ARE VACATION RENTALS FOR YOU?
Who doesn't love a good vacation? Staying at uniquely curated homes for a comparably lower cost than hotels is easier than ever, thanks to platforms like Airbnb. With the rise in vacation rental properties, it's no secret that everyone wants in on the action, although it's not that easy. Short-term rentals are currently booming and owner's are seeing great returns compared to long-term rentals. However, local elected officials (especially in Hawaii) are cracking down on short-term legalities and zoning terms to preserve local culture and keep local residents within their means. With all this in mind, are vacation rentals the right investment option for you?
I'm here to tell you that owning a vacation rental proves more beneficial to your pockets then not, as long as you do your due diligence in your local market. It can be overwhelming to break into the vacation rental industry, so I've broken down what I think are the best steps to get started hosting.
4 STEPS TO MAKE MONEY AS AN AIRBNB HOST
DO YOUR RESEARCH
One of the best tools on the market to do your research beforehand is AirDNA. AirDNA analyzes vacation rental potential in your desired local market. This tool gives you insight into occupancy rates, average listing price, market comparison, and comp analysis. On top of running the numbers, you need to make sure you do your due diligence on local zoning, building compliance, and HOA allowances.
THE 1% RULE
With short-term rental legality changes on the rise, it is crucial to account for potential legal changes and ensure your property will still be able to rent as a long-term rental. If your property won't do great as a long-term rental, make sure you have multiple exit strategies in place in the situation where a new law is enforced. This is important because property is a long-term valuable asset, meaning you should plan for how it will be profitable long-term in the case it's unsustainable as a vacation rental. The top rule to use in this position is the 1% rule, which states you should be able to rent your property for 1% of the purchase price.
THE PROPERTY
Be attentive when designing your vacation rental; making sure it has a unique touch while also ensuring its durable to withstand the heavy foot traffic from guests is important. Maintenance and repairs are frequently needed on vacation rentals because of the constant turnover. Make sure your budget has an allotted amount set aside to handle any of these maintenance issues that may come up. The fine line is to also ensure the items in your vacation rental are of quality to provide value and pleasure to the guests. Pay attention to adding quality details in your property listing like having a king bed, using an effective title, a detailed description, and professional pictures to attract more guests.
THE TEAM & TOOLS
It is vital you have a good handyman available and a great cleaner. Implementing both normal cleans to replenish household goods, as well as deep cleans about once a month to maintain upkeep, are both important functions for your rental. Apart from your human resources, you also need technical resources to automate processes. Automating processes with a channel manager helps upkeep with guests to get better reviews. The processes populate on every vacation rental site and update guests with notifications pre-check-in, during, and end of stay, general communication. You can also use a dynamic pricing tool to automate your vacation rental prices depending on time of year, events, and availability to increase occupancy. Lastly, having a lockbox to change code dynamically makes the guest process more efficient.
EXCLUSIVE INVESTOR PERKS
When you invest with us, you get exclusive perks that most investors don't receive when they invest with a different real estate investor. We've done projects on over 100 properties totaling over $130 million in deals across Hawaii and the mainland. Our experience allows us to give our investors a 12% return on their investment compared to the average 8-10% with other investors. We keep you updated throughout the project so you have a clear understanding on how your investment is being used. Investing with us is an easy way to build passive income.
If you have any questions on real estate investing with us, feel free to reach out to info@indarhawaii.com for more information before getting started.
