If you work with real estate investors interested in diversifying into short-term rentals, it's important to know what works. As a mortgage broker, private lender, or referral partner, your customers are not just counting on you to get the financing done but also to advise them on lucrative investments.
Short-term rentals are a thriving business, with the worldwide vacation rental market expected to hit $99.6 billion by 2028. Investors are seeking to diversify their investment portfolios with Airbnb-type properties, and as a broker, assisting them in successfully navigating short-term rentals can make you an incredibly valuable asset.
Here are 8 critical short-term rental tips you can pass along to your clients so they can get the best returns on their investments—while fortifying your position as their go-to finance expert.
One of the biggest challenges faced by short-term rental investors is comprehending taxation laws. Short-term rental legislation differs significantly between states and, in some instances, even city to city. Some places handle short-term rentals as hotels with occupancy taxes or special permits, while others impose limitations on days a property might be rented in a year.
As a wholesale lending partner, you can add value by making your clients aware of these regulations. Inform them of possible tax burdens and recommend that they seek the advice of a real estate tax professional. The better informed they are, the less risk of compliance issues that may affect their income.
Reviews are the lifeblood of short-term rentals—they have a direct impact on a property's booking rate. Research indicates that 93% of consumers read online reviews prior to making a booking decision.
Advise your clients to incentivize positive reviews by offering small perks to guests, such as a welcome basket or a discount on a future stay. The better their reviews, the easier it will be for them to maintain high occupancy rates—which means a more stable and profitable investment for them and more return business for you.
No visitor is going to enjoy a stay in a rental with a dripping faucet, old furniture, or subpar cleanliness. Visitors are expecting hotel-quality facilities, and those properties that fail to deliver will face negative reviews and low occupancy.
As a reputable mortgage broker or private lender, remind your clients that routine maintenance is not a choice—it's a necessity. A properly maintained property results in:
Encourage investors to hire a dedicated property manager or use professional cleaning services to ensure their short-term rentals remain in top condition year-round.
Pricing a short-term rental too high or too low can hurt profitability. Investors need to stay competitive by monitoring local market trends and adjusting their pricing accordingly.
One of the best short-term rental tips you can give to clients is to employ dynamic pricing software such as AirDNA or PriceLabs. These programs study seasonality, local events, and demand shifts, so your clients' rates are maximized for bookings.
For brokers, advising clients on these pricing strategies can further establish your position as their trusted expert in real estate financing.
Encourage your clients to invest in energy-efficient upgrades. Not only do these save on overhead, but they also enhance the property's appeal to green-conscious travelers.
Quick energy-saving upgrades include:
Most investors aren't aware that energy-efficient properties sell for a higher resale price—another big selling point you can emphasize as their financing source.
Managing multiple short-term rentals can be overwhelming. Clients who want to expand their portfolios should consider property management software to streamline operations.
Tools like Guesty, Hostaway, and Lodgify allow investors to:
By recommending these tools to your clients, you position yourself as a knowledgeable resource who understands the operational challenges of managing short-term rentals—not just the financing side.
A rental listing is a first impression that can make or break bookings. Studies from the Wall Street Journal reveal that renters spend 60% of their time looking at photos when searching for a property. That means high-quality images and a compelling description are non-negotiable.
Encourage clients to invest in professional photography and use descriptive, keyword-rich language to highlight what makes their property special. Incorporating local amenities and selling features will raise interest and booking levels too.
As a broker, what's your part in all this? Show them how well presentation directly boosts rental profitability—and by association, their financing requirements on subsequent properties.
Amenities will differentiate a short-term rental from the competition. Today's travelers are seeking something more than just a bed—a place to sleep is no longer enough; they want an experience.
Encourage your clients to offer amenities that align with their rental’s location:
Properties that have unique amenities have higher occupancy rates and reviews, which drive more consistent return on investment.
As a mortgage broker or private lender, your value doesn’t stop at securing financing—you’re also a trusted advisor to your clients. By sharing these short-term rental tips, you can:
Many investors rely on their brokers for strategic guidance, not just funding. When you equip them with the knowledge to manage short-term rentals successfully, you ensure they keep coming back to you for future deals.
At RCN Capital, we specialize in rental financing solutions designed to help your clients succeed. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate professionals. If you are looking to finance a vacation rental property, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.
Connect with us today to learn more about how we can help you offer competitive financing solutions to your clients.