
In the recent article about NOVA investment strategies, we have introduced three investment project types presented on Headway NOVA. One of the most interesting from the point of view of business and excitement is the Holiday Home strategy, also known as a short-term rental (STR). Today, let’s study this strategy in greater detail.
What are holiday homes?
Despite their name, holiday homes are not exclusively for leisure or holiday purposes. This strategy involves renting out a property for short durations, such as daily or weekly, often targeting tourists or business travelers.
Like long-term rentals, Holiday Home projects offer two main benefits to its investors:
- Rental income. They generate earnings from frequent, short-term stays.
- Property appreciation. Over time, this property’s value increases.
Why choose a holiday home?
Higher rental income is the primary reason why investors favor the Holiday Homes strategy over long-term rentals. Tenants pay higher prices for a shorter period, which sums up a higher ROI for investors when they have multiple tenants in their vacation home.
However, investing in vacation homes on your own comes with certain challenges. Holiday homes carry greater risks and demand a solid understanding of the short-term rental business. Managing the property requires more effort and expertise, and occupancy rates can be less predictable.
If you want to manage a holiday home yourself…
Consider expenses
Running a short-term rental involves more diverse and frequent expenses than long-term rentals. These costs are typically offset by higher rental income, but careful cost management is crucial.
While it’s possible to create a luxury hotel-like experience for guests, if it is too costly for you, too expensive, or simply unnecessary for your guests, it can lead to reduced profitability or even losses. Striking a balance between offering excellent service and maintaining cost efficiency is key.
Meet market expectations
Short-term rental platforms function like competitive shop windows, showcasing numerous listings. To attract guest attention, properties must have high-quality photos, good appearance, and strong ratings.
Managing a short-term rental business goes beyond routine tasks like coordinating check-ins and check-outs. Operating a short-term rental property is akin to running a full-scale business with a variety of responsibilities. From regular laundering, and handling overstaying guests to an in-depth understanding of the algorithms used by different short-term rental platforms. Successfully managing a short-term rental business demands significant knowledge and dedicated effort.
Properties in remote locations, such as mountain cabins, can present additional management challenges.
Comply legally
Operating short-term rentals means complying with local regulations, which can sometimes be complex and unexpected. A thorough understanding of local laws and strict compliance is essential to avoid issues. Moreover, property owners must ensure their rental business doesn’t disturb the local community.
Invest in a Holiday Home strategy with Headway NOVA!
At NOVA, we implement strategies to effectively manage the risks associated with short-term rentals and unlock their full potential. We take the hard part and keep the best for you.
You are free from responsibilities
Recognizing that short-term rentals are an active business, we collaborate with top-notch professionals. Through our partnerships with property management companies, we focus on optimizing marketing and pricing strategies to achieve high occupancy rates and consistent income. These companies also manage daily operations, ensuring properties remain in excellent condition and guests enjoy a five-star experience. You do not need to manage anything yourself.
You know it is profitable
We carefully analyze and manage operational costs to ensure our properties remain profitable despite the higher expenses of short-term rentals. We use data-driven software and platforms to gain insights into market trends, make informed decisions, and maximize returns. You may check the actual ROI and financial details for such a project that is currently available in the app.
You know it is regulated
We prioritize adherence to local laws and regulations, safeguarding your investments, and maintaining operational continuity.
Conclusion
The Holiday Home strategy undoubtedly is all about dedication, effort, and a touch of creativity for investors. However, when approached thoughtfully and executed effectively, these efforts are well rewarded with strong profitability and the satisfaction of delivering an exceptional guest experience.
NOVA provides you with the generous profit a holiday home can generate and makes investing in such a project easy for you! Install the app now 💚
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