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Without a doubt, real estate is one of the most popular investments in the world. Most millionaire investors still consider real estate to be the best investment you can make, even today. It’s tangible, versatile, and stable, since everyone needs somewhere to live!
With all of the possibilities in real estate, short-term rentals stand out as one of the best options for maximum profits. In the right markets, you can earn $150 to $400 per night all year round, but only if you know what you’re doing. Let’s talk about how to get the most out of short-term rentals as an investor!
1. Invest in a Rental Property
You may already have the space at your current residence, but otherwise, this investment strategy will need to start by investing in a property that’s ideal for short-term rentals. To maximize profits, it should have a measure of privacy, its own bathroom, enough amenities, and access to nearby attractions.
Accessory dwelling units (ADUs) on your property, entire homes, multi-unit properties, and more are perfect for short-term rentals. However, this is entirely up to you, your budget, and your management capacity.
If you buy a property in Michigan, you can imagine that you’ll only receive revenue for about half of the year. If you’re going to buy a property in a cold climate, it would have to be in a popular ski/hiking area or ice fishing area for year-round revenue. However, these are often expensive.
Otherwise, we’d strongly suggest a year-round tourist destination like Florida. This is just another way to maximize your profits, even if you don’t live in the state. Either way, buying properties near tourist destinations is always the way to go, including:
- Ski slopes
- Popular hiking trails
- Major cities
- Theme parks
- State or National Parks
The list goes on. Just remember, it’s best to find a place that has a high tourist population year-round!
Update the Property
Unlike some turnkey investments, short-term rentals may require some further investing after closing. Vacation rentals may require some additional amenities, decorations, and furniture that you wouldn’t have to buy with a long-term tenant. Make sure you’re factoring in these costs before closing!
2. Market Your Property
Listing your property on vacation rental platforms is the first and most important step in marketing the property. Go heavy on the pictures, heavy on the details, and heavy on the highlights. You’re trying to convince vacationers that your place is the best, so be sure to tell them exactly why!
Tell them all about the amenities you offer. Some are heavily sought-after, including:
- Pool or hot tub
- Private unit
- Private bathrooms
- Private yard or outdoor space
- Fire pit
- Multiple beds
- Proximity to attractions
The list goes on, and Airbnb updates owners on the best amenities to offer over time. It’s okay to use multiple platforms, but only if you’ll keep track of available dates. This is why most landlords will stick to one platform like Airbnb so they don’t have to keep track of scheduling on their own.
However, it shouldn’t be too difficult to market your property from there. You can use paid ads, but simply optimizing your listing will go a long way, and the best part is that it’s free!
3. Have a Plan
Managing short-term rentals is completely different from managing long-term rentals. You will have to clean the property more often, set everything up as it was, restock amenities, and more between stays. If someone is leaving the same day a new visitor is coming, this could pose serious time constraints on you.
If you work at home and you’re renting out a second unit or ADU on your property, then this isn’t a big deal. However, if you travel a lot, have a tight work schedule, or if you live far away, then you’ll need to develop a maintenance plan.
Also, short-term renters often aren’t as invested in the property as long-term tenants. This means that the need for maintenance may be greater for vacation properties, which is important to keep in mind. However, if you have a plan in place, this shouldn’t be a problem!
Keep in mind that with short-term rentals, your chances of finding a less-than-ideal tenant are much higher, as there are simply more people to choose from. Having a plan for this, especially in your budget, is also essential. This is one of the reasons Airbnb is so popular, as they have some level of accountability and screening, but you still aren’t entirely safe from bad tenants.
4. Get Professional Help
Being a landlord is challenging enough with long-term tenants, and you don’t even need to fill vacancies that often. It’s even more challenging to find new residents all the time, clean up after them, and work out the logistics every week or even every couple of days!
Well, a property manager may be able to help you get the most out of your short-term rental property, and for only a small portion of your income! They can handle marketing, logistics, cleaning, and more, so you can just sit back and earn. There are plenty of other benefits of short-term rental property management, which you can learn here!
Invest in Short-Term Rentals Today!
Now that you know how to get the most out of short-term rentals, invest in a property and maximize your profits today! Real estate is such a booming industry, and more people are vacationing than ever before now that Covid restrictions are being lifted. There’s never been a better time to get started!
Launch your new investment property today and stay up to date with our latest investment tips for more information!