If you have been thinking about buying an investment property, you may already have a few expectations. As platforms such as Airbnb grow, it’s hard not to find success stories from people who have earned a fortune from renting out a spare room. At least a few people in your network – friends, family or co-workers – will tell you how easy it is. A search online will bring up endless reports on how the industry is booming. While it is indeed possible to succeed in the short term rentals market, it is by no means as easy as it seems however.
Today, we’re taking a closer look at some of the biggest myths, misconceptions and outright lies that abound. Hopefully, this will help you read between the lines when buying an investment property so that you know exactly what to realistically expect.
Myths to Avoid When Buying an Investment Property
Make no mistake… buying an investment property is exciting. Whether you have your eye on a modern, compact apartment in the heart of the CBD, or you have the budget for a luxurious sea facing villa, investment properties offer plenty of potential. At the same time, they can also be extremely hard work. Like most things in life, nothing worthwhile is easy. A few myths to avoid when buying an investment property include the following:
- Myth #1: The hardest step is creating a listing. We really wish this was true. In reality however, there are a few things to note about short term rentals. If you plan to only provide a room to guests, with no guest concierge or luxury whatsoever, then sure, it will be easy. All you’d need to is make sure that you have clean bedding and a listing that is relatively enticing. If, on the other hand, you actually want to succeed in this business and provided your guests with an experience they will not only remember, but also feel promoted to write rave reviews about, you will have to make some effort. You will need to consider working with an experienced short term property manager, in order to ensure that your property is expertly managed on a day to day basis. With a manager, you will also have the benefit of bookings management, guest services and active marketing across multiple channels.
- Myth #2: Anyone can manage a holiday rental. In theory, it sounds simple. How hard can it be to be there when guests arrive and make the bed? In reality however, holiday rental management involves a great day of time and effort. Guests expect a high level of quality. Many will be used to staying at luxury hotels and establishments, and will not be happy if they have to put up with sub par accommodation. Unless you have experience and you are able to be on call 24-7, chances are very high that you will not be able to manage on your own. Once again, the simplest route is to consider hiring a dedicated holiday rental manager to assist. Still not convinced? Read our article on the dangers of DIY holiday rental to see why the DIY approach is a bad idea.
- Myth #3: Guest feedback is subjective and doesn’t really matter. A bad review can be extremely damaging to your reputation. More than one bad review can be a disaster. Considering that negative experiences are far more frequently reported than positive ones, it is best to provide a high level of service from start to finish. If you thought that you could delete, ignore or angrily respond to bad reviews by attacking your unhappy guests, you will need to think again. Once reviews are online, they are very hard to remove. Once your reputation has suffered, it is also very hard to undo the damage.
These are just a few of the myths you want to avoid. If you’re ready to get serious about your investment, get in touch with the Totalstay team today to find out about our unique approach to holiday rental management. Once you begin the process of buying an investment property, you will know who to turn to in order to get the best returns on your investment.