Diving into the short-term rental game can be a fantastic way to make extra money, and it’s an exciting business to run. Before you start daydreaming about the cash rolling in, you have to know it’s not just about handing over keys and wishing for the best. To make bank, your STR needs to be a well-oiled machine, and that starts with making smart moves from day one. Getting it right from the jump will save you a ton of grief. Let’s get into the nitty-gritty with five tips to get your first property crushing it.
1. Location is Everything
You’ve heard it a million times, and for STRs, it’s the absolute truth: location, location, location. Where your property is located will make or break you. Don’t just buy a house you think is cute; buy one in a spot where people actually want to stay. Do your homework. Is it near the main attractions? A cool downtown area? A convention center? Being near these spots is a no-brainer for getting heads in beds. Also, check the local laws. Some cities are super strict or have crazy high taxes on STRs, which can wreck your profits before you even get started. A great property in a dull location is just a house. An okay property in a fire location? That’s a money-printing machine.
2. Make Your Property ‘Gram-Worthy
People book with their eyes. Your photos do the selling, so the place itself has to look good. You don’t have to blow a fortune, but you do need to put some thought into the design and what you offer.
- Catch a Vibe: Don’t just throw random furniture in a room. When everything matches, it just looks like you know what you’re doing.
- Go Beyond the Bare Minimum: Blazing-fast Wi-Fi is a must. A smart TV with Netflix is expected. Think about the little things that make a stay awesome. A quality coffee maker, a list of your favorite local spots, or a small welcome basket can turn a good stay into a great one.
- Comfort is King: Splurge on a comfy mattress and nice sheets. A terrible night’s sleep is the fastest way to a 1-star review. Guests are paying for an experience, and that includes being comfortable.
3. Get Your Pricing Strategy on Point
Setting one price and calling it a day is a total rookie move. The STR market is always moving, and your prices should too. If you want to make top dollar, you have to play with your rates. See what your competition is up to. What are similar places charging? Use dynamic pricing tools like PriceLabs or Wheelhouse. They automatically change your prices for seasons, local events, holidays, and even weekends.
4. Automate Your Hustle
The dream is passive income, right? No STR is ever truly hands-off, but you can get close by automating a bunch of stuff. The goal is to make things super smooth for the guest without you having to lift a finger for every little thing. Get smart locks with unique codes for each guest to ditch the key exchange. Set up automated messages for booking confirmations, check-in details, and check-out reminders. The absolute most important thing to automate? Your cleaners. Find a reliable cleaning crew that does a perfect job, every single time. A spotless property is the bedrock of a five-star review.
5. Get Smart With Your Money and Taxes
An STR is a business, so you must treat your finances accordingly. Track every single expense from the mortgage to the coffee pods, to know if you’re truly profitable and to prepare for tax time. The tax rules for your income and the deductions you can take against your day job’s salary can shift, depending if you are actively involved or not.
If you meet the IRS rules for “material participation,” you can use STR losses (like depreciation) to lower the taxes you owe from your W-2 salary.
Discipline and Success
The success of your short-term rental extends far beyond guest satisfaction. It requires a disciplined, business-minded approach to your finances and a proactive tax strategy.