Buying and owning a vacation rental property is one of the best ways to increase the cash flow of your monthly income. In addition to that, it’s a great vacation home for you and your friends and family if and when you all need a break from life’s stressors. Plus, if you’re serious about getting deeper into real estate investing, it’s a great way to diversify your portfolio.
For those who are doing it to increase your monthly cash flow, you’ll keep the property clean, invest in comfortable and welcoming decor, and provide all the necessities to make your guests feel at home during their stay in your property. Now, for those of you trying to diversify your portfolio, you’re going to put a little more into each property you own. And by putting more into it, we mean you’ll be taking on some high-value renovation projects that will increase the value of your rental.
With vacation rental property management, most property owners will rent them out on a per night rate, and because of that, you have the potential to earn considerably more versus investing in a long-term rental property… That reason alone is why vacation rentals have grown significantly in popularity.
The reason vacationers have been so drawn to vacation rentals is that they want the “home away from home” experience that you just can’t get at hotels. As a property investor looking to not only diversify your portfolio but also increase your monthly cash flow, you’re going to need to take on some high-value renovation projects and incorporate them into your properties.
Now, some of your properties will need certain renovations that others don’t simply because the homes came with those home upgrades when you purchased it. But for the homes that lack in areas where your other properties don’t, you’re going to need to add these high-value renovations to significantly increase the value of your property, which will then increase the return on your investment.
High-Value Renovations to Incorporate in Your Vacation Rental Properties
Deck or Patio Installation
Maybe one of the properties you own has a decent-sized backyard but the grass is patchy because it’s a warmer climate area and overall, the yard could be utilized more efficiently… A backyard like that will drastically increase the value of your property by having a deck or patio installed.
Most people tend to get this aspect of vacation rental properties all wrong with the mindset of focusing more on upgrading the interiors of the home versus the outdoors. What people fail to understand is that for the most part, when people go on vacation, they go to warm locations just so they can be outdoors.
By adding a deck or patio to your vacation rental, you’re not only giving guests an indoor living space but you’re also giving them a great outdoor living space as well, that’s great for entertainment ideas and plans.
This time, let’s say you bought a property in a sunny state with a large backyard… The renovation ideas are endless… But because you bought a property in a sunny destination and it has a large backyard, the only financially reasonable thing to do is to have a swimming pool installed.
The reality behind vacations is that people love being outdoors. In fact, according to travelagentcentral.com, 23% of Americans prefer traveling during the winter. But guess what… they’re traveling to warmer climate areas. Do you know how many people living in colder climate areas will travel to certain parts of Florida in the winter months and rent an Airbnb property just to go swimming in the middle of January? A lot of people do it.
So investing in a pool, especially if you buy in a warm climate area like Florida, Texas, or Arizona, is going to drastically increase your monthly cash flow.
Aside from travel accommodations, food can be the next most expensive travel expense on vacations. This is where vacation rentals come in handy because guests can cook their own meals. You would think that people wouldn’t want to cook while on vacation but because they’re on vacation, and it’s not their kitchen, most people don’t even mind cooking. Plus, lots of people don’t trust the cleanliness of restaurants or they have dietary restrictions and just prefer to make their own meals.
Knowing this, the kitchen is a major common area of your property that needs all the bells and whistles. Everything from a dishwasher and recessed lighting to hardwood floors and a spray faucet head, you need to make your guests feel like they’re cooking in a professional-grade kitchen and they experience nothing but ease and convenience while cooking.
There are more important renovations and upgrades you can incorporate in your rentals but the kitchen and outdoor entertainment are some of the highest selling points that attract vacation guests the most. If you focus on these three upgrades and installations first, your rental will stay occupied with little wiggle room in between.