Have you been thinking about starting your own vacation rental property? Or even converting one of your long term rentals into a short term? We don't blame you! Millions of people visit the Black Hills Area every year. So why not capitalize on those tourism dollars being spent?!
As real estate agents in the area, we are frequently asked to help clients locate properties that would make great vacation rentals. But starting a vacation rental goes far beyond just locating the property! The good news is, we've done this a time or two! So we'd love to help you through the process...
So what are the important steps in starting a vacation rental?
Locate the Property: Unless your are converting an existing property, we, of course, need to start here! But what do you consider when you are looking for a vacation rental property? The answer is, a LOT! Number of bedrooms, location, finish quality and so many other things can affect your rental rate. And in turn, your rental rate affects your return on investment, or ROI. In the end, you are investing in a business, and the numbers should line up! Our agents can help you scour the market for a potential vacation rental, help you estimate what your earning potential could be, and give you the tools you need to determine whether or not a particular property will meet your investment goals.
Improvements: So you've found the property. Now what?? The next thing that you need to do is determine which improvements to the property are necessary. The health and safety of your guests is a priority, which will make certain improvements absolutely necessary (smoke alarms, hand rails, exterior lighting, etc.). Other improvements made to the aesthetics of the home may not be absolutely necessary; however, they may pay you back big time! For example, if a renovated kitchen or cozy back patio can help you drastically increase you nightly rate, then your investment in those renovations makes a lot of sense. Again, this is something our agents at Oak & Key can assist you with. We can complete a design board, recommend improvements, and even refer you to local contractors to complete the work.
Furnishings and Interior Design: Now that we've got the house itself ready, we need to furnish and stock it. Furniture, bed configuration (number of beds, size of beds, etc), linens, a well-stocked kitchen, and other details can not only affect your nightly rate, but also your reviews. And we need to tell you that reviews are SO SO SO important! Reviews affect where your property lands in search results and the frequency that it is booked. So you need to make sure your guests are super pleased with your amenities. There are so many things to consider when outfitting your vacation rental. Things like basing your number of plates and cups on your max occupancy; using white linens to ensure guests know they are clean; having small kitchen appliances, and so much more! Our agents know the ropes, so we can help you out!
Licensing/Insurance: Different from a traditional residence, a vacation rental has special licensing and insurance requirements. Depending on where the rental is located, there are state and local licenses that may need to be obtained. Insurance is also specialized, as it covers much for than traditional home insurance. You are now insuring your property, belongings, and your business liability that comes with it! Our agents can assist you in finding information regarding licensing, and also recommend local insurance agents who specialize in vacation rental insurance.
Branding and Booking: The house is set up and ready to rock. But that doesn't mean that you take a few photos on your cell phone and slap it online! Just like any other business, your branding will attract customers! Things like professional photos, creating your own logo, designing a website, and making social media pages are all super important to the success of your vacation rental. We know, this seems like a lot of effort! But we promise, it pays off in the end in bookings and most importantly, INCOME! We can help you with branding, deciding which websites to list your property on, and setting you up for success in your new venture!
Now that you have an introduction to what it takes to start a vacation rental, are you ready to take that leap and start looking for a property?! If so, we'd love to be a trusted partner by your side! Click the link below to fill out our contact form and let us know you are looking to start a vacation rental in the comments!