Tuesday, August 12, 2008

Vacation Rental CASE STUDY


I often get asked a question from new owners, "What does it take to get these properties to be successful?" This is a loaded question! The biggest problem I see is owners do not approach this like a business. I have said this a hundred times. They walk into 2ND home ownership, need or want cash flow to pay for it and never really "dig" into the details it takes to be a success.

That is why we do what we do! We want to show you EXACTLY what it takes to be a success. Owners that are doing this "right" are having record years. People are still taking vacations. No matter the price of gas or the economy or the real estate market, they are still going on vacations. You just have to be in a position to get that business before someone else.

I have had the privilege of knowing a couple from Cincinnati, Greg and Tracy. They wanted a 2ND home in Destin, my neck of the woods, so they came to Destin to view properties and pick one out.

This gave me the perfect opportunity to document what they are doing and how they will become successful. I know Greg very well. So I know he will be very professional and business minded in his approach to setting this new home up. So here goes!

We will follow them every step of the way. I will blog about it and give exact details of what they did right or wrong and we will see the first booking come in and watch as they fill up the calendar for 2009.

We recently blogged about the 10 Steps to Success for Vacation Rentals. We will follow this format and show you each step so you have a blue print of what to do and when to do it. Here is the first step and update on where they are.

1) BUY THE RIGHT PROPERTY TO BEGIN WITH. Greg and Tracy did this perfectly. They have been to Destin. They understood what they wanted as a visiting family on vacation and looked to provide that with the home they purchased. They agreed to try to find the largest home for the money, in the best shape, close to the beach and pool in a family community. They viewed homes for one full day. They settled on one in Emerald Shores. Which is the community I purchased my very first home in. They went to make an offer and it was under contract. So the second choice was a more expensive home in nearby Destiny West. Which is a bit more upscale, very desirable and close to the beach. This home has great character and was a builders own home that was never rented.

Just by viewing it with them, I could tell it would be a great rental. It is only 2 doors from the community pool, it is as close to the beach as they can get in that area. And they agreed to buy a Golf Cart for the guest, making it more attractive and easy to get to the beach and around Destin.

GOLF CART. This is something I want to touch on. High end rentals seem to be doing great in this market. In Destiny West, it is common for the owners to provide a Golf Cart for the guest to use. There are not many rentals in the community. So starting with a great home and then on top of that offering a street legal Golf Cart so your guest can use it for the week is a great way to attract business. Legal work MUST be done to protect your self. Please contact your attorney when doing this. But from a marketing prospective, this is a home run in my opinion. This is the type of thing that will demand more rent and make the difference in booking with you or someone else. Financially it makes sense too. To invest $6,500 into a nice Golf Cart and then increase your rentals by $10,000 to $15,000 a year is a good return.

July 31, 2008. This is the date they closed on the house. They came to Destin to stay in the home for a few weeks to furnish it and get it ready for occupancy. The home was not totally furnished so they need some time and money to get it ready. They took as many pictures as possible while they were in town. There will be more work to do on the next trip, but they are now ready to set up the web sites, get the vacation rental software with http://www.ivacationonline.com/ completed, apply for the merchant service and begin to advertise.

So they have taken the first HUGE step and closed on the property. They have started to complete the home and it is now ready for guest to arrive. They want to make more improvements but this can wait until there next visit. Once we start on the web site work we will continue this and give you the exact details on where we list their home, why we listed, the Search Engine Optimization we will do, the pricing structure plus more! So stay tuned as this new rental hits the market and becomes another great success story! The next step is setting up www.ivacationonline.com and getting the merchant service. We will blog about this soon!