Seasonal rental profitability essentially depends on good management policy and measures to optimize the rate of return. For seasonal rental investment, discover in this article, what you can really expect in terms of profit.
What is a seasonal rental?
Seasonal rental is generally defined as a short-term contract, concluded for the holiday period between two individuals, or through a rental agency.
Seasonal rental: a real driver of profitability
Seasonal rental is recognized as a very good investment because the rate of return is 10 times higher than that of conventional housing (bare housing). When you have a furnished property (room, cottage, residence…) that you do not use, you are more likely to make a great profit by offering it for rent.
Rental investment risks
Investing in a rental property does not always mean that profitability is assured. That said, seasonal rentals sometimes have setbacks that can lead to a significant deficit. This deficit can be the result of mismanagement, the bad location of the property (geographical location) or a bad commercial policy…
The right measures to optimize seasonal rental profitability
To ensure a better return on your rental investment, it is essential to take into account sound management criteria, profitability calculation criteria, location, service delivery methods and visibility.
The criteria of good management
In order to maximize seasonal rental profitability, you need to organize a number of items, namely the expenses and expected income. By fixing the price of the rent, you must arrange to have sufficient income to amortize the expenses made
Profitability calculation criteria
In order to calculate the profitability of the seasonal rental, divide the revenue generated per year by the annual purchase price of the house, then multiply the result by 100.
The profitability of a seasonal rental depends mainly on its location. Rental homes must be located in attractive environments (by the sea for instance), in city centres or in tourist areas. In reality, the price of seasonal housing depends mostly on its location. The more interesting the location is, the more requests pour in, and the higher the prices can be!
Service delivery criteria for exponential visibility
In order to succeed in your seasonal rental investment, you must develop your services visibility. For example, you can create your online seasonal rental site in which you present a descriptive statement of your property; rates, assistance, contacts, etc. In the absence of a personal website, you can publish your ads on platforms dedicated to seasonal rentals.