Apr 17, 2014

When I was a college and minor league baseball player, the thing I always wanted to avoid was the “O-fer,” which is baseball slang for a hitless game in which someone may go 0-4, or no hits in 4 at bats. I had my fair share of “O-fers,” however, so my career didn’t last very long. Ten years later, I find myself helping vacation rental owners generate returns from their properties, and a great way to ensure success is to avoid the off-season O-fer. A major factor in vacation rental performance is the occupancy rate. So whether you operate at a loss, breakeven, or a profit, there is likely more you can do to drive value at your vacation home.

You may ask, “how do I rent off-season weeks?”  I’ll share some solutions for that, as well as some other ways to extract value from the slow season. In no particular order, here are some

1. Use It - You bought the place for a reason. OK, maybe a few reasons, but one was surely to lock down a few trips to your favorite vacation destination each year. So the off-season is tough to rent, but you probably like your property and the location whatever time of year, so be sure to block off your calendar for some personal time. If you’ve already used the property 14 days but want it to remain a “vacation rental” in the eyes of your pals at the IRS, you can do work on the property while you’re there. The opportunity costs are much lower for owner use in the off-season, so enjoy your vacation home without a side of guilt.

2. Discount & Promote - The first one is easy to recommend but sometimes difficult to do. It’s the same exact place that fetched top dollar in peak season, and you even updated it in the shoulder season, so how can it be worth so much less just a few short months later?  If you’re serious about this property paying, then vacancy is a four letter word. As long as there’s some demand for your unit type at that time of year, then you can ensure your property is chosen by discounting heavily. Screen the tenant, get a deposit, and do everything you normally do to ensure that the rental doesn’t depreciate your unit, but make sure you capture the limited traffic to your area in the off-season. Promote by partnering with local businesses such as restaurants and golf courses to give your guests value in more way than one.

3. Guaranteed Contract -  Guaranteed contracts, long term leases with the right to sublease on a short term basis, and the sale of rental rights are all versions of the same vacation rental management solution that include structured payments from a vacation rental management company that guarantees vacation rental income and property condition to owners in exchange for the right to rent the property. This arrangement enables owners to smooth income throughout the year. Not all managers enter into guaranteed contracts though, and those that do have inventory preferences that may or may not fit your vacation property. Furthermore, soliciting a single management company for an offer would mean that you would have little assurance that the guaranteed contract amount was fair market value. VacationFutures is the only online marketplace that allows homeowners to receive guaranteed contract offers from professional property managers who compete against one another for the right to manage properties. If you’re not hung up on directly controlling every aspect of your rental property (though you may still convey covenants to managers in these deals), and if you value your time at all, you should consider receiving guaranteed income offers from management companies in your area since it’s free and there’s no obligation to accept any offer.

4. Events - This does not apply to every vacation rental owner, but you’ll know if your place has any potential to be an event space (or tied into one). People get married and have family reunions at all times of year. They pay a premium to hold those events in choice spaces. If your property qualifies, consider throwing up a listing on Estate Weddings & Events and earn peak season rates in the off-season.

5. Referral Network - Referral networks enable your peak season to finance your off-season in more ways than one. When you have multiple leads for a peak week, you can refer your excess traffic to owners of comparable properties via referral networks such as VR Referrals. That additional income in the good times can help pay for the lean season. And by throwing your hat in the ring for referrals, you may receive some guest referrals from the network when you need them most.

6. Home Swap - It’s what it sounds like. You’ve got a beach home and want to hit the slopes, or vice versa. Check out the myriad home swapping exchanges, from the high-end with 3rdHome to the more egalitarian HomeExchange.

7. Donate - Lucky number 7:  give it away. You probably didn’t get where you are today by giving your money away, and maybe that’s what donating weeks to charitable causes seems like. In fact, it’s exact opposite. You see, the government intervenes with capitalism in all kinds of behavior-guiding ways (a.k.a. market skewing), so don’t fight it, float it. Donate weeks to Geronimo or VRIA Vacation Rental Angel and receive tax breaks next year when it’s time to settle up with Uncle Sam. He’ll thank you for it, and you can make the world a little bit better place in the process.

This guest post was brought to you by Mickey Kropf, Co-Founder and Head of Sales for VacationFutures, the online marketplace that allows vacation homeowners to receive guaranteed income offers and turnkey service from professional property managers.

Image Credit: © Anonymous / Wikimedia Commons / GFDL

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