The coronavirus pandemic and subsequent safer-at-home mandates put quite a dent in the 2020 travel industry. If you or your self-directed IRA own vacation rental investments, chances are, the returns on those assets suffered, too. As we settle into 2021 and as more Americans get vaccinated, many of us can begin to travel more freely again if we choose. So, now is a good time to ensure your investment property is fit to attract vacationers who are ready to travel.
Last year many Americans cancelled international travel plans. But many people 
continued to travel and vacation within the United States. In light of the pandemic, road trips dominated the industry. Domestic travel in the U.S. is on the upswing this year, and that trend is expected to continue as more people get their vaccinations.
In fact, The 2021 Vrbo Trend Report states that 82 percent of American families have plans to travel this year. Of the people surveyed in that report:
- 65 percent plan to travel more than they did before the pandemic
- 33 percent want to spend more time vacationing than they normally would
- 54 precent say they’ll try to travel to destinations on their bucket lists
So, people want to stay safe, but they also want to live life. As an investor, you can cater to both.
Below are a few ideas and tips that can help you capitalize on existing rental investments. Whether that property is a personal asset or held in a real estate IRAs, there are many ways to increase the earning potential of your investment.
Rethink the Purpose of Your Vacation Rental Investment Property
Turn your rental into a flexcation destination.
In the height of the pandemic last year, flexcations were born, with vacation rentals topping the list of destinations families chose. These trips combine the rest and play of a vacation with the flexible work schedules for parents and virtual school schedules for children. Vrbo reports that 67 percent of those who took a flexcation last year would do it again.
Make way for the snowchicks
The way people travel and how far some are willing (or able) to go has changed a bit due to the pandemic. Snowbirds from Canada are staying put due to continued closed borders between the U.S. and Canada for non-essential travelers. However, a new breed of travelers called “snowchicks” have emerged that can make up for the loss of your typical snowbird rental income.
Snowchicks are a younger generation of snowbirds who have transitioned to working from home and realize they can do so from anywhere in the U.S. Those from the north seeking a change of scenery enjoy beachside condos, while southerners venture north to enjoy cooler, less humid temps in the mountains.
Extend typical short-term rental agreements to allow longer stays.
This is a great move if your vacation investment properties are typically short-term condo or house rentals. Instead of limiting stays to a week or two as many of these properties do, extend that rental term to accommodate those who desire longer stays—and offer a discount. A recent Airbnb survey revealed that during the pandemic, 20 percent of Americans rented vacation homes for 28 or more days; and 24 percent of those surveyed are planning long-term stays moving forward. As described above, many individuals and families are taking advantage of work-at-home opportunities—and traveling to do so from destinations other than their homes.
Cater to the staycationers
Staycationers are individuals and families who desire a respite from their daily lives, without actually leaving home. In pre-pandemic times, staycation activities included taking a spa day, visiting a local theme park, or attending local performances and music festivals. But a form of staycationing also includes relocating to a rental property that’s close to (if not in) the same town you reside—a change of scenery that’s not too far from home.
This type of post-pandemic staycation is perfect for adults who may have to drop into the office from time to time or tend to other obligations that keep close to home. If the kids are back to physically attending school, families may not be able to leave home. However, that doesn’t mean they have to stay in their house, especially if they were cooped up indoors with the entire family for quite some time last year.
If your vacation rental investment property is located in a city or in the suburbs, entice the locals with the ideal staycation location that caters to all their needs.
Accommodate dog lovers
While there have always been pet-friendly rental properties, many more properties don’t allow pets. Individuals and families who consider their dogs part of the family are looking for properties that allow their furry friends—especially when booking extended stays. Dogs are easy to travel with and having them along eliminates the anxiety many dog owners feel when they leave their pups behind. Pet deposits are common, which costs less than boarding does, and many will happily pay that additional fee for the peace of mind and enjoyment of having their dog nearby. In our opinion (as pet lovers ourselves) allowing pets in your rental will increase its desirability ten-fold.
Boost Your Rental Property’s Overall Appeal
Regardless of who your preferred renter may be, the goal is to continue to earn a consistent stream of income for yourself or in your IRA. Even if you are looking to upgrade rental property to be work-from-home friendly, some of the following upgrades will help attract a variety of vacationers to help make that happen.
- Make sure your property has a solid, uninterrupted WiFi connection with ample bandwidth to facilitate busy internet traffic.
- Consider turning one room of a multi-bedroom property into an office space appropriate for working parents to professionally host and attend zooms. Gaming consoles in a dedicated room for younger generations is also a plus.
- Update available televisions to smart TVs so your renters can easily access streaming platforms such as Netflix, Hulu, and Amazon Prime.
- Extend your rental cost to include passes to local state parks or other safe-distancing activities in the area for renters to enjoy.
- If your vacation rental investment property is near a body of water, purchase kayaks or canoes, or fishing poles and gear.
- Add a volleyball net to the back yard and keep the outdoor grills in perfect working order so people can enjoy the outdoors without leaving the property. Have puzzles, board games, and playing cards for rainy and snow-day activities.
- Plan for pet owners by having dog crates on site so renters don’t have to bring their own. If your property isn’t fenced, consider adding a small fenced-in space for a dog run. If you decide to allow cats, you might keep plenty of cat litter on hand, as well as a cat litter box or two.
Final Thoughts from Advanta IRA
The above ideas have hopefully sparked a fresh and innovative mindset on how you can improve your vacation rental investments. You want to research your rental market to discover the latest trends before making any drastic moves or costly upgrades. But, with a little creativity with upgrades and clever advertising, you can potentially recapture lost income opportunities and increase the desirability of your vacation rental investment.
For information on how you can use vacation rental investments to build tax-sheltered wealth for retirement, contact Advanta IRA today. Real estate IRAs are a popular strategy that help diversify your portfolio in the alternative investment realm instead of depending on stocks, bonds, and mutual funds to fund the retirement you desire.
