Venturing into any business, especially real estate investment, brings forth a plethora of advice both solicited and unsolicited aimed at guiding you through an effective investment strategy.
When it comes to real estate, there isn’t a single investment protocol but rather a compilation of numerous tested real estate investment strategies.
However, while the short-term rental strategy provides many investors with lots of potential income, and marketing automation, especially when located at tourist destinations, actualizing the potential of short-term rentals requires some key consideration.
This article will walk you through most of them using terms that you can understand.
Let’s take a look at them!
What Is Short-Term Rental?
Short-term Rental (STR) is the act of renting out a well-furnished apartment for a specific period, typically 30 days or less.
This rental service is obtainable in tourist destinations and places where temporary accommodation is in high demand. The apartments are often equipped to meet the demands of the occupants, who are mostly tourists or travelers.
Furthermore, short-term rental strategies are drastically overtaking traditional hotels and motels as a result of their ability to adjust in accordance with time and consumer sustainability levels.
Evaluating Short-Term Rental Ideas
Due to the increased demand for temporary housing, many property owners and investors are deeply interested in acquiring rental homes. Still, only a few survive the changes in tides and time. Why?
Acquiring the potential of this real estate investment strategy goes beyond owning an apartment or series of flats and putting them up for rent.
Exploring the potential of STR involves careful analysis of some key points and putting them in mind for consideration. By analyzing them, you can make room to adopt them in your Investment strategy for effective results.
6 Key Points To Explore The Potential Of STR
Some of these essential consideration points include:
Location:
Determine the location where you want your short-term rental home to be situated. This can be done by simply establishing two important factors:
- The tourist destination in the jurisdiction your rental home is situated
- Your potential occupants
Carefully determining your potential occupants and their preferences will allow you to adjust your apartment settings accordingly, ensuring their needs are met.
In addition, this will also enable you to determine where to acquire a property if you have not gotten one already.
Local Laws:
Before acquiring or setting up any apartment for the purpose of STR, ensure that the area permits short-term rental services. Due to the rise in the popularity of rental services, some cities and countries are increasingly establishing regulations to either limit the services or ban them completely.
In Dallas, a new regulation bans all operations of short-term rentals in single-family residential zones.
Undergoing proper and thorough research of the rules and regulations of any place concerning STR is very important before establishing one.
Some zoning laws go as far as regulating the number of occupants you can accommodate in your rental home per night.
Familiarizing yourself with the rules and regulations will help you to decide whether or not you can operate there (based on the rules and regulations) or if your operations are totally shut off in those areas.
Market Research:
Complete and thorough market analysis will keep you on the right track of utilization effectively. It is the right time to gather insights on your competitors.
While this may be complex as there could be many people offering the same service, try to gather information on your major competitors (the top ranks) and check out what they are doing and what they do differently.
Look into things like their:
- Location
- Their capacity, which includes the number of rooms and bedrooms.
- Unique selling point
- Price level
- Property marketing strategy and style
Conducting thorough market research will help you determine the appropriate rental pricing, avoiding rates higher than your competitors as you’re venturing into the rental market anew.
Marketing Strategy:
Establishing a good marketing strategy can elevate your business in numerous ways.
Several online rental platforms can serve as great tools in creating awareness about your rental home to the public.
Online platforms such as Airbnb, Booking.com, etc bring short-term rental homes closer to potential occupants who navigate their site in search of vacation or temporary housing.
These online means also make booking a lot easier for occupants as they can determine if your apartment suits their preference and make reservations from wherever they are.
Guest Experience:
Understanding the impact of a unique experience on your guests is key to the survival of any rental home.
By carefully noting your occupants’ expectations, you can effectively align your services to meet and even exceed those expectations, leaving them impressed with their experience. But how can you do this?
When an individual makes a reservation, you can either reach out to them or they may contact you to express their preferences for their rental apartment.
During your conversation with them, smartly analyze who they are and what they are coming to the proposed destination for.
Are they business people, who may not have the time to step out and enjoy the uniqueness of their environment?
Are they tourists who want to feel close to the locals of the place? Or are they searching basically for temporary housing?
You can decide to bring the environment to them by adding items peculiar to the locals into their apartment in an artistic way. And strike a good memory in their minds.
Additionally, ensure that your apartments are kept neat and well-maintained. Prompt addressing of occupant’s complaints can be a great way to market your services before them without actually doing it.
Security:
Maximum security is highly appreciated by guests so endeavor to look into the security level of your jurisdiction as well as tightening yours.
Look into the safety profile of the area before establishing a rental home there. This will save you from investing in an area with high robbery rates or other vices.
Wrapping up :
Short-term rental services enable investors and property owners to monetize their apartments effectively. However, exploring the potential of short-term rental homes requires careful consideration for it to be achieved. Inability to ensure these will result in a catastrophic failure.
So endeavor to take your time to strategically penetrate the short-term rental market, and conduct careful market and area surveys before establishing one.