Whether you already own your vacation home in Mexico or are thinking about investing in a vacation rental as part of your real estate portfolio, you might be wondering if you can actually make money off of your rental. Here, we will explore the idea of making money in real estate from a vacation property rental and provide you with our top tips on how to make money from your vacation rental.
So, can you make money? With visitor numbers exploding in Mexico during and as a result of the pandemic, Mexico has become a home away from home for many people. Yes, you definitely can make money from your vacation property rental. Here are our top tips to be sure your rental makes you money.
Hire a property manager.
Unless you plan on being present and physically close to your vacation rental and doing all of the work, you should hire a professional and efficient property manager who makes your property their priority. You need feet on the ground and someone available not only in case of emergencies, but to provide guest services. You need a friendly contact for your guests.
Bayside Vacations offers property owners in Huatulco property management services at a competitive price. Their goal is to ensure your property maintains its value and stays in tip top condition each season. Bayside is a full-service property management company. They provide not only physical services like pool and interior maintenance but also a full menu of services like utility and tax service payments, HOA management, and monthly accounting reports to name just a few.
Make sure your cleaning is systemized.
Develop a turnover and intermediate cleaning checklist. Follow the checklist or hire a property manager who will manage cleaning for you. But make sure it is systematic. This will make sure your space is always clean and that your guests are satisfied.
Identify your ideal guest.
By identifying your ideal guest, you will define how you want to work. Do you want to provide long or short-term rentals? Do you want to only provide short stays at high daily rates? You can do that but be prepared to work hard with frequent turnovers.
Do your market research or hire a marketing consultant to assist you.
What are your benchmarks? What are other rentals of similar characteristics going for in your area? Set your pricing according to your market and according to your operating costs. Be sure to consider platform fees or listing costs, commissions, cleaning service, turnover fees, maintenance, and taxes as part of your operating costs and anything else particular to your property.
Use multiple platforms for promotion.
You can choose to list your vacation property with your local vacation rental agency like Bayside Vacations and on different online platforms like VRBO, Airbnb, Booking.com, Expedia, etc. Do your research. Check their reputations and user reviews. Talk to other owners about their experience. Check the advantages and disadvantages of each for your property. Check any listing fees and mandatory policies. If you are just beginning, it is a good idea to list with one or two agencies and see how they work.
When you work with a local agency, you will be able to talk with a real live person! Some of the online platforms do not even have customer service phone numbers these days. Look at how they solve owner issues before you sign up with them. When you feel comfortable managing these agencies, then add another. Just don’t bite off too much at the beginning if you are managing your rental reservations yourself. Or let your local agency handle your reservations. They’re experienced, have built up a reputation over years and will get reservations because they are already very visible in the vacation rental panorama.
Creating a high-quality listing takes time. Think about what makes your vacation property unique. Do your market research. Take the time to write a good listing.
Create an eye-catching listing headline or title.
On those platforms where you can write your own description, start off with an eye-catching headline that includes the best features of your place and as many features as the space allows. Include emojis if possible.
Write an appealing property description.
It is key to have a well-written description for your rental. Some platforms let you write the description yourself and others generate a listing based on amenities, services and location. If you are writing your description, list all amenities. Include as many details as possible. More information is always better. Be sure to take advantage of this space to list any services you offer like airport pick-up or grocery stocking.
List absolutely any and all extra charges or fees. People will not mind paying for extra charges if they know it is extra from the get-go. No one likes surprise fees, intended or not. Also, if there are any negative aspects about your property, (noise on Saturday nights, for example,) be sure to mention these. Being upfront lets guests know these things and that you are honest.
As a final tip in the description, we recommend you always detail what is included or not included: housekeeping, cleaning products/supplies, basic kitchen supplies, etc.
If you are using a platform that generates your listing information, be sure to review it when it becomes available. You can request edits. Be sure to suggest the wording you would like following the platform’s style of text.
Only use professional photos.
