The opportunity to receive a stable passive income without much effort is one of the main dreams of homeowners, because of which they decide to build an ADU next to the primary residence. However, the short-term rental business is not as simple as it may seem at first glance.
To start earning rental income, a property owner needs to do a lot of work with documents, prepare for a comfortable stay, find good tenants, and attract them to his ADU to reach a profitable vacation rental agreement.
In this review, we will tell you how to distinguish your short-term rental property from other accessory dwelling units, what tactics attract tourists from all over the country, and also share information on how to influence the guest's desire to extend the short-term rental contract.
One of the basic rules of a short-term rental business is to create ideal conditions for tenants. This process may require additional investment. However, a homeowner should not consider this as a monetary loss; on the contrary, the welcoming atmosphere can become a reserve for long-term rentals.
Here are five tips that will help you form a good mood of tenants:
All rental properties have cosmetic flaws, e.g., chips on doors or laminate flooring in bedrooms, or scuffs on walls. All this can spoil the first impression, so it's best to get rid of these minor flaws.
It's hard to imagine a more unpleasant situation when a property owner claims a working Wi-Fi system or powerful ventilation, but in fact, they turn out to be non-working. In order not to cause resentment among residents, check the technical operability of all components of the house.
Your accessory dwelling unit will become a new house or apartment for residents, even for a short time, which means everything in it should be new and fresh. In this regard, if you have an old, worn sofa, a creaking chair, or a wobbly table, then replace them with new models.
Short-term rental units without decorative elements will seem naked, which means a lack of coziness. Do not skimp on decorative items such as vases with flowers, posters or paintings on the walls, figurines on shelves, or colorful pillows or blankets, because residents do not expect to see them. However, they will be pleasantly surprised when they find such an interesting and aesthetic space.
All property owners keep their primary residences clean and tidy. The same rule applies to ADU because as soon as your tenant crosses the threshold, the first thing he will pay attention to is cleanliness, and dusty lumps on the floor or shelves will definitely not please him. Do a general cleaning of your short-term rental property to show respect to the guest.
Overall, all these techniques are very simple to implement. However, homeowners should understand that they help not only attract tenants to their short-term rental property but also increase their monetary value in the real estate market.
There are many small but pleasant moments with which you can fill your vacation unit to level up the mood of guests who are renting your ADU. For example, add smart accessories for cooking delicious dishes in the kitchen, a set with all the elements of personal hygiene and bright towels in the bathroom, board games in the children's room, karaoke or a game console in the living room, and much more. All these attributes will make the guest happier, and most importantly, their cost will pay off with a rental profit.
Each of us has heard the phrase "great customer service," but what exactly does this mean, and how does this concept apply to various forms of short-term rental businesses?
If the world stands on three turtles, then there are also three main factors at the heart of good customer service:
In sum, if the property owner complies with these short-term rental rules, which are related to customer service, then in 99 cases out of 100, he can build a mutually beneficial relationship and extract as many benefits from cooperation as possible.
If you want to rent out your ADU, then the most powerful tool today is social media because millions of users open them every day. Nevertheless, the real estate market is very competitive, and in order for you to stand out favorably against other accessory dwelling units, you will have to prolong a lot of work and even make an investment. Firstly, submit material about your ADU for vacation rentals with every detail and provide an interesting story where you will tell about unique facts, functions, and other amenities. Secondly, be sure to attach photo and video reports in a 360-degree format. Third, for more coverage, you can place ads on listing sites.
Discounts and promotional offers are the most effective ways that help to attract customers in any business, and the case of short-term rental properties is no exception. Very often, homeowners cannot find tenants because they think that promotions will lead to losses. However, they do not know the basics of marketing because even the smallest short-term rental investment will lead to an increase in demand for your ADU, and instead of changing tenants every week, you can sign a profitable contract even in the off-season.
There are many strategies, but the most profitable are the following:
It is important to remember that if information about these discounts is publicly available, then you will form a high demand for your ADU compared to other offers in town, and reservation for the vacation period will be guaranteed.
A rank of your ADU in various housing search aggregators is a very important component of a successful business; therefore, by analogy with a taxi, you can encourage guests to leave a positive review about your living space. It can be anything, a small discount of a couple of percent or a delicious compliment in the format of a fruit plate and a bottle of good wine. In addition, do not forget that a high score will have a positive impact on the overall property value.
All short-term rental owners who rent out ADU know that the basis of success is the maintenance of living space in cleanliness and order.
In the course of the preparation of ADU, you can do the following:
On the whole, you don't need to be a visionary to predict that dirty and unkempt short-term rental properties will scare away guests and encourage them to make a booking request in favor of another ADU.
Once again, it is very important to emphasize the importance of well-established communication between guests and property owners. This factor has one great value, namely that it will be much more convenient for you to manage the process and solve any unexpected problems asap. To achieve a good level of interaction, choose a common convenient messenger, always be in touch, and also do not ignore calls even if they come at a bad time, because if you are always ready to respond, then guests will definitely appreciate such an attitude.
Being a caring property owner and knowing about all the unusual and original places in your city, you can share this information with guests because, in most cases, these are tourists who are not familiar with but are willing to visit local attractions. You can tell the family, friends, or a young couple who rents your ADU about the places they can visit, reveal their benefits, and even take them there because all these tokens of attention will help create a strong and trusting business relationship.
If you want to accommodate the same guests in your ADU or house, then you can create a loyalty program specifically for them because an individual approach has more value than money. In such a program, you can include a priority right to submit a short-term rental application, a discount for the first month, or include additional amenities. After this, a family or some other person will pick yours and not other rental units.
All property owners who are engaged in the vacation rental business know that the most basic thing you can do to attract tenants is to provide a high level of maintenance of living space, implement customer wishes, introduce a discount system, promptly answer all the main and additional questions, as well as please people with extra amenities and be honest and open in negotiations.
The implementation of discounts is the best short-term rental investment because it will give you a lot of benefits; in particular, it will attract the attention of tenants from most cities in the country and will allow you to extend the short-term rental agreement, which means you will get a stable income, and will also form an excellent reputation that will permit you to skip all the next steps in negotiations and successfully run a short term rental business.
In order not to search for guests in a hurry and provide more demand for your rental property, you can launch an advertising campaign, e.g., place ads on listing and booking sites, talk about the possibility of ADU reservation for vacation on social media, or launch your own website to become the most influential businessman in the real estate market. The most important thing when you interact with customers is not to break the law because if the renting process has violations, then there may be unpleasant tax implications and fines.