Marketing Your Vacation Home

Marketing a vacation home rental can seem very difficult to someone not familiar with the industry. Many people think they have to place classified advertisements in papers across the country or that only real estate agents have long lists of people that travel to the area. Perhaps if you bought before the internet these myths would have more truth, but with the internet it has enabled vacation home owners to reach people searching for vacation homes in their specific areas, from all over the world.

The key elements of VR Home Marketing are:

Research your market

Know the demographics of people coming to the state and your region for tourism. Identify from what states and countries send the most visitors to your area. Identify the major destinations people travel to in your state or region. A great source for this information is your states tourism website. From this information you can begin to get a sense of your target audience and demographic. This is important as it will inform you better as to what amenities or features to position within your market messaging. For example if your target demographic is married couples aged 30-45 with children than you better offer high speed internet, and you may even want to consider having some gaming systems in the home. You also know which local and state attractions to point out i.e we’re just 1 hour from Red Rocks state park.

Research your Vacation Rental (VR) competition. What are they priced at, how does this vary by type of home, location etc. Identify what the key amenities are in terms of the minimum and the premium.

Position your VR

When people hear the term “positioning” they think it to be some fancy marketing term. What it really means, in the context of a VR, is how you will position your VR in your market. Will you position it as a luxury property, a low cost/value VR, a family friendly VR etc. Having a sense of this positioning will help you when you message and draft copy to actually market your VR

Price your VR

Pricing will be one of the most important decisions you will make on the marketing your vacation home rental (VR). You will want to ascertain if prices change based on a homes size/bedrms etc, location, and season. You must get a sense of what the going rates are. You can do this through several ways, and I recommend that you use more than one:

i. Contact local real-estate agents and ask them current rental rates for your type of home/property/location

ii. Contact local rental and property management companies and ask for rental information

iii.Research VR web sites and compile a pricing matrix (location, home type (i.e. condo vs. single family), # bedrooms, # baths, Amenities, weekly rate, monthly rate.

iv. Contact local resorts & B&B’s and get a sense for their weekly and nightly rates. Remember these are your competitors. It also helps define your value proposition.

v. Ask other VR owners what they are getting

vi. Compute your pricing mean and median for your area/region and comparable home

Now that you have complied your pricing market information its time to compile your costs. Make a list of all costs associated with your property and tally an annual amount and then divide by 12 & 52 so you get a monthly and weekly cost. Remember to look at:

o Mortgage

o Taxes

o Elec

o Water

o Sewer & trash

o HOA fees

o Pest control

o Landscaping

o HVAC servicing

o Pool servicing

o Maintenance fund: you will also want to allocate some reserve to a maintenance fund usually $300-500/yr but can vary based on the age and condition of you home

Now you will need to set your price. Without getting fancy and trying to identify your desired margins etc the ideal price is where your market competitive and you cover 75-100% of monthly costs with a one week rental in high season. However with recent property appreciation in most areas this is a getting to be a more challenging goal to attain and you may want to look to cover a ½ years worth of expenses during your high season. Keep in mind that you must be market competitive. This doesn’t mean always being the lowest price. You want to really look what the pricing is in your specific area and comparable homes and compare with your amenities. Price too high and people will ignore you; price too low and people will think your VR is a dog unless you are positioning it as a low cost VR. Remember pricing is an inexact science, especially in the VR industry, as our industry is not governed by professional hoteliers but by irrational home owners such as you and me. If people are calling you and telling you your prices are too high take heed…if your not getting any inquires you may need to re look at pricing. You will find a price point at which the property starts too move.

VR Amenities (Equip your VR)

Now that you have your VR you need to think of it as a product. In this context you will need to have a sense of what other competing properties have in the way of amenities and in the context of your positioning strategy. What are the basics (i.e must haves), what are the nice to haves? What are really great things to have? A key thing to consider is high speed internet. This will add $50.00 extra per month. You can charge for this but it’s becoming more of a basic utility these days and is right up there with having a phone. Will you have internet access? What kind of TV will you have? Flat panel TV’s are increasingly see as a luxury item, along with gaming systems. What cooking accessories will you have? Will you have games for a rainy day?

Your amenities are like product features. They support your market positioning, pricing and also enable you to differentiate yourself from other VR owners. Think carefully here and identify key features you want to highlight in your market messaging

Promote your VR

Now its time to get the word out. There are several things you will need to do:

i. Place several listings on larger VR advertising sites. You must list with more than one to get the market reach you will need to drive inquires. These include VRBO.com & Homeaway.com. Consider regional listing sites to add your advertising efforts. DO NOT SKIMP ON ADVERTISING.

ii. Get a web site. You really need a dedicated website for your property. There are several do it yourself and even dedicated VR web site services that create one for you. This will enable you to supplement your listings with a dedicated web site where you can add more photos, area information, location and proximity, etc. It will also get you more search engine exposure.

iii. Photo’s, Photo’s Photo’s, I can’t stress the importance of photos. Photos sell your property and help to take an element of risk away from the prospective renter who has ever seen your property. Another reason to have your own website so you can really load up on photos.

iv. Free classifieds: Get on craigslist.org and backpage.com. These internet classifieds have free vacation home rental categories. You can use your vacation home listing HTML address or your website (ideally) to drive prospects to from these sites.

v. Send an email to friends and family and support network (housekeeper, landscape etc). Consider offering them discount if they book and also offer them a referral fee/bonus if they get a rental for you.

vi. You may want to consider large university alumni magazines as these have VR listings within their classifieds.

vii. Depending on the size and expense of the property you may want to reach out directly to local city magazines and classifieds and have a real estate agent place a MLS listing. These will be more expensive and most VR’s will not need this level of exposure.

viii.Inform local real estate agents and inform them of your referral bonus (i.e 10-15% of the rental revenue)

We will cover, in more detail, all these areas in later entries to my blog. In the short run you can price, equip, promote, and rent your VR home…and be successful in doing it. In fact I would bet that you will be more successful than having a real estate agent or property management company do it. It’s easier than you think.