How Can I Make Money from My Holiday Rental?
Owning a holiday home can be one of the most enjoyable experiences you can have. Whether it be a perfect place in the sun, or a log cabin in the Swiss Alps, having the luxury of owning your own retreat is hard to top. But aside from the obvious benefits, your holiday home can also be a fantastic long term investment and can therefore also make sound business sense. From my experience, home owners at best, and with a lot of hard work, may get their investment property to just about “wash its own face”. However it’s more common for an owner to see their bank account being drained just to maintain a home they only get time to spend a few weeks in each year, while the remaining time it mostly unoccupied.
So even when you have an ideal home in an ideal location it still takes a lot of hard and continuous work to transform it into an ideal holiday rental investment that not only washes its own face but makes a bit profit to boot.
Things You Shouldn’t Do
It’s probably best to start by making clear some of the things that contribute to not making a lot of money from your holiday rental. By avoiding certain mistakes you can give your holiday home investment the best chance to not just compete, but soar in the market place.
Don’t DIY if you don’t have the time to effectively manage it yourself.
It sounds obvious, but even the most well intentioned owner will set out to facilitate their own bookings only to find that it’s just too much effort, especially if they have a full time job or other time-consuming commitments.
Rather than ignore the issue, a wee bit of research can result in you finding the ideal company to manage all aspects of your home rental; from marketing, enquiries and bookings to providing key-holding, cleaning and maintenance services.
Whatever services you sign up for will come at a price, but at least you could potentially find a hassle free way to get some return on your investment while also having the benefit of being able to reserve some time for your own well earned break.
Don’t have it looking like a student bed sit!
Obvious, yet still a common oversight. Let’s not dwell on it too much, as a rule of thumb just think ‘hotel standard’.
OK it’s a home not a hotel, but your marketing images should show a nice clean & tidy place to stay. Some level of ‘staging’ will be of obvious benefit, flowers in the vase, spirit-level for all wall hangings etc. But remember, the scene you set is pretty much what your clients will expect on arrival.
Don’t offer what you can’t deliver!
Again, it’s fairly obvious, but then some owners do get sucked into elaborating the truth just to secure a booking. If you ‘colour’ the description of your holiday home, its location, situation and/or facilities and you fail to deliver in one or more areas, then you are effectively building your guests up to a hugely disappointing arrival.
Note:A common mistake owners make, which can be a genuine oversight, it to specify a maximum number of persons their rental can accommodate only for a guest to complain that they don’t have a sufficient number of dining room chairs, cutlery, plates, cups, glasses or even patio furniture, including sun lounges. Make sure you max accommodation is met by adequate level of facilities.
Believe me, whatever your guests read about your holiday home or view in the images you provide, they will use all of this information to create their ‘holiday vision’. In this perfect holiday vision, they will see themselves in your holiday home exactly as you have described it, and all of this could be weeks or even months before they even arrive!
Remember, a holiday is a really big deal. For most it will be a once a year event, and the vast majority of renters will have taken a lot of time evaluating all their holiday rental options before making a decision to book yours. So it is your responsibility not to let them down by providing inaccurate information.
Furthermore, for all the time and effort it takes to attract a renter to your home, you are then provided with the perfect opportunity to deliver on what they expect and hopefully get a repeat booking in the future; or even a booking based on a client recommendation, even better!
At the very least you should be able to get a glowing testimonial that you can use to persuade future holiday makers to choose your holiday home over all of the other offerings on the market, so if anything aim to over-deliver.
Don’t price yourself out of the market!
Do your research. Take a look on one or more of the leading holiday rental websites/portals, and try to find homes similar to yours so you can see how they are being marketed and what their rates are.
You could also look at how full their calendars are, although this can be a bit misleading as some owners will simply fill in less popular months with bogus bookings to make their home look more popular and therefore credible.
Note: I know of at least one holiday rental marketing site that will list your home higher in their results if you regularly update your calendar. On the face of it, a good idea as it is in the best interests of a portal to provide their visitors with holiday rental results that have accurate availability information. On the other hand this can encourage owners to regularly block out their less popular dates just to maintain a higher listing.
Things You Should Do
Understand your holiday home
People who struggle to rent their holiday homes aren’t necessarily always those same people who can’t commit enough time toward it. NOT being clear about what you have, how prospective renters perceive what you offer or identifying more than one potential way to market your home could mean all your hard work is wasted.
This is where a simple exercise in SWOT analysis is can be useful.
SWOT stands for “Strengths Weaknesses Opportunities and Threats”, and if you’re not naturally a logical thinker then a SWOT will prove a useful exercise in guiding you to think in a certain way; ultimately a way that will enable you to understand where you are, where you want to be and how to get there.
To do a SWOT, simply write down the four headings, and then underneath each heading have a really good brainstorming session. The goal is to try to get as many points under each heading as you can. The more the better!
Strengths & Weaknesses – Let’s not go into it too deeply, but as an example, one strength may be that your holiday rental is in a sort after area, while its weakness may be that it looks a bit run down as it hasn’t had a good spring clean in some time.
