5 Ways to Minimize Vacation Rental Costs and Maximize Revenue
Why It’s Important To Minimize Costs To Maximize Revenue
Running a successful vacation rental involves juggling a lot of numbers, and with numerous fees and costs, it can be challenging to stay in the black. A key strategy for boosting profitability is to minimize the expenses you incur as a short-term rental owner. By reducing these costs, you can significantly increase your profits and enjoy a larger financial cushion at the end of the day.
For those of you who are looking for ways to cut down on the costs of running your vacation rental business, today we’ll share 5 strategies that could help keep you in the green at the end of the fiscal year.
Implement a Routine Maintenance Schedule to Save on Costly Repairs and Renovations
Repairs and renovations are the bane of any vacation rental owner’s existence, but when you’re running a successful business, there’s bound to be times when things get damaged or worn out and need to be replaced. Fortunately, there is one way to avoid getting hit with huge surprise repair bills: schedule regular inspections and implement preventative maintenance strategies.
Many owners shy away from establishing scheduled maintenance and inspections, oftentimes because paying inspectors can be a costly endeavor. Take it from us, however, that what you pay for in inspections and preventative maintenance will pay off in the long run, keeping your repair costs down and ensuring that your property value stays intact or even grows. In fact, that’s one of the largest benefits of choosing LocalVR for your property management–we work hard to keep your property in good shape, not just for your current and future guests, but also for when you decide to sell the property.
Make the Most of Your Tax Deductions
Chances are that if you’re running a vacation rental business, you’ve already got an accountant or CPA on your side to ensure that you’re abiding by all the rules and regulations that you should be. However, even if you do have a professional accountant helping with your taxes, it’s a good idea to make sure that they are helping you to get all of the tax deductions possible on the expenses for your business. Things like vendor fees, property management service fees, and even insurance can all be deducted from your tax bill at the end of the year, leaving you with more money free to invest back into your business.
Save on Utilities By Installing Energy-Saving Bulbs and Appliances
Utility and power bills are an inevitable cost of doing business, but that doesn’t mean you just have to accept high rates and be done with it. A good way to slash your energy bills is to implement a few eco-conscious changes in your short-term rental, such as replacing regular light bulbs with energy efficient ones or switching out your old, power-guzzling appliances for newer, more efficient versions.
If you truly want to maximize your savings on energy bills and you live in an area with abundant sunlight, a more drastic step would be to install solar panels on your roof or in your outdoor space. To find out more about implementing energy-saving strategies in your vacation rental, check out our blog on greening up your rental.
Book Directly With Guests to Save on Platform Fees
There are quite a few advantages to allowing guests to book with you directly, but the biggest one is that direct bookings allow you to save on the service fees that platforms like Airbnb and Vrbo charge. Commission on these OTAs are often steep, ranging from the low end of 3% all the way up to the high end of 16%, but when you allow guests to book with you directly, you can avoid these fees altogether and keep the savings in your pocket.
Direct bookings are different from those on OTAs, however, since you won’t have the brand recognition of a site like Airbnb to draw traffic to your listing. Check out our blog to learn more about how direct bookings could help your short-term rental business.
Invest in Durable Furnishings and Appliances to Save on Long-Term Costs
Finally, our last tip for minimizing your costs and maximizing profits is investing in furniture and appliances that will last through the long haul. Because these items will experience a lot of extra wear and tear when being used by so many different people, they have a tendency to break down before the end of their normal life cycle, which can end up eating away at your profits when you have to replace them unexpectedly.
Instead of dealing with this pitfall when it arrives, do your research before you purchase new furnishings and appliances to see how durable they have been for other consumers. Only choose to invest in brands that will be reliable in the long run and you’ll be glad of the savings you gain over the years to come.
Discover More Ways to Maximize Your Vacation Rental Profits
Running a successful short-term rental business requires not just capital, but frugality and intelligence when it comes to spending that capital wisely. For those of you who are looking for ways to maximize your income from your vacation rental investment, the above tips should help you get started on minimizing your costs.
Want to learn more about making your business more profitable? Take a look at our guide to getting repeat stays from guests or our blog on using social media to boost your short-term rental bookings.