By The Hospitable Team
When you purchase a property to renovate and rent it out as a vacation home, you want to be sure you’re making the most of your investment. It can be challenging knowing how exactly to allocate your budget for the best ROI, and bad financial decisions can seriously cut into your profits.
Renovating and furnishing a short-term rental isn’t the same as upgrading a home for personal use, as there are key considerations that will determine whether or not you can turn it into a successful business venture.
We spoke with Rick and Carly at Fresh Coast Flips to learn about the nuances of renovating homes for rental income and how to make the most of your investment. In this article, we look at:
- What you need to know when searching for a home to renovate
- How to flip and furnish a home for the short-term rental market
- What pitfalls to look out for when renovating homes to rent out
- How to give guests a vacation experience that’ll keep them coming back
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How is STR renovation different from flipping a property for a sale?
While you may think flipping a property to sell and renovating one to rent out is essentially the same challenge, in reality, they’re very different renovation projects. Rick and Carly explained that guests treat short-term rentals differently than they would their own home, so you have to furnish your properties accordingly:
“Short-term rental renovations are similar to flips. But with the former, we generally look for finish materials that are more durable. People tend to drive a rental car more aggressively than their own, and rentals are no different. Sure you want them to look nice, but you also want them to stay nice.”
Durability is essential when designing and outfitting a vacation rental property. And it’s just as important to make your properties easy to clean—perhaps a white couch isn’t the best choice for a short-term rental that will be hosting families with children.
Use tough materials
Follow Rick and Carly’s advice about choosing the right materials when remodeling your short-term rental property:
“Use common sense when making decisions… Are you renting in wine country? Better have slipcover sofas and countertops that won’t get wine stains. Did you buy a place on the beach? You should probably favor waterproof flooring over carpet.”
Along those lines, use scuff-resistant primer when painting your rental, and install scratch-resistant flooring. The same goes when furnishing the property—you want to find a balance between comfort, design, and durability.
While they want to feel comfortable, your guests don’t expect premium leather armchairs or 1,000 thread count sheets, so don’t go overboard. Because when you invest in furniture, dinnerware, and linens for your short-term rental, you should be prepared to replace items as necessary.
Badgering guests about a broken wine glass or a stain on the sheets will have a more detrimental effect on your guest relations than the impact it could have on your profit margins. So be prepared to cut your losses with wear and tear, and minimize the financial impact by choosing sturdy, affordable furnishings.
Make cleaning easy
Cleanliness is now a key deciding factor for short-term rental guests: A 2020 study determined that “[Airbnb] properties that were perceived to be clean increased their income by 17.5% and their occupancy by 16.5%” during the pandemic, and hygiene remains a major consideration for guests when choosing a vacation rental.
So you should choose materials and furniture that make it easy to keep your property clean. Take this into consideration throughout the renovation process—and think twice about mahogany coffee tables, which can be easily stained, or any white surfaces.
Identifying the right property for STR renovation
Financing is of course a crucial STR investment success factor, which is why your pre-purchase property inspections need to be careful and precise.
Rick and Carly emphasize the importance of “getting your home inspections upfront. Big ticket repairs can be easily missed on a walk-through, and that can be one of the biggest pitfalls of buying and renovating properties for short-term rental.”
Their team always inspects the windows, roof, HVAC system, and foundation on the initial tour prior to the home inspection. They also run a quick budget for the project before making an offer, which helps ensure they’re always making an informed investment decision.
But as important as your budgeting and renovation choices are, crucial to a short-term rental’s success is its location. Three factors you need to pay attention to are:
- The regulations around short-term rentals in the area
- The desirability of the location
- How saturated the market is
To measure these factors, you can use a tool like Mashvisor, which gives you insights into key short-term rental metrics like Airbnb cash-on-cash return, short-term rental income, and occupancy rate. Use hard data to ensure you’re making the right decisions, both in terms of the state of the home and its location.
It will also be important to have a clear understanding of these factors when exploring short-term rental financing options. By making an informed decision, it will be easier to secure funds for your investment and maximize revenue from your STR in the long run.
Renovating for an amazing guest experience
Even if your property is perfectly renovated and designed, you need to go above and beyond to give your guests a truly memorable stay.
