge up to $3000 for a web site.
That isn’t necessary – a simple self hosted blog can cost less than $150 to set up for those that are willing to do the work, and have the skills.
4. Setting a rental rate
There are a lot of myths about rental rates and I have heard of owners asking ridiculous amounts for sub standard accommodation because they have ‘heard’ of big figures being asked, and received.
In some popular areas high prices can certainly be achieved, but these properties have facilities to match.
Successful owners will be realistic and do their research thoroughly; look at comparable properties and provide excellent value for money.
Out of season rental rates reduce considerably because there are a lot of properties available to a smaller rental population outside of traditional high season periods.
5. Create a plan
It’s easy enough to put an ad on Craig’s List or Kijiji but unless there are systems in place to manage the calls and emails, and a rental contract ready to go, bookings can be lost. A plan should outline the tasks that need to be done before the property is even advertised. These tasks include deciding on property management, your own usage of the property, how bookings will be dealt with, systems for accepting money, checking on insurance etc.
6. Develop a marketing strategy and set a budget
It is easy to spend a lot of money on different listing sites, print advertising and other marketing options so it is important to make sure there is a budget.
Allocate an initial set-up amount depending on what type of web site is being designed, then an annual amount for listing.
I suggest listing on a couple of sites focused on your particular area, and one or two international sites.
There are also plenty of free listing sites.
There’s a list of sites in my free ebook.
Commenting on blogs and contributing to travel forums can also be very effective at driving traffic to a listing or cottage web site.
7. A Property Audit
This is a highly competitive market, particularly out so season, and if your property is found on the web, it needs to look outstanding.
You’ll need to take a critical look at your property, and evaluate the appeal to the vacationing public.
Time spent doing an Audit, where every aspect of the property is assessed is a necessary requirement.
Vacation homes with top class facilities that look outstanding in photographs, will be more successful than poorly decorated and furnished properties (regardless of the age or rental rate).
Renter expectations are much higher than they used to be and upgraded facilities such as hot tubs, saunas, hi speed internet, satellite HD TVs and entertainment systems will attract more renters.
8. Booking Management Systems
No rental should commence without a signed rental agreement, along with Terms and Conditions of Rental that outline each party’s responsibilities.
How the property should be left on departure; the arrival and departure times, whether pets are allowed, use of watercraft and the maximum number accommodated etc. are all issues that must be clearly indicated in an agreement.
There should also be a robust system for sending out invoices, statements, collecting funds and damage deposits, along with a clear cancellation policy.
9. Property Management
A property must be checked between rentals and there should be no exception to this rule.
You’ll have to either do it your self in the 5 hour window between rentals, or hire a local company.
It can be challenging to find a reliable person to undertake this task – they must be responsive and trustworthy.
There should also be a person on hand to deal with emergencies.
10. Be Customer Focused Is The Master Key To Vacation Rental Success
As soon as an you advertise your property you become a supplier to the travel industry, and as such you’ll need to be customer focused and driven to provide superior service to your rental guests.
Some owners provide gift baskets or kids pack; pet welcome packages and comprehensive tourist information.
Many provide a concierge service – helping with rental of watercraft, arranging ski passes, providing information on events and attractions in the area, or even doing pre-arrival shopping for international guests.
There is a huge responsibility for offering vacation rental that you need to accept if you are to be successful.