These days, investing in real estate is the “big thing” that everyone is trying to get into. For most people, passive income is the key to continued wealth. And it can indeed be very lucrative if done right. But the key phrase is “if it’s done right.” Unfortunately, people enter the industry blindly having no clue about the important factors to consider.
When it comes to the earning potential of a short-term rental, there are several factors to consider. So before entering the lucrative world of rental properties, first look at the factors that will determine how much you will make to determine if it will be a good investment for you.
Factors That Determine Your Short-Term Rental’s Earning Potential
How Many Occupants Your Property Can Hold
The name of the game here is “the more, the merrier.” When considering investing in short-term rental properties, you want to definitely look at how many people your property can comfortably house… Hotels do it, so can you.
This will be based on the number of bedrooms the property has and the size of beds you have as well. Basically, the more bedrooms a property has, the more people can stay, which is ideal for large groups that want to all stay in the same property. This will allow you to increase your price per night.
Location of Your Property
As realtors like to say, “location, location, location!” In the world of short-term rentals, location is truly everything. The property’s proximity to restaurants, grocery stores, attractions, shopping, etc, will all play a role in how much earning potential your property will have. Not only that, the location of your property has to align with why the potential guest is searching for a short-term property in the first place.
Maybe a guest is needing to stay in a short-term property close to downtown for a short stint for their job. With that type of stay, that person may want to be in the downtown area because it’s close to public transportation… If your property isn’t in an area with access to public transportation, they more than likely won’t book with you. So, when trying to determine an area to invest in a property, think long and hard about it and what you feel will be most appealing to potential guests. This is actually something you may want to ask a real estate mentor about.
What the Property is Like
This section is going to have more of a focus on the aesthetics of the property, so it’s going to be crucial that you properly list every amenity and feature on the Airbnb site to properly earn what you’ve put into the property. And remember, this isn’t a vacation rental, it’s a short-term rental, so your guest stays will be a little bit longer, and because of that, you can definitely put more effort into making the property cozy and welcoming.
• Make sure the bed is nice and soft, full of pillows
• Create an accent wall
• Make sure linen closets have plenty of towels, rags, and sheets
• Add plants
• Make sure the property isn’t cluttered, being that they will be bringing more personal items than a typical vacation rental guest (empty closet with hangers, empty drawers, etc.)
• Nice front and backyard, balcony, or patio
These are just a few things that will help paint a picture of what it will be like for a guest to temporarily live in your property. A detailed description, impeccable decor, and high-quality photos will be the perfect way to paint that picture.
Amenities and Features
People love amenities and features, so on your property listing, be sure to give as detailed of a description as you possibly can. List your stainless steel appliances, energy-efficient washer and dryer, and your surround-sound flatscreen TV… List every luxury you’re providing. Where the problem lies is when you list amenities and features that your property doesn’t have.
Cleanliness
As far as the cleanliness of your property, your responsibility is to make sure it’s spotless upon a guest’s first arrival and when they leave. You will also want to include a clause about how you want the property to look upon check out too.
Because they will have been there for an extended stay, you, of course, will have more cleaning up to do, but that doesn’t mean you can’t have guests leave dirty towels, rags, and sheets in designated bins before checking out. Also, keep in mind to include a cleaning fee for such an extended stay. It’s highly recommended that you hire a professional cleaning company to clean up after extended stays such as that of a short-term rental.
