In 2021, short-term rentals earned a record-breaking average profit of about $56,000. Can most short-term rental owners expect to make this much in a year? How much of this is profit and what needs to get reinvested?
Working with a company experienced in VRBO management can maximize your profits. However, there are still many factors that can impact how much money vacation property investors pocket.
Read on to learn more about what will impact your short-term rental income and ow a VRBO management company can help.
Location
The location of your rental property is going to have one of the biggest impacts on your ability to turn a high profit. Consider your proximity to top Naples attractions. When you're in or near a popular tourism spot, you can generally charge more per night and keep a steady stream of guests.
Amenities
It's no secret that short-term rentals have taken off in the past few years, and competition is steep in popular destinations like Naples. When you offer desirable and luxurious amenities, you can attract guests who are willing to pay more. However, you need to make smart, strategic investments when upgrading your property and stick to value-add improvements.
Marketing Strategies
Using popular rental platforms like VRBO will give you access to a built-in market of interested vacationers. Even with this access, it's up to you to really sell your property to avoid long vacancies. High-quality photos, detailed descriptions, and a unique selling proposition will help you attract renters in the face of steep competition.
Competitive Pricing
Stagnant pricing is going to hurt your ability to turn a profit. Dynamic pricing, on the other hand, ensures that you're maximizing profits during peak season and remaining competitive when tourism slows. In addition to shifting per-night pricing throughout the year, you should also reevaluate additional fees from time to time and adjust for inflation.
Overhead Costs
When you're managing a short-term rental, there's a big difference between gross and net profit. You'll always need to reinvest a portion of your profits to cover the cost of:
- Property taxes and mortgage payments
- Insurance
- Maintenance
- Cleaning
- Marketing
If you hire a property manager, you'll also need to pay property management fees. In turn, property managers can help you grow your gross profit while minimizing overhead costs.
Guest Satisfaction
Great reviews can earn you a spot as a top host on your rental platform. This gives your listing more visibility and generates trust with anyone planning their next vacation. The vacation rental owners who earn the highest profits always have high guest satisfaction.
Call PMI Gulf Coast for Better VRBO Management
Naples homeowners are smart to turn to short-term rentals as a source of income. How much they stand to make reflects everything from location to management style. If you're ready to skip the trial and error and go straight to generating income, you're ready for the PMI Gulf Coast approach.
PMI Gulf Coast is a leading short-term rental and VRBO management company in the Naples area. We combine PMI's nationally tested approach with our Naples real estate expertise to create fool-proof strategies. Contact us to learn more about the difference PMI Gulf Coast can make.
