If you in the market for a second home, you are probably wondering how you will make money off it when you are away. You actually can make decent money off your vacation home if you go about the endeavor the right way.
As you would expect, the location of your property will be a key factor in whether or not you will be able to make money off it. Properties located in areas that are frequented by vacationers will surely make money.
Below are some of the ideas you can put to use to increase your chances of making good money from your vacation home:
It All Boils Down to Marketing
If you have a beautiful vacation home, the battle is already half-won. All you have to do is let people know about it and you will have a reliable stream of renters.
A great number of your competitors don’t put a lot of thought into how they market their properties. If you take marketing seriously, you will quickly rise above them and position your property as one of the most visible vacation homes in your area.
To start, you should list your vacation home on the traditional listing sites that vacationers frequent. Such sites include Airbnb, Flip Key, One Fine Stay, Booking.com, and HomeAway, among others.
What you shouldn’t do is invest time trying to rise to the top in all of them. The sound thing to do is figure out the two or three sites that drive the most traffic to your area and focus your energies on only those few sites. You will have a better chance of ranking high on those few sites when your time isn’t spread too thin.
Given a choice, you should always prioritize the listing sites that allow renters and vacationers to interact freely. Airbnb is a good example of such a listing site. In such a situation, you will have greater control over how your promotional efforts affect the metrics that push properties to the top. Such metrics for Airbnb include the number of reviews, average star rating, number of bookings made, number of canceled bookings, and whether or not you are a super host.
One of the important basics you shouldn’t overlook when listing your property on booking sites is the quality of the photos you provide. It is imperative that you use professionally shot photos and capture the things that vacationers typically care about such as views, space, bathrooms, quality of finishes, and furniture.
Pricing and Occupancy
Pricing is part of marketing. Failing to get the price can lead to you leaving a lot of money on the table or even incurring losses.
Since you probably aren’t a pro in marketing, you should keep it simple. The only thing you should care about as far as pricing is concerned is price elasticity of demand. Price elasticity of demand basically refers to the tendency of the demand for a product or service to change as the price changes.
To guard against under-pricing or over-pricing your vacation property, start with a lower rental price and then scale the price up month over month while taking into account seasonality of demand for vacation properties and then compare the yields for the rental prices. The occupancy really doesn’t matter. What matters is how much money you make. There are instances where you will make more money with a higher rental price at a lower occupancy than a lower rental price at a higher occupancy.
About Living Lake Tahoe
Living Lake Tahoe is a real estate agency that helps people looking to buy, sell, or rent properties in Tahoe navigate the local real estate market and achieve their goals as painlessly as possible. The team is headed by Alvin Steinberg who has over four decades of experience as a real estate agent. Alvin carries a CRS (Certified Residential Specialist) in both California and Nevada.