Written by Jim McKinley, Contributing Writer for InFluential Magazine
Photography courtesy of Pixabay.
The sharing economy has officially graduated from a “thing” to a “huge thing.” People are making large sums of money transporting others in their own vehicles and hosting them as vacationers in their own properties. According to the Brookings Institution, the sharing economy will generate $335 billion worldwide by 2025. Vacation rental experts estimate that renting a property to vacationers for just three months a year will earn you a very healthy cash flow. But it takes work to convert your home into an appealing vacation property capable of drawing a reliable flow of renters. From a physical standpoint, it’s like staging a home for sale, and that’s a good thing to keep in mind if you’re looking for maximum ROI.
Renting out a spare room or your entire house will qualify you for a 20 percent deduction on business income. It could also help you recover some of the losses from deduction curtailments to state, local, and property taxes and mortgage interest. If you form a limited liability company, you’ll stay at your individual income rate while being covered by a corporation’s limited liability. That’s good news if a guest slips and falls on your property.
One of the best ways to make renters feel at home is to make them feel like they really are at home. Start by depersonalizing: Take down your family photographs and personal mementoes. Artwork and decorations should be generic and without high-priced pieces that could easily be broken. Instead, choose prints and photographs that are reflective of the area. Think of how you’d feel trying to relax in a place that’s clearly someone else’s home. The more you can do to genericize things, the easier it’ll be for guests to feel like vacationers.
Make It Convenient
Just because people are on vacation doesn’t mean they don’t need or want the little conveniences of home around them. Think about essentials like plates, bowls, and silverware, as well as little things that people generally don’t travel with or forget to pack. Set out pens and pencils, scratch paper, scissors, first-aid items (band aids, etc.), extra blankets and pillows, cooking utensils, bag clips, stain removers and cloth wipes, local take-out menus, and Tupperware bowls.
Another very good idea from an ROI standpoint is to offer an expansive cable TV package and a DVD/Blu-ray player (including instructions). People don’t go on vacation to watch TV, but it’s a convenience that visitors appreciate, nonetheless.
Lock Box or Keyless Entry
You never know when guests will be arriving, so make it easy for them by setting up a lock box or installing a keyless entry system, which allows people to come and go using a code. It’s a good way to avoid problems that could start someone’s vacation off on a bad foot.
Keep it Clean
Maintaining a clean vacation rental is crucial. You’ll need to give the place a thorough, top-to-bottom cleaning between guests. Some renters hire professional cleaners, because what’s needed is more than the usual cleaning and straightening. It’s hard work and must be done every time a guest leaves. Of course, doing it yourself means you’ll retain more of your profits, so be sure you have effective cleaning tools, such as a high-quality vacuum cleaner with plenty of attachments. Be sure to read product guides and customer reviews before selecting one.
One of the best ROI measures for a rental home owner is to have your property professionally landscaped, giving the place a well-kept and aesthetically pleasing look. Emphasize ground cover, which maintains soil moisture and reduces weed growth. Shrubs, trees, and bushes should be well-pruned and lawn debris kept cleared away.
Renting out a home (or part of one) is hard work and can be frustrating sometimes. To make it pay as a source of income, you must be willing to invest in making it attractive and convenient for visitors. Just imagine what you would want and expect from a vacation rental.