Quadruple Your Rental Income by Ditching Yearly Contracts
Gaining the highest income from your property does not always mean that you need to settle for a yearly lease contract or hire a property management company. A new and very popular method is being used across the globe to gain up to four times the amount you would get from an annual lease renewal contract.
But how is this possible?
Firstly, you need to check to see if your property is in a catchment area for tourists or business travelers. The easiest way to do this is by visiting one of the many vacation rental websites out there.
Sites such as the well-known Airbnb and HomeAway are the best websites to check. If there are properties in the same area as your house or apartment listed, there is a chance you could be missing out on extra income.
These websites will help your property be seen by people looking for a place to stay in the area your property is situated. You can then charge daily, weekly, or monthly rates. All of which bring in a far higher income than long term rental contracts.
Disadvantages of Long-Term Rentals
Long term rentals often come with laws attached to them that forbid you from raising the rent. It also means that you stand the risk of squatters that hard to evict. On the other hand, short term rentals are far less likely to come with such issues.
If you use a vacation rental website like Airbnb or HomeAway to list your property, then most people have feedback on their account. You can pick and choose the people that you want to stay at the property for short stays. Effectively, what you are doing is renting out your property to people that are less likely to come into financial difficulty for one reason or another.
These people are vacationers or business personnel that need somewhere to stay for a short while.
Therefore, most of these people are not planning on staying for the long term. Furthermore, your property does not become a home to them.
In the end, all the issues and horror stories you hear many renters face are reduced greatly.
Advantages Switching to Short Term Lease Plans
Now before you get too excited, you have to remember that earning extra money from your property does not come for free or without effort. Bear this in mind while also keeping an open mind as you read through this guide to short term rentals.
Sites like Airbnb allow you to list your property for free. There are plenty of other websites that allow exactly the same free listing capabilities.
Once you have listed your property or properties on all the websites possible for free, you have only invested time at this point and no money (unless you hired someone to place the listings for you).
All these websites pay millions towards marketing their offering. This means that these websites have huge numbers of visitors. In turn, your property will be exposed to all these visitors – especially those filtering out places to stay in the area your property is listed.
Already, at this point, the key advantages are that you will not have had to pay a property management company to find people to rent your property.
Furthermore, the listings will have been free to place. The only risk you will have taken at this point is keeping your property available to anyone that wants to book a short stay. This is as opposed to renting it out on a long-term basis.
The Key Advantage Is the Monetary Return
Short term rentals demand much higher prices. If your property is worth $500 per month, the daily rate is roughly $16 a day over the course of a one-year rental contract. It’s not exactly a bank-breaking number. However, on a short-term vacation lease, you could rent the property out for $60 a day in peak season and $30 a day in off-peak season.
Suddenly you are quadrupling your income when the holiday season is at its peak in the area your property is located. During off-peak seasons you can double the income you would have been earning via a long-term lease agreement.
At the very worst, you may get the same rate as you would get for a long-term lease agreement during off-peak season and all your profit comes over peak periods like summer if your property is near the beach or winter if winter sports are popular there.
Disadvantages of Short-Term Rentals
Here comes the tough part. Now if you rent a property out on a long-term lease, then the renters move in and in general, you get very little hassle. Every month that rental payment comes in and life goes on.
On the other hand, managing a vacation rental is not so hassle free. You have multiple websites to manage your listings on. There are guest inquiries on these websites that you will need to deal with. You need to make sure the guests can check in and check. Plus, you will need to arrange cleaners to change bed sheets and prepare the property for the next guests.
Adding to all of this, you have multiple calendars to manage on all the websites that your property is listed on. Now you could always just stick to one or two websites such as Airbnb and/or HomeAway, but then you would be missing out on all that online traffic you could gain from the other websites.
The problem with having so many calendars is that when a booking comes through on one website, then you need to log on to every other site and mark the dates as unavailable. This is a tedious task, to say the least considering there are over 10 popular vacation rental websites. If you do not do this, then you stand the risk of double bookings.
To get around the issue of double bookings, as with any business, you will need to search and discover time hacks. You can read more about this at Lodgify’s blog where they have an interesting article: how to choose a channel manager.
A channel manager is effectively a central calendar that syncs with other calendars on vacation rental websites like Airbnb, HomeAway, Booking.com, Expedia, TripAdvisor, Flip key, and many more.
With this time hack, you will no longer have an issue with double bookings. On top of that, you will have a centralized place to manage all your properties.
Already you can get a feel for this and realize there is far more hassle involved in short term rentals. Nothing comes for free whether it means investing more money or more time to make more money. This is just a quick guide to give you a taster of some of the things you need to consider if you want to earn more money from your property r properties available for lease.