5 ways to make more money from short term rental property investment

July 01, 2021

Making more money from short term rental property investment

The real estate landscape has always been coveted amongst investors and business owners alike. With its sustainable recurring revenue, short term rental property is one of the best passive incomes one can get, especially if you are investing in commercial property. 

However, with the global travel industry reaching new heights, the competitiveness of short term rentals services has grown from stiff to stiffer. But all hopes are not lost. You can still turn the tables in your favor. All you need to do is be strategic in how you approach your business. 

Making your journey more accessible, we bring you the top 5 ways you can improve revenue for your short rental property in 2021. 

5 strategies to monetize short term rental property in 2021

The core of every short term rental investment property consists of the property’s location and the time when you buy it. The price of buying an existing property will be different from land located at a fast-developing place.

Keeping these two factors in mind, you can use five methods to optimize your property’s ROI. 

Productivity tools

If there is one thing that the whole hospitality industry fusses about, it is the lack of time. There is always more work than your team can do, yet everything seems to be necessary. This makes productivity tools and methodologies one of the top priorities for the growth of short term rental investment property. 

Now you can integrate the Eisenhower methodology to get some speed, but that will take a few steps ahead. If you have to see exponential change, productivity tools are a way to go. 

Luckily, we’ve selected a few tools you should consider today. 

Data visualization tools

There is no modern business that can sustain itself without the help of data. However, just having access to raw data cannot bring value to your business. You need data that is comprehensible and action-oriented. This makes data visualization tools incredibly important. 

Integrating infographics like line charts, pie charts, and tables can give you real-time insights on developing strategies for your business. The best part? Developing actionable data is as easy as a cake. With a user-friendly, intuitive infographic maker at bay, transforming your boring, hard-to-look data into consumable information is a task of minutes. 

Operations management tools

The efficiency of your operations is directly related to how well you can manage and optimize your workforce. Operations management tools exactly achieve this goal for you. From keeping track of inventory stocks, revenue management, check-ins, room availability to customer management, it does it all. 

Unified management 

Developing an app might just look like the least of the priorities for you, but you need to think long-term. An app can improve your overall customer experience and act as a unified marketing and sales machine bringing invaluable consumer behavior data for you to work on. However, you can supplement this with vacation rental software.

Optimize boarding experience

Customer experience forms the core of the hospitality industry. No matter whether you turn your property into a hotel, a guest house, or a homestay, if you are not optimizing your customer’s onboarding experience, chances are you are losing on customers. However, ensuring a pleasant stay for your customer throughout the stay is easier said than done. 

Managing all your guests simultaneously while keeping the same quality standards is a hustle. There is always more work on the plate than your team can do. Automation makes sure you can add extra hours to your productivity. 

Here are a few tasks that you can consider automating without compromising the experience. 

Create digital check-in

The first element that you should consider in providing customer service for short term rentals is a seamless onboarding experience. Creating a digital check-in is a great way to do so. Not only does it depopulate the arrival counter, but it automates the job. What’s more? Your guests will never have to wait in annoying queues anymore.  

Facilitate online booking

Taking manual bookings can be both messy and time-consuming. Moreover, your sales capacity is also limited. If you are taking manual calls, you can take only one booking at one point in time. But, by integrating an online booking option, you can take bookings from multiple customers all at one time.   

Customer help desk

Answering potential customer queries is incredibly critical yet unproductive at the same time. Yet if you decide to go with a human workforce to answer all your customer queries, it is restricted in bandwidth. There is a finite number of customer queries that your employee can answer in a day while the questions keep on increasing each day. 

Integrating an AI bot ensures automates this process alleviating the speed and efficiency alike. 

Optimize your pricing strategy

Optimizing your pricing strategy can create growth opportunities for your short term rental property. Optimizing your price not only increases your ROI but lets you get more from doing less. However, to do this right, you need to go back to the heart of your business, the target audience. 

