Short Term Rental 101 Series- #3 A Big Picture Look at Property Amenities

Article 3 of MN Real Estate and Management’s Short Term Rental 101 series delves into the layout of the property and how the layout affects amenities, which are often influenced by the property itself. This article explores various facets of developing and managing short term rentals, with a focus on property analysis. My goal is to  assist prospective buyers considering property purchase for short term rental purposes, as well as current property owners contemplating developing a vacation rental, this series offers some valuable insights based on several years of hands on experience in Central MN.

Through those years of experience, I’ve gained insights into what distinguishes successful short term rentals in our region from those that face challenges. Having been engaged in the entire process, from initial development to ongoing management, of over 50 rental properties, I’ve witnessed both remarkable returns on investment and instances of struggle. I’ve gained an understanding of the factors that attract guests. When working with owners we have developed detailed lists and recommended tailored amenities to cater to specific guest demographics. This is partially driven by the property. For example a home on a nice fishing lake is going to be partially focused on folks coming up with boats to fish.

While it’s undeniable that certain properties naturally excel while others require more development to reach their full potential, there’s a clear distinction between properties with inherent advantages and those that may never achieve the same level of success. In this article, I will go into some of these key attributes that significantly influence a property’s performance in the greater Brainerd Lakes’ short term rental market.

As they say in real estate “location location location” there is no doubt that the location of a property either helps a vacation rental or makes it a little bit more difficult. I always ask people to step back and ask themselves why are people going to choose to come to this property? So the lake the property is on of course can make a big difference. We have had some phenomenal success with properties very close to Brainerd/ Baxter because we’re picking up all the traffic of everyone coming up for sports events, weddings, golfing, things like that. That being said, I have seen very successful VRBO’s on quite small lakes. Location is not always a make or break factor but it is certainly one to be considered. When analyzing the potential profitability of a vacation rental.

As previously mentioned in articles one and two, the layout of the property plays a crucial role, particularly in our industry where accommodating larger groups can exponentially increase profitability compared to smaller ones. It’s worth reiterating that having three to four bedrooms is ideal, as discussed earlier. Properties that can accommodate more than 10 to 15 guests are relatively scarce in the area, making them highly sought after in terms of occupancy.

Another crucial factor to consider is the layout of the home, particularly the availability of multiple gathering spaces. It’s highly desirable to have at least two areas designated for socializing, typically an indoor living room and family room. Some properties even feature specialized spaces such as a theater or game room. It is best to have multiple places indoors and outdoors, having two distinct hangout spots—one catering to older adults and another tailored for younger guests—is ideal for accommodating diverse preferences.

While I don’t want to dissuade anyone without a swimmable beach, having one can be incredibly valuable in the world of vacation rentals. I’d venture to say that a decent swimming beach can increase summer rental value by at least $100 per night in the summer. When aiming for a 90-day rental period, this is certainly an added value. However, as long as the beach is suitable for swimming, we generally fare well. Sometimes, it’s possible to develop a sand beach, but there are various DNR regulations to navigate, and in certain cases, such development may not be permitted. It’s important to investigate and determine the swimability of the current beach. Depending on the lake, this factor may be less crucial, but I always inform guests about the beach’s quality and clarify whether it’s suitable for lake swimming. On most places I always tell the guest that it is certainly “lake swimming” most of our guests understand and have realistic expectations.

Another crucial aspect to evaluate in a vacation rental is the quality, size, and privacy of the yard. Guests typically expect a well-maintained yard with amenities like a fire pit and space for outdoor games. Properties with larger yards and greater privacy, where neighbors aren’t in close proximity, tend to be more desirable. We provide detailed lists of amenities, including various outdoor games such as volleyball, spikeball, and bean bags, which enhance the rental experience. A scenic patio overlooking a lake, coupled with a spacious yard for recreational activities, can significantly enhance the overall appeal of the property. I think this is one area where Central MN really excels and having some room is more important in our area than in many vacation destinations. Outdoor dining and grilling is a huge part of what we do in the summer.

I’d like to emphasize that we don’t aim to discourage anyone considering a property that may lack these features. However, when analyzing a property and assessing comparables, it’s crucial to consider how the layout and amenities available can impact the types of groups interested in renting. I often emphasize that we’re not just renting property; we’re selling an experience. The more owners and management companies grasp the experiences that most guests in this area seek, the better equipped we are to analyze and develop properties for maximum profitability.

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