A rough estimate of how much you can earn from vacation rentals

There have been a lot of changes in the travel industry since the pandemic and more people are beginning to choose vacation rentals over hotels. This is a great time to invest in Vacation rentals. The vacation rental industry is steadily on the rise and within a few years will be a booming industry. This is the perfect time to jump in on the action and is also a great way to get into the real estate industry.

So how much can you make from Vacation rentals?

The executive chairman of TurnKey Vacation Rentals, John Banczak says that for every $100,000 spent on a property, you should expect an annual rental income of about $10,000. The data submitted by hosting platforms like Airbnb and Vrbo shows that Rental owners can expect to earn within the range of $11,000 to $33,000 per year based on the property.

?If these numbers confuse you, let's look at an example. A nice 3- bedroom house with good reviews can bring about $1500 to $2,200/ week in rental income.

Factors that can affect how much you can earn from vacation rentals.

?Location

Location is the most important factor when talking about the profitability of vacation rentals and the number of bookings. If your property is located close to attractions like a beach or lake, you can charge significantly higher than a property located in a residential area. Such properties not only increase the amount you can charge per night but also increase the occupancy rate. Also, select properties that can generate year-round profitability.??

For example, the Poconos are a great place to invest in vacation rentals because it is close to cities like New York, Philadelphia, and Connecticut. These close cities bring in regular crowds for the weekend.

Property size

You can usually charge extra for bigger properties with more bedrooms and bathrooms. The problem with this is that these large properties are expensive and require a lot of investment which can take a long time to recoup. If it is a location usually visited by large crowds and families a property with at least 3-4 bedrooms will be in demand. The properties with the highest occupancy rates are three-bedroom rentals. These properties are ideal because of their lower price points while still getting great bookings.

Amenities

Another vital factor that decides your occupancy rates are the amenities your properties provide. More feature-loaded properties will get better bookings than vacation rentals which miss out on these amenities. Some essential amenities are good quality mattresses, furniture, necessary appliances, and some entertainment like TVs and game rooms. The most sought-after amenities in vacation rentals are hot tubs or jacuzzis, while swimming pools add brownie points to your properties. Also, keep in mind that cleanliness is essential, and update the interiors to a modern decor if it is too outdated.?

Local regulations

?When on the lookout for a vacation rental remember to check out the local, city, and HOA( homeowner association) regulations. The local regulations and taxes can hinder your property's earning potential and eat into the profits. Some cities have strict rules regarding short-term renting, while others disallow it entirely. Also, find out if you require any additional permits.