The first year of a vacation rental: a success story
Written by: Keith Wachter - iTrip Vacations Orlando Business Development Specialist
The first year of owning and managing a is undoubtedly the hardest year for everyone involved. Many times, the home has to be updated or needs maintenance work to be performed, which in this example is explained in the next paragraph. The property has no reviews, has no future bookings, etc, making it difficult to create bookings and generate reviews for the home. This is because travelers are concerned that the property is not legitimate and don't know whether what they see in pictures, is truly what they'll get when they arrive. In this blog, I dive into a few things that make that first year difficult, and one particular property that excelled in it's first year, despite the challenges.
In April of 2019, when we first picked this property up, we were able to take a look around. The house was rough to say the least, but we were the boots on the ground for the owner who bought this property sight unseen. Our team went into the property and performed a thorough inventory and inspection of the home. Outside of the obvious items such as flooring and paint that the property needed. The carpet was old and dirty and smelled musty. It was worn down so much in the master bedroom, that you could see the subfloor at the threshold of the sliding glass doors leading out to the pool. The previous owners of the house simply covered it up with a floor mat! here were many other items we found that the property lacked such as kitchen utensils, linens, and other basic necessities for guest stays.
We took our list from the inventory and inspection, and generated multiple quotes for our homeowners to replace the tired carpet with laminate plank flooring, repainting the home, and even replacing and assembling new furniture. We met vendors at the house for all of these appointments, since the owners lived out of state.
While we helped the owners coordinate and install a various amount of items, we also got to work marketing the home to begin taking bookings. We actually began marketing the home before the property officially closed. This is a bit risky for a management company, as the closing date often times is moved and can alter a booking, but it is key to the initial success of the property. We generated a detailed description, established rates using a number of data points within the market, and took preliminary pictures of the home to get things going. It wasn't long before the bookings started to roll in.
When first inspecting this property, we realized it was exactly as I explained above as a "square one" type of situation. The property went from having no bookings, to generating over $32,000 in gross rental revenue in one years time. This was generated with average nightly rate of $159/night and occupancy over 60%!
One of the reasons we've been able to have such fantastic success with this property, is that in less than one year, we've generated 8 reviews all of which are five stars! As we continue this trend, we have no doubt that we can continue to increase the nightly rental rate, and continue to increase the occupancy of the home.
If you've spoken with me, you've heard me explain how vitally important getting good reviews is to the success of each vacation home. This example does nothing but further prove this point. Had we not had any reviews for this property, our occupancy rates and average daily rates for the property would absolutely be lower than where they are today. We're so appreciative of all of the reviews and feedback we receive from our guests, homeowners, and real estate partners everyday.
It's important to note that it took all of the initial work that I previously explained to get to the point of having 8 five star reviews. Without a proper inventory and inspection, updated accommodations, and intensive marketing, there are no quality bookings and no five star reviews. It's like the iceberg example. Everyone in the boats or on land looking at the icebergs in the water only sees the top 10-20% of the iceberg. The real significance and heart of the iceberg is what lies below the water. We focus on the little things that often get overlooked so that the guest experience is truly incredible, and to continue our success in the long term.