VACATION RENTAL MANAGEMENT: A BREAKDOWN OF THE SHORT-TERM RENTAL FEES
Long gone are the days when travelers from far and wide wanted to stay at the overpriced hotel or quirky motel with strangers now, as they travel many long for a feeling of home while on the road.
This desire is what keeps the AirBnB business booming.
Thousands all over the world have converted their homes or unused vacation houses into money-making machines. However, there is more to vacation rental management than one might expect.
Vacation Rental Management
The Airbnb model has challenged the hotel industry and given them a run for their money. For those who use it as an income stream, it has freed up their budgets, allowing them the extra financial security they were looking for.
But before you can get to the point of toasting your success with flutes of champagne, you must first make sure that your pricing structure is favorable yet fair.
How to calculate the minimum nightly rate
When looking at what to charge for your rental , there is a simple formula that can help you decide. Before calculating this figure, you will need to know how much you pay each month in rent (which should include heat and hot water), electricity, internet/cable.
You will add up the cost for each, then divide that number by 30, and the sum of the equation will be your nightly charge. So, for example, if your rent is 900, electricity is 100, the cable is 60, the equation would look like this:
900+100+60=1060÷30=35.33
Therefore your base nightly rate will be 35.55 per night. This amount is what you would charge if you are only looking to break even. But let's get real. The whole purpose of a vacation rental is to make money, so let's dig a little deeper into the other costs associated that often go overlooked with a vacation rental
management agreement.
Location Location Location
If you are one of the lucky ones who own a rental property in a prime area, then you can (and should)
charge more for your minimum nightly rate. There are a few places that are considered top regions and are usually near tourist-heavy locations.
Beaches are one example. If you live in a tropical location, then you know how desireable the beach is as a travel destination. During peak season, your vacation rental can be booked solid.
If your rental is right on the beach, then you can (and should) charge a little more for this convenience.
Many places near the beach or other prime locations charge dynamic pricing structure as there is more demand on the weekend than during the week. This weekend price also fluctuates depending on if you are in a peak season or off-season time of year.
Charging extra for amenities
There are many types of Airbnb's available. From the basic apartments to the super luxe and chic modern condo, there is something for everyone's taste.
If you have a style that bodes towards high-end luxury and your vacation rental reflects as such, then you can charge more for amenities that are not common among the bare-bones variety.
Items such as hot tubs, swimming pools, in-home gyms, and overall luxury decor can add to the total costs of the stay. Each of these things takes maintenance and care, so you should consider the added expense should be in the overall nightly fee.
Cleaning services
After each guest leaves, you will need to get into your vacation rental and do a walkthrough to check for cleanliness and damages. You shouldn't expect your guests to break out the bleach and scrub down your bathroom, but it should still be in a manner that doesn't look like a frat house after rush week.
Partnering with a reputable cleaning service is a great way to help maintain your status as a superior vacation rental host. If there is one thing that can kill your five-star rating, it's a vacation rental that isn't spotless for the next guest.
If you are looking to save some money, you can do the cleaning yourself, but before you take on this job, ask your self if the time investment is worth the effort. Sometimes it's best to let the professionals handle it.
Prime Parking
Many vacation rentals offer prime parking at an additional cost. If you live in a highly populated city where parking spaces are limited, you can charge additional fees for those prime spots where you, as the owner,
would typically park your vehicle.
Surprisingly enough people will pay good money for prime parking in larger cities. By offering this, it helps
your guests have one less worry when it comes to their vacation.
Themed Vacation Rentals
Some short term rentals are vacation destinations in and of themselves. These types of vacation rentals
are generally for much larger homes but can be used for smaller locations as well.
Homeowners are hopping on the trend of designing their homes with a particular theme.
For example, you can design each room of your home to look like a different classic board game. Or you can turn your home into a video gamers paradise with each room hosting a separate gaming console.
These types of vacation rental destinations are great as you can include many astonishing features as you like yet reserve some other amazing features as an additional rental perk.
You can have hoverboards for rent, or if you live near water, you can rent out boating equipment per day or per stay. If you live in a cabin near open fields, you can rent out four-wheelers. The options are virtually endless.
Staying Competitive While Staying Profitable
You always want to give your guest options, but the most crucial thing in vacation rental management is to be transparent. Do not hide your fees or cancellation polices from your guests.
Always remain above board in your billing practices. Don't try tack on hidden fees and make sure that the guest is clear on what is (and is not) included in their vacation package.
For more details on how you can make the most of your short term rental, then check out our website for more information.