7 Ways to Increase Your Rental Home’s Profitability
Is your Santa Teresa vacation rental making as much profit as you were hoping? If not, you could be making some common mistakes that dampen your home’s earning potential. Here are seven easy-to-implement strategies to improve your rental’s bottom line.
1. Make it available
When you love your Santa Teresa rental home, it’s difficult to give it up. YOU want to spend time lounging by your pool. YOU want to share the lush natural beauty of the area with your friends and family members. This is all fine and good…but doesn’t do much for your home’s profitability. It may be tempting to hop on a plane the next time you have a long weekend, but each time you do, you’re taking your home off the rental market. On the days you occupy your home, you’re essentially making $0. Now, this isn’t to say that you must stay away from your vacation home—it’s yours after, all. Just keep in mind that if your profitability is suffering, it would be wise to make sure it’s open for guests more often.
2. Charge a premium during the holidays
This one’s a no-brainer. Hotels, airlines and car rental companies all understand that there are a few periods during the year that guests will gladly pay a premium. Make sure your property is available (see #1 above) and that your per-day prices reflect at least a 25% increase during the following periods:
· The week leading up to Christmas
· The week between Christmas and New Year’s Day
· Holy week (the week before Easter)
3. Track your expenses compulsively
Like any business, rental properties require expenditure to remain operational. However, things can seem a little mysterious when you’re not sure where, exactly, all that money has gone… Be meticulous about every colón you spend. Seemingly inexpensive items—like tanks of gas for the stove and drinking water bidóns— add up when you replace them regularly. Not to mention major expenses like repairs, property taxes or renovations. When you know how much you’re spending, you get an accurate picture of your rental home’s profitability.
4. Draft a budget—and stick to it
Decision making becomes much easier when you’re operating within a clear framework. It might be tempting to pick up a stunning art piece from a local painter, but impulsive spending can drain your property’s profitability. Work with your rental property manager to establish a budget for the season. Based on recurring expenses, past maintenance costs and projected upgrades, you can chart a clear course for upcoming expenses that will help you balance your choices as they arise.
5. Invest in high quality photography
Your home might have all the charm and beauty in the world, but if prospective clients can’t see it from your online posting, you’re likely missing out on valuable business. Santa Teresa has many talented photographers who have the correct equipment and experience to showcase your home in the best possible light (literally and figuratively). Dedicate a serious portion of your marketing budget to scheduling a photoshoot that covers all aspects of your rental home, both inside and out. Your property manager will help you coordinate the photographer and staging services that will make your home pop.
6. Refresh your decor
If you have owned a Santa Teresa rental home for awhile, bear in mind that your property is competing with other homes that have been built—and therefore, decorated—more recently. Frequent aesthetic updates (every 3-5 years) keep your home looking fresh and attractive. We’re not talking major upgrades or renovation work. Instead, focus on all the things that aren’t bolted down: chair pillows/cushions, bedspreads, lamps, bathroom accessories, wall art, dish ware… Updating these items can transform the look of your home without a major investment.
7. Hire a property manager
It’s tempting to think that you can handle the management of your Santa Teresa rental home on your own, but things can get tricky, especially if you spend much of your time in your home country. A property manager takes a professional approach to overseeing your home. Not only does a manager track all of your expenses, they can apply an objective eye to all the ways that your rental home might be falling short of its potential. They will help you organize improvements and check them off the list. Local property managers also have connections in the community to secure maintenance & repair services, home décor, and other vital supplies. Their expertise saves you the headache—and extra expense— of trying to oversee your rental home from abroad.
Owning a Santa Teresa rental home is definitely not a “get rich quick” scheme. Instead, it’s an intelligent, long-term plan to steadily grow a business. Step back and evaluate your profitability from multiple vantage points. Look at occupancy, per-head income, and profit margin on a monthly, quarterly, and annual basis. By understanding what you’re spending and what you’re bringing in—per guest, per month, per week, per night, etc.— you can shift from ad hoc decision making to a proactive approach that continues to build profitability year over year.