For many, owning a second home near the beach is a lifelong dream. Yet, most people find themselves occupying their second home for a short time throughout the year. If you’d like to increase your income during the months that you’re away, you’ve probably considered turning your home into a vacation property. But, how do you make money on vacation rental property? It depends on several factors, and we’ve outlined them below with three tips on how to calculate your vacation rental income.
If you have any other questions about managing your home on Charleston’s sea islands, contact our property management team. We are here to save you from hours of research and provide you with the answers you need.
Here’s How to Calculate Your Vacation Rental Income
1. Know the Cost of Upkeep
Before you calculate your income, the most critical step is to create an expense spreadsheet. Begin with the basic costs of caring for your home, like landscaping, cleaning, repairs, and maintenance. Next, move on to owner specific costs, including your homeowners’ association fees, property taxes, homeowners’ insurance, and flood insurance. You’ll also want to keep in mind the time investment that you make in marketing and making reservations. Because owning a vacation property often comes with hidden costs, it’s essential that you dedicate time to this task. Every dollar impacts your ROI.
2. Educate Yourself on the Competition
Once you’ve taken your expenses into account, you know what it will take to at least break even. Now, it’s time to evaluate the competition in the area. Find out what properties like yours charge. Also, take your time to see how much properties with special amenities are charging. For example, many guests are willing to pay more for a home that offers a Seabrook Island Beach Club amenity card. By doing this research, you can walk away with a realistic income estimate, and also discover low-cost ideas that can help increase your ROI.
3. Keep Your Peak, Shoulder, and Off Seasons in Mind
In a place like the South Carolina Lowcountry, property owners acquaint themselves with the nuances of the area. Familiarize yourself with how and when visitors come. Your rates will increase during peak season, level off in the shoulder season, and be at their lowest during the off-season. Remember, these seasons vary dramatically from city to city. For example, in downtown Charleston, the peak season is much different than on Kiawah Island. While fewer people visit downtown during the summer, this is the most popular time to visit Kiawah and Seabrook. And, these towns are only 30 miles apart!
Your Vacation Rental Income Calculator
Rented offers a monthly vacation rental income calculator to help give you an idea of how much money you could make. Understanding your expenses, your competition, and peak seasons will provide you with a more accurate answer.
While tools like the Rented calculator have value, keep in mind that effective revenue management is more complicated than a simple calculation.
The Best Solution? Let Pam Harrington Exclusives Handle It All
Now that you know the basics on how to calculate your vacation rental income, you can see that it is no small task. In order to make the most of your investment, your property requires constant monitoring, upkeep, marketing, and a knowledge of industry trends.
Many people with a second home don’t have enough time to do it all, and that’s where Pam Harrington Exclusives can help.
With over 40 years in the Kiawah Island and Seabrook Island vacation market, we set the standard for luxury getaways on Charleston’s sea islands. Together, this experience and knowledge guides our client partnerships to meet your needs as a property owner.
We offer full-service, personalized property management, including securing reservations, area guidance, concierge assistance, and more.