We are all aware that the short-term rental marketplace is very competitive. Having an edge in the short-term rental marketplace and staying ahead of the competition can be challenging but achievable when you use the right strategies.
While it is clear that the short-term rental game has got highly competitive in recent years, with companies like Airbnb having more than 6 million listings worldwide, it has become essential for rental investors to up their game.
They should look into both the investment approach and their marketing strategy to attract potential customers and soar in profits. In this blog, we will talk about five ways to gain from your short-term rental investment.
5 Ways to make the best out of your short term rental investments
#1 – Make intelligent decisions about where you buy your properties
Making intelligent decisions about where you buy your properties might sound like no-brainer advice on the outlook, but it is easier said than done. When it comes to short-term rentals, you must know that not all locations are created equal, and some properties in specific areas always have a competitive edge over many others.
There are no hard and fast rules around what kinds of locations generate profit margins. According to 2018 housing market data, it is seen that there is a negative correlation between home prices and gross revenue generated.
This means to say that the houses in high-demand areas like Seattle, Hollywood, and Portland are some of the places that bring in the slimmest profit margins in the country.
What are the excellent spots, then? Instead, the profitable sports are in smaller cities like Tennessee, Palm Springs, Florida, and Gatlinburg, where investors can make and upwards of 100K dollars per property annually. Sounds interesting, right?
Conducting a rigorous data analysis and consulting real estate experts to make intelligent decisions about where to buy your property cannot be emphasized lesser.
As the old saying goes, the one big secret behind real estate investing success is – location, location, and location, and so you shouldn’t afford to get that wrong. Shelling out a few dollars in exchange for expert real estate advice is always worth it.
#2 – Price your property listings right, and amend them from time to time as needed
In the short-term rental world, fixing up rates is never a set it and forget it kind of deal. To succeed in your rental listing pricing strategy, your best bet would be to have a dynamic pricing strategy in place which takes into account the timing of the local supply and demand into consideration.
By now, you must have figured out that companies like Airbnb have built-in tools which will help you to adjust pricing based on the local demand automatically. If you want additional data or want to adopt a more customized approach, you can always use outside pricing tool software like Price Labs, AirDNA, beyond pricing, and the like.
Ensure that you look into the pricing of your commercial real estate listings from time to time and ensure that your property’s pricing is always in tandem with the market prices.
#3 – Prioritize marketing in the off-season
While most commercial real estate investors give up on the idea of marketing in the off-season, you must know that it is easier to rake in profits when your beach house is in high demand.
However, that does not mean to say that you cannot make any profits in the off-season or that you should not be prioritizing your marketing efforts. While most of your competition isn’t going hard on marketing in the off-season, being there and getting your marketing strategies right can help you stay ahead in the game and keep those bookings rolling in.
One of the best strategies to prioritize marketing in the off-season is to focus and capitalize on local events to draw the eyes of travelers or Digital nomads who are looking out for unique experiences to enrich their stay at your short-term rental.
Ensure that you tailor your listing descriptions and add catchy pictures that capture the essence of local events so that travelers know that you are offering something unique and authentic.
You can also reach out to the organizers of local events and requires them to recommend your face or also include you in their brochures or websites in exchange for small brokerage fees or commission. You be surprised to know that many local event organizers will be pleased to do that for you.
#4 – Indulge in upselling your services to your existing customers
While it is easy to get lost in finding new customers, many investors never think about selling their services to their existing customers and bring in more business from the client base they already have. You will be surprised to notice that most of your customers will be interested in buying more from you if they are pitched about it.
For example, suppose you have a couple of tenants living in a shared room in bunker beds. In that case, you can upsell some of them to buy your single premium room or double sharing room by providing some discounts to them as there are already your existing customers.
You may be surprised to see that your current customers are already accustomed to your premises, and the location – and they would be much happy to buy an upgrade of place from you which can mean more business for you.
#5 – Do not underestimate the power of repeat customers
If there is one thing that will help you in soaring profits in short-term rentals, it can encourage your existing customers to become your repeat customers or extend their stay with you. The process of converting your current customers into loyal customers shouldn’t end at just pitching your idea to them or providing them discounts.
You must realize that we live in the digital era now, and almost every other short-term rental business will be providing such advertising discounts. Thus, it would be best to stand out and have a competitive edge if you did something different.
People who rent short-term rentals often seek meaningful and authentic experiences and a stellar stay that goes unsaid. Spending some time on how you can creatively turn your existing customers into your repeating customers might give you a list of ideas you can explore.
For example, you can provide friend discounts to provide your guess discount course or some referral points to encourage their friends or colleagues to your short-term rental stay.
Similarly, you can conduct small events for or arrange small meetups in the evenings for your customers where they can probably meet in a common area and indulge in cultural experiences like cooking an authentic local dinner meal together, playing cultural or folk music that’s unique to your location and so on.
In essence, you must understand that you should go beyond providing small discounts and think of creative or innovative ways to enrich your customers’ experiences, which will then persuade them to stay longer with you and bring their friends and colleagues to your place.