Aligning your price with your audience persona is critical for end conversions. If your audience are budget travelers and you are a premium brand, the pricing would work against you instead of for you.  Therefore, to make sure you do this right read these pricing tactics.

Create a value-based pricing model

The idea of a value-based pricing model is to capture the maximum value that your target audience is willing to pay. This makes the optimal strategy to generate the highest possible revenue that is aligned with the psychographics of your target audience. But for this tactic to work, you need to run market research campaigns. 

Create pet-friendly policy

Many of your guests are animal lovers. Chances are, they might travel with their pets. However, every staycation does not equip to take pets in. This is where you can leverage your brand. Adding a pet-friendly policy attracts pet-owning customers to you. You can even create a differentiation factor for your short term rental property by adding this element.   

Create complementary services

For most travelers, traveling is synonymous with comfort and leisure. This makes complementary services the crown jewel for any brand that integrates value added-pricing model. Your premium charges can be justified by the complementary services you get. 

But to make this strategy work for you, ensure you create a cluster of products that improves the overall experience of your borders yet are cost-effective. Only then can you witness growth in the ROI. 

Create loyalty programs

Acquiring a customer is six times more expensive than retaining one. This makes optimizing the value of your existing customer base critical. Loyalty programs are the best way to do this. They not only optimize the existing relation but also create new customer acquisition opportunities. 

The best part? Your brand equity gets a considerable boost in the long run. Here are a few ways you can do this. 

Incentivize longer stays

There are many kinds of travelers traveling for many reasons. While backpacking digital nomads is a romantic idea now, many travelers are on vacations and work. So what’s so special about this data? 

If you take a close look, you will see that travelers who tend to backpack or stay for vacations tend to stay longer than work travelers. This creates an opportunity for you to optimize your sales.  Creating personalized discounts for longer stays creates an opportunity to transform them into your long-term customers.

Create referral channels

Creating a referral program can be one of the best ways to optimize your existing customer base. It harnesses the strength of your customer network. However, to make this work, you need to incentivize both your new acquisition and existing customer. This will keep them nudging to take action. 

Create membership programs

You can identify your most valuable customers by looking at your guest onboarding history. Those are the guests who have been frequent visitors to your short term rental property. Creating a loyalty program exclusive for frequent visitors is a great way to optimize the lifetime value of your customers. 

You can have inclusive memberships that allow them access to exclusive discounts, services, and utilities. However, you need to stay relevant to the customer for your offers to work. 

Create an omnichannel sales model

If you have been in the short term rental property business for a while, you already know your sales pipeline needs to be robust. This makes creating an omnichannel sales model critical for the growth of your business. But you need to ensure that your sales channels are strategic. If your customer acquisition pipelines are weak or don’t align with the core brand value, you will spend more on customers who bring the least value to your services. 

Here are a few ways you can initiate your multi-channel sales pipeline.  

Partner integrations

Having a central sales channel like a website is only the first step towards sales automation. To make the most out of your property, you need maximum visibility. This can be easily achieved by enrolling in partner programs with Airbnb and Booking.com. In fact, the latter makes it super easy to create a unified sales system with the booking.com channel manager

Organic and paid marketing

Creating marketing strategies is a must for experiencing growth in your property sales. But there are three elements that ensure success for any campaign: content, context, and offer. Aligning these can improve your conversion rates exponentially. 

Affiliate programs

Creating affiliate channels with other companies and travel blogs is a great way to strengthen your sales outreach. These not only bring you high-quality leads but create brand value in the process. 

Conclusion

Real estate is a very sustainable and stable market sector for short term rental investment property. However, to witness the profits flowing in, you need to be patient and think long-term. Preparing your mindset is a crucial step for how well your short term rental property is at the end of the day. 

The above tips will give you revenue and traffic spikes at record speed. But this must not deter you from finding new ways of growth. The more you stay curious, long-term, the more easily you can stay ahead of your competition.

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