In Rick and Carly’s words, you should be obsessing about the guest experience: “Do something to stand out. The little touches matter, so brand your property—offer a gift basket of local items upon arrival, and make the details charming and unique.”
Furnishings and amenities will play a big role in the guest experience, as does guest communication. Here, we look at both.
Nail your furnishings and amenities
When designing the interior of your property, try to achieve a consistent, timeless style—you don’t want to have to be remodeling every few years to maintain a modern look. Pick an attractive color scheme that’s not too loud, and highlight the unique aspects of your rental, whether that be natural lighting, high ceilings, or stylish exposed brick.
And while it’s important to have durable yet attractive furnishings, there’s another level of consideration you should take into account when decking out your short-term rental: Your ideal guest profile.
Think about the type of guest you want to attract to your vacation rental, and create your design with them in mind. Is your STR aimed toward business travelers? You’ll want to include an office or a designated workspace. Trying to attract young families? Be sure to childproof your furniture and equip your rental with a high chair and crib.
Also, look to attract your ideal guest with curated vacation rental amenities. Take a look at these examples:
In-unit washer and dryer
While we often take in-unit washers and dryers for granted in our own homes, guests really appreciate the ability to easily handle laundry during their stay.
A dishwasher is another one of those amenities that seems like a given, but many short-term rentals lack them. Installing a dishwasher is an especially good idea if you plan on hosting larger groups.
Outdoor living area
If you have a patio or deck, make use of that space by outfitting it with a table, chairs, and perhaps even a fire pit. Creating this space can help set your property apart from the competition.
For hosts that open their rentals to travelers with pets, having a fenced-in yard is a big bonus. It helps guests relax and enjoy their stay without having to worry about where their dog is running off to.
If your ideal guest is a business traveler or digital nomad, having a good coffee maker is essential. Take things up a notch from the basic Keurig by including an espresso machine at your property, and supply your guests with fresh, locally roasted coffee beans.
Leisure and entertainment products
Provide your guests with a relaxing and enjoyable stay by decking out your rental with leisure and entertainment amenities, like a pool table, dart board, ping pong table, board games, in-home theater, and smart TV.
While an in-ground pool requires a major investment and renovation, an outdoor hot tub is a bit more accessible. This amenity is a big bonus for guests, especially if your property is located in a cool weather location. Just keep in mind that this addition can be a big responsibility, as hot tubs can be expensive to maintain and require regular professional chemical checks and cleans.
While they require an initial investment, vacation rental amenities pay themselves off in repeat bookings and five star reviews. You can highlight them in your listings and use strong imagery to make them a key feature of your offering, to attract potential guests and bring in more reservations.
Impress your guests with stellar communication strategies
Regardless of how impressive your renovations and amenities are, you won’t get glowing guest reviews if you don’t effectively communicate with them.
Vacation rental guests expect rapid responses, whether it be answers to questions about how to find or access your property or instructions on how to work the oven.
But being highly responsive is time-consuming and often simply impossible, which is why a guest communication tool is essential for running a successful short-term rental.
For example, Hospitable.com automates your replies so you don’t have to be constantly checking your Airbnb messages. Also, we provide a unified inbox where you can keep track of conversations across Airbnb, Vrbo, and other booking engines.
Having a strong guest communication tool allows you to provide a stellar guest experience while maintaining your sanity. Here are the key features you’ll need to effectively manage guest communication and automate management tasks:
- Messaging automation capabilities
- A centralized inbox
- Review management
- Team collaboration features
- Task management
Ready to remodel? Follow these strategies for STR renovation success
Whether you want to build a vacation rental brand from the ground up or scale your STR business, you need to have a solid plan when it comes to purchasing and renovating a home for short-term rental. This includes:
- Finding the right location and property
- Identifying your ideal guest
- Designing and furnishing for durability and aesthetics
- Making communications and cleanliness a key part of your offering
- Having solid, consistent operations
- Providing an exceptional guest experience
Use these tips to make a smart investment and design a property that will keep guests coming back for another stay.
All your STR business in one convenient window
Start today with a 14-day free trial.
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