A vacation rental property can be an incredible passive investment. As a result, the optimal profitability of most luxury vacation rental homes is stifled by an outdated status quo that reinforces a broken value chain. And the worst part is that it sets a woefully low bar for what should constitute success. If you're trying to book the top 1%, you can't advertise for the other 99%.
Your vacation rental should radiate exclusivity. Luxury travelers want to feel a sense of uniqueness in their vacation rental experience. After all, that's why they opted for a vacation rental instead of a standard hotel. However, for luxury guests, another level of service will likely be required, and it will need to be more than exceptional.
You'll have to think about offering concierge service, daily cleaning and laundry, 24-hour maintenance, 24-hour calls, and that's just the tip of the iceberg. Other luxuries to think about could be personal chefs, mixologists, yoga gurus, surf instructors; you'll also need to decide if these services are included or available as an add-on. Most luxury vacation homes available in any particular market can be beautiful in their own way, but because most of the available homes are not optimized for marketing and rental operations, or for the demands of the wealthiest travelers, most markets overwhelm travelers wealthy people with an exceptionally large number of mediocre and expensive options that are simply not in demand. What's more, unlike other types of investment properties, the value of luxury vacation homes is not directly related to their income potential in the same way.
While you may be able to enjoy your new vacation home from time to time, never forget that it is an income-generating asset and should be treated as such during the buying process. In addition, there is also a concern to properly furnish and decorate the luxurious holiday home. A luxury holiday home in a large market is naturally attractive to both regular buyers and investors, with a much wider audience of potential buyers. Alternatively, if a luxury real estate market or homeowners association (HOA) implemented new regulations to exclude vacation rental activity, the value of the luxury home is likely to increase as a result of its new exclusivity.
Thanks to Airbnb and other vacation rental websites, making money with vacation rentals has become much easier than ever. We've already provided you with an excellent list of cities where you should consider buying a vacation rental property. Vacation home rentals are a type of real estate investment that falls under the category of short-term rental properties. More recently, where multi-unit family buildings have been disadvantaged by eviction bans, where office buildings have been paralyzed by a mass exodus of office workers, and where retail has been shocked by e-commerce, home prices from Luxury vacations in key markets have exploded and booking activity followed suit.
As mentioned above, most luxury vacation homes will not be able to reach their full potential due to the poor performance of property managers, who are content with an outdated status quo that reinforces a broken value chain, which has set an unacceptably low bar for what constitutes the success in the industry.