How to increase your rental revenue for your Orlando vacation home
When purchasing a vacation home in Orlando you are typically doing it for two reasons. One is its a great place to spend quality time with family and friends but secondly, it’s to generate as much vacation rental revenue as possible. Orlando is a rare market for second homeownership as not only can renting out your spare weeks cover all your operating costs but most owners make a decent profit each and every year. But how can you make more?
When looking to generate more income for your vacation home you need to start looking at the macro factors involved with your home and the community that it is located in.
So what can be done to improve occupancy and revenue during these times?
In order to have a successful vacation rental home, not only do you need a great product at a rate that is in line with the competition, but your home must be seen in all the right places.
Marketing is the single biggest factor in how successful your vacation home is going to be. Most homeowners have their homes professionally managed by a local property manager. By listing with a property manager the software they run their sites on automatically pushes your home onto the large booking platforms such as VRBO, Airbnb, and Top Villas. The trouble is your home is now positioned amongst several thousand other homes that may be similar to yours. So how do you get more exposure and more bookings?
VRBO and Airbnb
Third-party channels such as VRBO and Airbnb both generate a huge amount of traffic and produce a good number of bookings for homeowners and property managers. These companies are owned by large corporations that run off complex algorithms that promote individual homes and owners who solely rely on these channels. This makes ranking your home in any significant position fairly difficult and so bookings from these channels can be limited.
Top Villas is not a property manager but a vacation rental marketing and reservation specialist. Top Villas provides a large number of bookings for many property managers in Orlando, especially in Reunion Resort, Encore, Champions Gate, Solara, Solterra, Windsor Hills and Windsor at Westside. Top Villas works very closely with our property managers to help book out their homes and we often work closely on joint marketing campaigns to help boost bookings. But many owners are looking for more.
Top Villas Market Boost
Top Villas does have an exclusive program known in the industry as “Market Boost” where select homes are given preferred rankings, boosted marketing across all platforms including their Travel Agent portal www.luxuryvillarentals.com as well as increased social media exposure and sales agent incentives. If you have any interest in increasing your bookings speak with a Top Villas marketing representative today. email@example.com
Activate Dynamic rates
Dynamic rates are set to become the future of vacation rental and yield management. Hotels have been using dynamic rates for years and so have airlines.
What are the dynamic rates?
When you go online and book a hotel or flights you will notice how each day is priced differently and the rate also changes depending on which date your search. The principle behind dynamic rates is to work out when people are most likely to book your vacation home. For example, if a week during September saw extremely low traffic as well as a large number of vacation homes available the dynamic rates algorithm would adjust your rates lower to attract a guest to book your home. On the other hand, during busy weeks such as Christmas and New Year and school holidays when search volume increases and homes are almost always 100% booked the price will increase to a level customers are still willing to buy at. This is a classic supply and demand strategy.
The potential to maximize not only your weeks booked but also generate the maximum rental revenue possible by using actual relevant guest data rather than guesswork.
Unless every home in your community is using dynamic rates you may find your home is priced higher than a similar competitor’s home and potentially lose out on the booking to them. may price your home too high for the market, and so will eventually need to offer a discounted dynamic rate to fill the calendar.
Guests may get frustrated when each time they look at your home the rate changes for example if you received a quote last week for $4000 but today you look and the price is now $4950, someone is going to get upset. This could discourage them to book.
Overall Dynamic rates are certainly a great concept, however, in our opinion we will only fully see its advantages when every vacation rental company is using the same dynamic rate structure. It also leaves you wide open to competition coming in and offering a lower price for the home. If you own a large custom home then by all means your home may be a great fit as it’s unique and people will pay a premium. If your home is a cookie-cutter home with many homes similar to yours on the market. Then unless your home is extra special the price will end up being the determining factor.
Dynamic discounts are one step behind the Dynamic price structure. But is our view a much more customer-friendly approach to maximizing yields and returns for homeowners. Homeowners set their seasonal rates based on higher demand level dates such as spring break, summer vacation months, Easter, Passover, Christmas and New Year etc. Once set you as the owner know what to expect, rates will never go up, but once you reach a set date typically 8 weeks before the guests stay discounts start to get applied to the rates. The discount can increase the closer you get to your empty weeks encouraging guests to take you up on this great offer.
