If there's one area of real estate investing that's really taken off this year, it's short-term rentals. Demand for these properties has been high since the start of the pandemic, in fact, as travelers have shifted from booking hotels to wanting more privacy and space when on vacation.
If you own a vacation home, or a series of properties, that you rent out on a short-term basis, now's the time to make some strategic moves that'll set you up for an even more profitable 2022. Here are a few to check off your list before 2021 wraps up.
1. Make your property more winter-friendly
If you own a short-term rental that caters to wintertime guests, like a ski chalet, you may not have to do much to get it in shape for the upcoming season. But if you own a beachfront property or lake house and you're hoping to draw in wintertime guests, you may need to make some changes -- quickly.
For one thing, you'll need to make sure your home's heating system works well, and if it doesn't, a near-term upgrade may be in order. After all, no guest is going to want to spend a week away shivering through the night. You may also want to upgrade your property's windows, doors, and insulation if your goal is to market it as a viable rental through the coldest part of the year.
2. Price your rental competitively for the off-season -- or the peak season
If you own a beach house, your short-term rental may be a tough sell during the winter. And on the flip side, if you own a ski house, the start of the new year could be your peak season for bookings.
Either way, now's the time to start crunching numbers and doing your research to see how to price your rental in the new year. Keep in mind that because of generally strong demand, you might manage to command a higher price for your rental than you normally would. See what other properties in the area are asking for rent, and come up with a strategy that works well for your home.
3. Decide whether it pays to grow your portfolio
Because the demand for short-term rentals is so high, and it might stay high well into 2022, now's a good time to consider adding another property to your personal mix. Of course, right now, property values are also sky-high, so you'll need to take a look at your finances and make sure you're in a strong enough place to make that move. The good news, though, is that mortgage rates are still sitting at competitive levels, so if you need to finance your next vacation property, you may be able to do so quite affordably.
4. Consider unloading a property while demand and home values are high
Even if your short-term rental is generating a decent stream of income, you may want to free up cash for other investments, whether it's buying into a commercial property or putting more money into REITs (real estate investment trusts). Because property values are so high right now and attractive mortgage rates are driving an increase in buyer demand, now's a really good time to sell a home. Think about whether that makes sense for you.
The Millionacres bottom line
While 2022 might still seem far away, it'll be here before you know it. Make these moves in the coming weeks to set yourself up for success once the new year begins.