What is the best way to rent and manage your home in the OBX vacation rental market?
- Seek the best rental management company.
- Use online websites like VRBO.com and HomeAway.com.
- Use your own webpage and post video tours and virtual tours.
And the answer is d; all of the above! You have to think outside the box, as the answer is not always from a list.
Although the Outer Banks rental market has been doing great on a macro level and each of these options will produce results, it’s the execution of all three that can lead to greater results. For example, we have an oceanfront home in the southern beaches that was projected to generate $175k annually by one of the premier rental companies in that area. I have no doubt this company would have met our expectations, but by investing a little bit of time and money we were able to have increased exposure from advertising on sites like VRBO, creating our own website www.VacationRentalsOBX.com, putting together a You Tube video and creating a virtual floor plan tour. Together this investment of about $1,500 helped to bring in rentals of over $195k. What’s the big deal?
- That equates to over 500% return on our investment of $1,500.
- The home rented quicker and for more weeks.
- When it comes time to resell…this home stands out with better than average rental performance.
- Let’s look at the Income Valuation approach based on a conservative 8% capitalization (cap) rate.
- Home 1 Income: $140k =$175k – $35k in expenses
- Home 2 Income: $155k = $195k – $40k in expenses
Home 1: $140k / 8% = $1.75M
Home 2: $155k / 8% = $1.94M
Increase in valuation of over $185k
Some feel it’s difficult to manage the VRBO sites. I agree it may be difficult, but ask your Rental Management Company to manage it; many times they are willing because additional revenue means additional profit for them too! Win-Win! All property owners are not investors, so their priorities differ, but it’s important for everyone to understand marketing resources within reach to optimize vacation rental income.
For any other information about vacation rental income optimization, please feel free to contact me at agupta@icrsaga.com.