As an opportunity, you may do a bit of brainstorming on your surrounding area and discover that your location is actually a popular wedding destination, or popular for golfing, diving, surfing or local history & art galleries, it could be any number of things but the point is you are identifying ‘opportunities’ to improve your success at renting you holiday home. One of the ways to do this is to reach those people who could potentially be interested in what you have to offer. So for this example you may decide to advertise in more specialised publications or themed websites (such as ‘activity’ holiday websites).
A threat can be something that is or may be in the way of you achieving success with your rental. It could be something as simple as you identifying that you don’t have time to manage your enquiries adequately and by the time to get back to some people they have already booked with someone else, if this is the case then you are a potential threat to your rental’s success.
Just like all the points mentioned in the “Things You Shouldn’t Do” section, this SWOT is starting to look a bit obvious, but that’s the beauty of it, it is a simple and effective way to get you focused. The one golden rule is to be honest as this will enable you to effectively improve your situation.
One last SWOT related note: if it all sounds a bit too drab then why not involve a couple of friends. Having a fresh perspective is always good. For example a friend will be more detached from your situation and may see issues which are obvious to them but not so obvious to you.
For example, one of the biggest pitfalls is holiday home presentation. Maybe you don’t see it, but a friend could quite easily put themselves in the position of a potential renter and give you some fresh practical advice as to what they would expect and therefore how your home could be better prepared.
Understand your market
Consider every aspect of your rental and see how its facilities may be naturally suited to certain people, groups of people or people with specific interests. See what your local area has to offer. Be imaginative (not deluded) and see you what you have to offer can be used to tap into as many well defined markets as possible. E.g. is it a popular wedding destination? It is located near any golf courses?
Note:If you are looking for me to give you a good example, then try to find a holiday rental being advertised in Kissimmee, Florida that doesn’t have any reference to Disney! I.e. when you have a holiday rental with an attraction as big as Disney World on its doorstep your marketing focus it a no-brainer.
Identifying one or more suitable well-defined markets will enable you to better focus your marketing efforts, and in some respects will make it easier in terms of how you prepare your marketing information and where you use it; whether it be a holiday rental marketing portal or a wedding or golf magazine.
Prepare your booking information
This can range from your booking ‘Terms and Conditions’ to the directions you should provide your clients so that they know how to get to your holiday home from the airport etc… With respect to your Terms & Conditions remember to be both comprehensive and clear so that your client is fully aware of the deal they are entering into. This is even more important with respect to deposits, when final payments are due and what happens if a booking is cancelled etc. Remember not to intentionally mislead your clients, it will only come back to haunt you.
Prepare your marketing
You will need large, great-looking images, even if you need to hire a photographer. Period!
You must be organised
Your organisational skills will be important for dealing with enquiries. You will be expected to reply promptly to enquiries, providing clear, accurate and relevant information.
Once a booking is confirmed, you should have pre-prepared information ready to send to your client. This will include the full address of your home, directions from the airport, important phone numbers, and any instructions for appliances etc within the home itself. Remember, it’s your home, you should know enough about it and the area surrounding it to provide your clients with a bit of an introductory guide that will enable them to feel fully prepared when they arrive.
- Have a plan and stick to it.
- Periodically review your plan and update it if you need to. Then stick to it again!
- Aim to reply to all enquiries within 1-2 hours. The quicker the better – your potential client may have submitted several enquiries to several different owners simultaneously make sure you are one of the first replies your client receives.
- If your client paid a security bond (deposit) be prompt with its return, i.e. don’t wait for your client to remind you by asking whey they have not yet received it.
- Once your clients return from their holiday, ask how their holiday went and if they would provide you with a review.
- Remember, it takes a lot of effort trying to close a deal on a booking and then ensuring your client has a positive holiday experience. Now that you are building up a list of happy clients, keep in touch with them. Not every day, but if you decide to run any special rates or offers, keep your past clients in the loop. Past ‘happy’ clients can act as your extended sales team, and personal recommendations are simply the undisputed champion of sales & marketing. One of your clients will pitch you holiday rental to one of their friends better than you can hands-down!
My Last Bit of Advice
Always Try To Do The Right Thing
At the risk of sounding a bit patronising, my biggest philosophy is “if it’s done properly, you won’t have to do it again” (not in the immediate future anyway). For holiday rentals, this can apply to every aspect covered in this article.
Simply get your directions ‘perfect’. If you do, you will reduce the likelihood of having to answer time-consuming queries before your clients go on holiday, or phone calls late at night from clients who are lost and can’t find your accommodation – it does happen!
Keep your marketing spot on, and keep it accurate. Fail to get it right, and disappointed clients will often want some sort of compensation, and even when you compensate them, remember that you are just giving them something they feel you owe them because you let them down on some level. The outcome will still be a disappointed client, who won’t re-book or pass on any referrals, and you will be out of pocket. No one wins.
At the end of the day, there is only ever a finite amount of time you can commit to anything in life, including the management of a holiday rental.
You must ask yourself this. How would you like to spend your time? Do you want to spend it making wrong decisions and constantly dealing with complaints and offering compensation? Or would you prefer to make right decisions, doing things the right way, not wasting your time and therefore making daily progress. Getting it right produces a bit of a snowball effect, and you amass a great number of honest testimonials from a large number of satisfied clients who not only re-book but also pass on referrals from friends and family who may like to book also. All this will contribute to you making your holiday rental a long-term success.