| Traveler trends are on a rapid incline for the | | | | year you have earned a total of $10,450.00 |
| vacation rental landlord business. Do you have the | | | | (monthly rent of $1100 multiplied by 38 weeks or |
| numbers in place that will ensure maximum | | | | eight months). So the remaining 10 weeks of |
| potential on your vacation rental property | | | | summer rental need to be rented for $1904.00 |
| revenue? | | | | per week. |
| Look at your weekly rates (Based on Christine | | | | $29,496.00-$10,450.00=$19,046.00 divided by 10 |
| Karpinski's "17 Week Rule"): | | | | weeks=$1904.60 |
| Determine exactly how many weeks you can | | | | When you have no winter rental tenant, the |
| realistically rent out the property. First on a | | | | property is free for owner getaways, and who |
| weekly basis, and then with a combination of | | | | knows... someone might just refer their business |
| weekly summer rental and monthly winter rental. | | | | traveler friend who needs to hole up in your town |
| Be aware that discounting weeks you might | | | | for a couple of weeks in February. That's two |
| initially consider as "out-of-season" in favor of a | | | | weeks of income above and beyond your |
| winter rental could actually be causing you to lose | | | | formulated weekly rate, which - if you've set |
| money. A clever and creative promotion could | | | | your rate correctly - is pure profit. |
| extend your rental window and draw enough | | | | Have a targeted marketing plan and budget |
| weekly revenue around select holidays to avoid | | | | Owning a vacation rental home is a business and |
| the need of a winter rental (less wear and tear | | | | every business should have a detailed marketing |
| and, in essence, less upkeep and repair costs). | | | | plan - a document which details where the |
| Once you have a number of weeks, divide that | | | | business will get business, and ultimately, get paid. |
| into the sum of your monthly mortgage including | | | | When you know exactly who wants to rent your |
| expenses multiplied by twelve. This will equal the | | | | property and where to find them, you to set up |
| amount to aim at charging per week on average | | | | a steady stream of tenant prospects waiting for |
| in order to break even. | | | | your property to become available to them. |
| Example 1: No winter rental - 15 weeks (10 | | | | The best business is repeat business |
| summer weeks, Thanksgiving Week, Valentine's | | | | As mentioned above, you never know when |
| Day Week, Memorial Day Week, and Labor Day | | | | someone may call and say, "I'm a friend of |
| Week) and total monthly expenses of $2458.00 | | | | so-and-so and she said your vacation rental is just |
| $2458 X 12=$29,496.00 divided by 15 weeks = | | | | the best and..." |
| $1966.40 (average weekly rent to break even) | | | | Repeat guests had a positive and memorable |
| Example 2: With winter rental - 10 summer weeks | | | | enough experience to want to stay in your |
| plus 8 months of winter rental and total monthly | | | | property again. Besides the higher chance of |
| expenses still $2458.00 | | | | referrals and the free advertising, repeat renters |
| $2458.00 X 12=$29,496 divided by 48 weeks (full | | | | require less maintenance and you already know |
| year minus four weeks for owner/maintenance) | | | | what to expect from one another. Get feedback, |
| = $614.50 | | | | particularly when something has changed, to stay |
| Seems much easier to maintain the smaller | | | | up-to-date on your guest's needs and satisfaction. |
| weekly rate, but there's a caveat. The winter | | | | There are other ways to maximize revenue |
| rental market for your area may only support an | | | | through occupancy and retention. Please comment |
| $1100 per month rental charge, and suddenly you | | | | on your ideas for maximizing return on |
| are averaging only $275.00 per week. Let's say | | | | investment in vacation rentals. |
| that is the case, and for 38 weeks out of the | | | | |