If you’re a vacation rental owner, then you’re already on the leading edge of what a landlord can become. But don’t get comfortable just yet – not if you’re interested in growing your net income.
For the sake of boosting your inventiveness, remind yourself that you’re sitting on an iceberg of ignorance. Always assume there’s a tremendous amount of potential that you aren’t accessing. I’m sure you would take action if you knew what to do, but it’s not that straightforward.
For the past six years, I’ve been trying to expand my own understanding of what’s possible. And even though I haven’t reached a point where my small apartment building spins off enough cash flow to cover all of my family’s living expenses, I have collected some tactics that might benefit you.
With that said, I offer the following expense-reducing, cashflow-increasing suggestions:
1. Create a mixed-use property
Consider dividing your property and adding mini-storage units, miniature billboards or other amenities in a way that doesn’t affect your guests. Apply your entrepreneurial creativity to your entire property and fence line too. There might be a way to monetize the vehicle and pedestrian traffic that passes by. Find your rental’s mixed-use potential and make the most of it!
2. Take advantage of bulk discounts
We often accept paying full price for materials and services simply because we don’t want to cooperate with neighbors. We real estate investors love our independence. However, when it comes to cutting expenses, working with a group is much more profitable.
Whether it’s annual gutter cleanings, snow removal or septic tank cleaning, you can realize a significant savings if you arrange for a vendor to service your group. The goal should be to eliminate your personal cost in exchange for managing the group transaction. Can you create a bargaining group to reduce your routine expenses?
3. Build an equipment closet
Whether your vacation rental is on the beach, in the mountains, or city suburbs, you can secure kayaks, snowshoes, and bicycles in a small room with a digital or combination lock. Then offer your toys to your guests! If they want to rent your equipment, they can simply PayPal you an additional fee and you can text them the lock’s combination – it’s as easy as that.
Don’t under estimate the benefit of upselling. After all, there’s a good reason why Disneyland continues offering you things after you’re inside the park. Take a hint from Walt, create upsell opportunities that will delight your guests and give your property the wow factor.
4. Modify your property tax classification
One example of this concept is beekeeping. Beekeeping is strongly encouraged in many areas. In fact, if you place the minimum number of hives on your property, it can be considered agricultural land and taxed at a much lower rate. With the growing popularity of urban agriculture, new incentives are being adopted each year.
A less expensive tax classification may also be obtained with the right ratio of fruit tree. And, unintentionally, the trees might become a major reason why people decide to rent your vacation rental in the first place. Do your local ordinances allow for these property tax options? Check them out and see if you can save a few bucks.
5. Offer car rental
Many vacationers rent cars upon arrival in a destination. So how about offering guests use of the car that’s inside your garage? Online services like Turo handle the paperwork and roadside service hassles for you. And the extra $40 to $70 per day makes this amenity a profitable option with little effort. Since adding a car (especially one with a residential parking permit) can make a lackluster rental more attractive, it’s definitely something you should consider offering to guests looking to explore the nearby area.
Increasing your awareness of your business’ untapped potential is the first step towards making more money on sites like Airbnb. Your second home can be monetized in so many clever ways. Plus, there are countless ways to slash your expenses – so you really do have a world of possibilities to explore!
But here’s the catch; you have to stretch your beliefs. You have to believe that your rental can earn much more than it currently does.
Al Williamson is the man behind the LeadingLandlord.com website. The weekly blog helps landlords with innovative ideas to up their income and cut back on spending. He shares evidence of his own vacation rental experiments as well as all kinds of practical real-life advice for owners.
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