Are you a beginner or seasoned investor looking to make money in real estate investing? If yes, then you’ll find the strategies we mentioned in this piece quite helpful. Before investing your money in any real estate investment, consider doing your due diligence and study the various strategies relevant to the investment you intend to make.
The strategy(s) you use will significantly influence your risk, competition, and profit. Suppose you wish to make money as quickly as possible; you’ll need to follow the short-term rental investment strategies.
Short-term investing is different from long-term investment due to the various subcategories involved. Simply put, short-term rental investments mean you aren’t willing to wait for a long time before making serious profits from your real estate investment.
As an investor, your primary concern is getting profits, and you want it as quickly as you can. Although short-term rental real estate investment yields return fast, it isn’t riskier than long-term investing. Each has its opportunities and risks.
Short-term rental investing strategies have various options for investors to choose from regarding their choice of investment. Deciding on the best real estate investing strategy influences your finances and adaptability to your investment’s location.
The following are some short-term rental investment strategies every investor must know. You can always check Avery Carl’s website for available short-term rental properties for sale.
Price Your Listing Right
In the short-term rental market, you shouldn’t have a set price. There should always be room for price adjustment. Choosing a permanent rate might bring renters but won’t give you the profits.
It’d be best to have a dynamic pricing strategy that considers local supply, timing, and demand. Software like AirDNA has an inbuilt tool that helps you adjust pricing according to the market automatically. However, you’ll need another pricing tool if you want a more customized approach and extra data.
Tools like Price Labs, Wheelhouse, IGMS, and Beyond Pricing help with your pricing. Don’t forget to be flexible with your pricing depending on the number of customers you get.
Decide Where You Want to Buy
Location is crucial when it comes to buying a vacation home rental. Houses located in high-demand areas like Seattle turned in slim profit margins, according to a 2018 report from AirDNA. Shockingly, there’s a negative correlation between gross revenue and home prices.
The most profitable spots turned out to be smaller cities like Tennessee and Gatlinburg, with investors making over $53 000 in profits. Note that some municipalities have limited or banned short-term rentals recently; even some HOAs have ruled against it, so ensure you make inquiries before proceeding to buy from any location.
Leverage Key Tax Deductions
Your revenue needs to increase if you intend to be in business, but reducing your overhead costs is one way to do that. You can leverage some key tax credits and deductions to help you achieve that.
As a short-term rental investor, you can become eligible for some tax benefits including, the 14-day rule, betterment deduction, restoration, depreciation deduction, pass-through tax deduction, amongst others.
It’d help if you talk to your financial advisor or accountant about these tax benefits and learn more about them before proceeding to claim them.
Rank High in Local Listings
To ensure you get bookings even during the offseason, you’ll need to rank high when a traveler searches for short-term rentals in your location. Thus, you must have quality photos of the rental property and its amenities, a great ranking history, and positive feedback.
Consider reaching out to previous customers with a deal or discount. They might be willing to return to your place if they visit that area again and you had delivered exceptional service in the past.
Specialize in Off-Season Marketing
Vacation rentals with private pools can easily take in profits during high-demand periods, but you’ll need serious creativity and extra marketing effort to get more bookings once it’s off-season.
You can achieve your aim through the following ways:
1. Stay Ahead of the Competition
Discover your unique selling point and offer something your competitions don’t, for instance, more amenities or lower prices to catch those few-and-far-between vacationers when they come.
2. Capitalize on Local Events
Be mindful of community events, performance halls, local organizations, concert venues, and athletic teams to help you plan your marketing strategies.
That way, you can tailor your photos, listing description, and headline to reach out to travelers coming in for any local event. You can even ask the event organizers to include your space in websites or brochures they might handle or recommend you to guests.
Encourage Repeat Business
It’d help if you encourage past clients to return by offering them discounts; the more they come back, the better your returns. However, you’ll need to go beyond that if you intend to make a handsome profit from your short-term rental investment.
You can try the following:
1. Targeting Business Travelers
Business travelers are guests that need regular lodging and might stay for a while. You can target them in your listing description. Consider offering business-friendly amenities like super-fast Wi-Fi, earplugs, and blackout curtains for jetlagged naps.
You can even invest in short-term rentals near airports, conference centers, and other areas travelers frequent.
2. Offer Friend Discounts
Consider offering your guests referral rewards or discount codes. That way, you encourage them to get friends to patronize you. While it’s not repeated business, it’s extra money for your investment.
3. Update Guests on Recent Developments
Is there any recent development, ensure to let your past guests know. That way, they become apprised of these changes. You can even utilize special holidays like Christmas to send season’s greetings to your past renters. Many people travel around this period, and sending e-cards will help keep you in travelers’ minds when they want to book their lodgings.
A short-term rental investment is one quick way to make money in real estate compared to long-term investing. However, it requires the investor to be more flexible, learn fast, and adapt quickly to the market. Thus, you’ll need to know the best short-term rental market in 2021 and study the market trends before investing.
You’ll also need to adopt the investment strategies mentioned above to make more money from your short-term rental properties. You can find more tips on The Short Term Shop. Don’t forget to contact Avery for available short-term rental properties for sale.