Being a vacation rental owner in 2020 was no day at the beach, to say the least, but thankfully the summer sun of pent-up travel desire is here to chase away the pandemic clouds. And many short-term rental investors are taking advantage of that demand by raising their rates to help make up some of that lost revenue.
If you're looking for a way to rev up your short-term rental returns, rather than simply charging more for the same stay, you may want to consider whether providing the use of recreational toys like watercraft or ATVs with your property could create more value for your guests -- and more top-dollar bookings for you.
Let's explore some of the costs and concerns and see how they balance out with the potential advantages of these investments.
Finding the perfect fit
You'll want to consider not only the property itself but also your guest demographics in deciding what types of recreational vehicles, if any, would be the right fit for your rental. If your area tends to draw a lot of college kids and/or younger couples or groups, you might want jet skis for waterfront property or ATVs for some acreage. And a wide variety of guests might enjoy kayaking or canoeing if your home sits on an attractive waterway.
Brand-new jet skis start at around $5,000, but of course, you can buy used ones for less. Costs like insurance and maintenance vary considerably, but you can expect to pay a few hundred dollars per year per vehicle. You can purchase kayaks and canoes starting at a few hundred dollars each and can insure them starting at around $100 a year. New ATVs start at around $3,000.
Do travellers visit your region for the fantastic fishing? A bass boat is a significant investment, with even a good used boat coming in at over $10,000, and you can expect to pay a few hundred dollars per year for boat insurance, but it could be a huge draw for the right property.
If your area attracts an older crowd or families with young children, a pontoon boat or all-terrain golf cart could be a desirable option. A regular golf cart could also be a nice perk in an area where recreation and shopping are nearby and easily accessible, like in a master-planned community. Used pontoon boats start at around $10,000, and you can pick up a used golf cart for as little as $2,000.
Dotting i's and crossing t's
There are, of course, legal concerns to think about when providing vehicles for the guests staying at your property. Attorney Andrew Maguire with McCausland Keen & Buckman has these three pieces of advice:
- The security deposit must cover the property owner against theft and damage.
- The rental contract must clearly delineate that the vehicle must be operated in compliance with applicable law (for example, in many states, a person must be at least 16 and have a safety certificate in order to operate an ATV).
- Depending on the value of the boat or vehicle, it might be wise for the owner to run a background check on the prospective renter.
It's always a good idea to check in with a real estate attorney when making any changes that will impact your rental contract.
A boon for business
Chris Adams, founder of ModestFish, provides the use of a pontoon boat, kayaks, and jet skis with his two lakefront properties in Fort Lauderdale, Florida. Rather than raising rates, Adams uses these tools to stay competitive, which he found an effective strategy even as the pandemic left many properties vacant.
"We really believe that our offering of these little recreational extras are what is keeping us ahead of the competition," he said.
His guests are fully insured and required to pay for gas and incidentals, as stipulated in their contract.
The Millionacres bottom line
Adding the appropriate recreational vehicles to your property can be a considerable upfront cost and will add to the time and expense required to maintain your rental. But for the right properties, doing so could elevate your guests' vacations from a nice stay to a memorable experience -- one worth paying more for, planning future trips to, and writing glowing reviews about.