There’s an acronym in real estate investment circles.
OPM. Other People’s Money.
It’s truly an amazing concept to have other people give you money for temporary use of property that you own.
Most people start investing with long-term rentals. That’s how I started. In the last 15 years, I’ve accumulated a portfolio of 16 properties. All forms of real estate can be profitable.
However, if I knew how fun and, frankly, wildly profitable vacation rentals could be, I would have never invested in anything else.
I don’t like the term “OPM.” It seems a bit jaded to me. So, I’ve devised my own term—HTF. Happy Traveller Funds.
I’ve discovered the secret to providing an experience beyond the “two bedroom/two bathroom with off-street parking” that really gets people excited. They’ll pay four times (or more) what they would pay for the same thing if it were a long-term rental—if you provide the right things. We’re talking real money. What I could make in a whole month with just one week’s booking.
There are bonuses:
Free holidays in a place you know you’ll love. Not only can I stay in my holiday home and enjoy the pool, maid service, incredible views and outdoor hanging bed that my guests enjoy—for free—showings are all on the internet. At all hours of the day. Sometimes, I’m listening to a local band while people are checking out my home. Other times, I’m in church or a movie. A lot of times, I’m sleeping, letting the internet do the work for me.
Some mornings, I wake up, and there’s a week in August booked and payment is already on the way to my bank. All of it is done through the internet.
The coolness factor. Let’s face it. Having a holiday home is a great perk. Having someone pay you for it? All the better!
Sure, it’s a bit of work in the beginning. If you call furnishing your home “work.” And, yes, you’ll need to take amazing photos, staged just right, or hire a photographer. A great description will put you head and shoulders above the competition. Video will really help, but isn’t a necessity. There are a few more key issues that you should know to really pop the top on your income ceiling.
Because in the beginning, I rented my home in Fiji for $2,600 per month. I was pretty impressed. This was 2005. I now charge $585 per night for the same time frame. I’ve learned a lot. I left thousands upon thousands of dollars on the table. Those were painful lessons. But now, with what I’ve learned over a decade of owning a vacation rental, I’m making income I need to cover my carrying costs, including a small mortgage, and make a substantial salary—my second home makes more than all of my long-term rental properties combined. Last year I made $76,470 from my vacation rental alone.
Where in the world would you quadruple your earnings? Is there a place that you would love to login as “Owner” and block off the calendar for your very own, free holiday?
Stayz lists 43,545 holiday homes in all of Australia.
New Zealand has 8,518 listed on HomeAway. Culture rich Thailand comes in at 6,899. Exotic Malaysia only has 1,276. Emerging and romantic Vietnam? A mere handful at 648. Essentially, the equivalent of a couple of large hotels.
As travellers discover holiday lets or vacation rentals, they often continue to seek them out. Studies have shown that vacation rental guests are higher-quality travellers—they spend more, travel more often and travel internationally more regularly.
Dream big in an industry that travellers are seeking out. Much like cruises and all-inclusive resorts, vacation rentals have a growing following. Once you’ve gone from the box (also known as a hotel room) to your own holiday home, most people can’t imagine travelling any other way.
So, invest with confidence. Seek out your dream home. Chances are, there are quite a lot of people out there who won’t invest the time into creating the holiday experience, but will pay you handsomely to stay a week or two in yours. Month in, month out, with just the right blend of professional tools that make it so easy to connect with travellers, you might find yourself turning people away because you’re booked. Or, you’ll do like I did and continue to raise the nightly rate—turning an even higher profit.
By getting into the vacation rentals business now, you can have a fully paid for home that brings in income. Are you leaving money on the table? If you don’t have a vacation rental, you quite possibly are.
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