You know exactly what you get throughout the year but offering a small discount helps to fill up those not so easy to book last-minute dates.
You will never 100% know exactly what dates are seeing a spike in demand.
Use your home’s downtime to make improvements to your home.
One thing is for sure, bookings will return to normal in the very near future, so why not take this opportunity to make some improvements to your home to help keep your home renting for years to come. By upgrading your home now will hopefully mean you can rent your home more and for higher rates moving forward.
Upgrading your home
Possibly the single biggest thing to impact your home’s rental potential is it’s appeal to paying guests. If your home has old and outdated furniture, do not expect top dollar nor a full calendar. Homes that do not keep up with the times will eventually see their booking levels and income levels gradually fall. By upgrading your home gradually each year you will increase the lifespan of high-value bookings without the need to overly discount. This will lead to higher returns over the lifetime of your property and will also make it much easier to sell when that time comes.
The biggest return on revenue via upgrades
When coming to Orlando, most guests are coming with guests, they come to Orlando as there is plenty to keep all the family entertained for their entire stay. No guest wants to stay in a vacation home with no amenities.
Make sure your home has a great games room if your home has a garage that has some carpet and a pool table on top of it, perhaps it’s time to re-think and spend a few dollars on improving this vital space. You can still use the garage just to make sure you renovate it properly, add in some fun arcades, put in larger TV’s and just make it as fun as possible.
Movie rooms are great for generating bookings, they look great on the photos and when guest are looking to book a home think to themselves, “isn’t it going to be great all watching a movie together” in reality when they get here everyone will want to do their own thing so only a handful of people are going to end up using it however the appeal of a cinema room in 2020 is almost as important as having a swimming pool. If you don’t have a dedicated space for one, then use your unused garage to create an amazing movie room.
Themed rooms have gone from simply throwing a Mickey Mouse cover on the bed to having full-blown 3D printed characters, spaceships, slides, and more. Orlando has some of the most insane themed rooms out of any vacation home. Due to this before you start on your theme room journey, consider what homes you’re competing against and then choose a theme room based on the return you expect to get.
Unfortunately, taste and styles do change, most guests wish to stay in a clean, fresh, and modern home. If your home has its original furniture and is dark and dated with heavy drapery, it may be a great time to look into refreshing your home’s style to bring it more in line with today’s trends.
Upgrading your home is going to be costly, however, you will quickly make up the difference with more bookings, increase rental return and happier guests. You are also able to write off all the upgrades and furnishings against your taxes and you will have just increased your homes selling value from forced appreciation. We often see homes sell for around $550,000 without any upgrades, get upgraded by the new owner for around $80,000, and then sell for over $720,000.
Your home is always going to look fresh and current and will maximize your rentals for a longer period of time.
The cost, upgrading your home is going to cost you money but will be more than made up for by the additional income your home will keep generating.
How to save money
Just like with any business, to maximize your vacation rental revenue you should always look at cutting unnecessary costs as well as increasing bookings. Most fee’s within the vacation rental industry are pretty standard such as property management, property taxes, and utility bills however there may still be a few ways to maximize savings and revenue.
Many of the bigger property managers now pass all cleaning fees into the guest. This means that all your cleans should be paid for from the guest regardless of the number of nights booked keeping more revenue in your pocket. Saving on cleaning fees can make a huge difference to your bottom line.
Make sure your home has WiFi-enabled smart solutions such as remotely controlled WiFi AC and pool heat. This will allow AC to be turned down when the home is vacant saving you money on your electric bill each month.
Remote-controlled pool heat
Pool heating costs can run up pretty quickly especially if your home has a gas heater. By setting up a remote-controlled system will allow for the pool heater to be turned off automatically in line with when the guests vacated your home leading to optimized pool heating expenses.
Take advantage of empty weeks
Sign up to ThirdHome where you can exchange your empty week for “keys” you can then exchange these keys for stays in other beautiful luxury homes all over the world for a minimal processing fee of around $500. Options include beachfront mansions, ski chalets, private islands, and more. For more information please see here.
We hope you have found our article helpful and hopefully you can take action on some of these ideas to boost your vacation rental revenue. You may also like to read our blog on “how to renovate your vacation home”