One of the most powerful tools you can use is professional photos. They are worth every centavo of what a good professional photographer costs you. They are key to quality listings, key to your website and key to the first step of the guest decision-making process… dreaming! You have to stand out from the crowd in this area if you want to get bookings.
Let’s get visible.
When you first list, it can take time to get to a cruise speed due to algorithms (the computer programming “rules and requirements” for becoming visible or popular) on the platforms. Your best bet to become more visible and secure more bookings faster on the individual platforms is to use discounts in the beginning. Programming discounts will push your listing to the first spaces on the platform. Secondly, in order to become more visible, you have to get reviews. Guest reviews play an important part in the platforms’ algorithms also. The more reviews you have, the higher you will appear in the search results.
Have a QR code for your vacation property on site.
Or a printed business card and a printed house guide. Provide your guests with a way to contact you once they have left your property. Then they can pass along your contact information to their friends. This is helpful for guests who reserve through online platforms.
Make a Google listing.
Having a Google Business listing allows people to find you directly on the Google map and in search results. Potential guests also search for vacation properties outside of the platforms to avoid paying fees. By having a Google listing, you allow people to find you and contact you directly. You can interact with the potential guest and see if they are a good fit for your property.
Use your own website for direct bookings.
Making a simple website makes you visible for people to find you directly. Your Google listing can reference your website and then people have access to your rental property information. You can list your website on your business cards or any other promotional material you decide to use.
You may use a tool to allow reservations directly on your website with an availability calendar or you can just provide your contact information and allow people to contact you directly to discuss a reservation.
Besides just being a genuinely nice human because it’s the right thing to do, you also want to collect positive guest reviews. Some platforms boost you in search results for having positive guest reviews. Being kind is your very best tool for getting referrals. Word of mouth is your best and cheapest marketing tool. Being nice gets you repeat guests and they will likely talk with their friends about their vacation. When their friends are interested in visiting, they will ask where they stayed.
Declare your taxes at the SAT.
If you do not have a RFC (Registro Federal de Contribuyentes or a tax ID number), and do not directly declare your taxes to the SAT (Servicio de Administración Tributaria or the tax administration service), the platforms will take out taxes on your behalf. The advantage to declaring your own taxes, and we suggest you hire an accountant to assist you, is that you can deduct almost everything that is related to your activity. This is much more advantageous than letting the platforms collect taxes on your behalf.
Have a crystal-clear cancellation policy.
The platforms allow you to choose among different cancellation policies and some allow you to define a custom policy. We know people’s plans change and travel can be uncertain. But also, you want to be sure to rent your space. So, find a cancellation policy that allows some flexibility but at the same time protects you in case of cancellation. Because of the constantly changing travel and health situations, flexible cancellation policies will definitely get you the most reservations. You are also free to work with your guests according to their situation. Compromises are easy to find and being kind when people are in a bind is really the best option.
If you have your own website or take direct bookings, be sure in any and all correspondence to state the cancellation policy both in the correspondence, in payment information and any rental contracts.
Stick to your guns.
You put a lot of time and care into managing and maintaining your property. Be nice but firm in the reservation process. Provide what you can for guests who make special requests, but not beyond what you are comfortable providing.
Some platforms provide reviews of guests. If you are not comfortable with a booking, don’t be afraid to refuse it. Some platforms may penalize you for this, but your peace of mind is the most important. Also, be sure to check if there are penalties involved in canceling a booking.
Making money from your rental property can be very profitable. This is especially true if you are a great host or hire a stellar property manager. You want happy guests. Happy guests attract more happy guests.
The nuts and bolts of property management and maintenance is a baseline service. Ultimately, knowing how to make money from your rental property is about providing exceptional customer service, being honest about what you offer, and making sure your guests have an excellent online and in-person rental experience.
If you’re ready to explore a new property investment on the Oaxaca Coast or in Yucatan State, get in touch with us. We have properties for different budgets form luxury oceanfront villas to chic studios.