5 Tips to Avoid Overspending on Rental Improvements
Renting out an Airbnb or vacation home can be an extremely lucrative investment, but it also comes with unavoidable responsibilities. You want to accommodate your guests and make sure everything in your rentals function properly during their stays, and keeping them happy often entails making regular improvements to your properties.
With COVID-19 presenting some potential downtime in your business depending on your location, this could be the opportune time to spruce up your properties. However, it’s all too easy to spend more than you intended when making updates. Here are a few ways you can keep money in your wallet and still make all the necessary improvements your rentals need to ensure guests are satisfied.
1. Set a Budget
The first step to any improvement project is to create a budget. How much can you actually afford to spend on updates and renovations? Does putting that amount of money into one of your rental properties make financial sense?
Remember, you need the money you make from the rental to offset the investment you put into updating it. Check out other vacation rental listings in your market and price range. Do they offer amenities and experiences that you could also implement? Is the potential boost in bookings and fees worth the initial cost?
This is also a good time to consult with your accountant or CPA. You can get a better idea of which projects could be deductible business expenses and how you can organize your finances to make tax season easier.
Once you set a budget, stick to it. Of course, this is the most difficult part, but committing to a plan will keep you from overspending during the renovation process.
2. Prioritize Practicality Over Design
It’s also important to differentiate between practical and design-oriented improvements. This will help you stay on budget and keep you from overspending on aesthetic elements.
For example, you may have the urge to redesign a bathroom in one of your properties to be beach-themed. At the same time, the toilet could really use an update. Maybe the flush is weak or the bowl is cracked, requiring a full replacement. At the end of the day, any guest would probably choose functional plumbing over the perfect décor.
Prioritize these practical needs before opting to redesign a space, even if it means sacrificing a few details. Once your short-term rental is running smoothly, you can then work on incorporating design touches into your budget.
3. Vet Your Contractor
If you decide rental improvements are within the budget, it’s a smart idea to hire a contractor to work on more complex projects and finish them on time. They can help with flooring replacements, bathroom finishes and other projects that benefit from an experienced hand.
Make sure potential contractors are qualified for the job by vetting them before hiring them. Inquire as to what kind of experience they have and if they have a license. Contact their references and read reviews on their work to ensure they’re responsible enough to finish the job well and in a timely manner. This will save you from wasting money on shoddy work that’ll soon need repairs.
4. Look for Second-hand Pieces
Another excellent way to save money on improvements for your rentals is to buy second-hand or recycled pieces or materials. Visit your local Habitat for Humanity or Salvation Army to search for furniture, appliances and other items your renters might need.
Purchasing lightly used items will be much cheaper than buying them brand new, allowing you more room in your budget for aesthetic improvements and other optional projects. You could even use recycled or reclaimed woods, plastics, glass and other materials to save more money.
5. Focus on the Guest
One of the most important things to remember when renting out a space is that you aren’t making improvements for you — you’re doing it for your guests. Every addition or upgrade you make should be done with them in mind.
For example, many guests may expect hotel-quality accommodations. This means the improvements you make to your rentals should focus on amenities like a luxury bedroom. You may be just fine with sleeping in a twin or double bed, but if you provide the same size for your guests, you may receive some complaints. It may be worth it to allocate funds toward a queen-sized bed to create a big impact on guest experiences.
Plan for Smart Short-Term Rental Improvements
It doesn’t take a lot of money to upgrade your vacation rental in a way that makes a serious impact. Small investments can turn your property into one that reaps great rewards.