Only 20% of American households generate passive income, with the average amount per year being $4200.
This may seem like a small amount, but even it can be life-changing for a family. It provides a financial cushion that gives people peace of mind. They can cover unexpected bills. They can travel. They can use their passive income to ensure a comfortable retirement.
Renting out your cabin could be a good option if you are looking to create a passive income stream for yourself. Let’s look at how to do it.
Why Renting Out Your Cabin is a Good Idea
Of course, some people live in cabins full-time, but many invest in a cabin as a second home. So, when they aren’t living in it, what happens? It sits empty and they still have to cover the bills for it.
You can do this and make extra money by renting out your cabin when you aren’t using it. Many people are interested in getting the cabin experience year-round. Why not provide that experience and be compensated for it?
Use the extra money to pay bills and enjoy travel and other experiences you’ve always wanted to. You can also use the funds to save for retirement, which is a good option as real estate investing tends to be a stable and inflation-proof method of generating income. And once you’re in retirement, you can use the income you make from renting out your cabin space to supplement your savings.
Renting out your cabin can be incredibly lucrative. But you must know what you’re doing.
Tips for Successfully Renting Out Your Cabin to Vacationers
Putting up a listing on a vacation rental site and hoping for the best won’t get you the passive income you’re looking for. Instead, you must approach the process strategically. Here are four tips for effectively renting out your cabin and creating a consistent passive income stream.
Make your Cabin Worthwhile
Before you do anything, you must ensure your cabin is worth renting. People won’t give your cabin a second look, let alone actually rent it if there’s nothing unique and enticing about it. Vacationers go to cabins for the experience. Ensure yours provides a memorable one.
Hopefully, you’re cabin is already in a great location. Aside from that, incorporate features that add value to your property. For example, you can add a pool to your cabin. Ongoing maintenance is necessary and the installation costs can be high, but a pool can increase your property’s value and attract more vacationers if you're not near natural water.
Make sure your aesthetic is welcoming and cozy and consider adding these features as well:
- Fireplace inside;
- Open kitchen concept;
- Movie room;
- Smart home features;
- Fully furnished patio;
- Outdoor cooking area;
- Spacious front porch;
- Natural landscaping.
Continue to add to your cabin and make upgrades as you receive feedback from renters to stay competitive and stand out.
Set Competitive Rates
One thing that can turn vacationers off from renting your cabin is the price. If it’s too high, they’ll move on to one more affordable. If it’s too low, people may think your cabin isn’t as good as the others similar to yours.
You must set competitive rates to attract quality renters. Research cabin rentals in your area and see what their rates are. Look at what they’re charging nightly and how those rates change during holidays and peak seasons. Your rates should land somewhere in the middle. You can also use a pricing tool to help you set competitive rates.
Manage the Logistics
If renting out your cabin requires jumping through too many hoops, potential vacationers are less likely to do so. So, make sure the logistics are handled.
If you want your rental to be successful, you will need to ensure the booking process is simple. Keep track of who’s booking your cabin, when and for how long to lessen the chances of double bookings.
Also, give clear directions for how to check in and out of your cabin, including:
- Where they can find the keys to get into your cabin;
- Where to return the keys when they check out;
- If spare keys are available;
- If you’ll be on the property or close to it;
- Parking and transportation options;
- Any alarm codes or security systems they should be aware of;
- Who to contact and what to do if they have any issues.
Finally, if someone needs a refund or to reschedule, accommodate these requests to the best of your ability. Exceptional customer service is a core component of renting out your cabin. When you take care of your renters and ensure they have a good experience, they’ll rave about it to others. And that, in turn, will keep vacationers flocking to your property.
Market Your Cabin Effectively
If you want vacationers to come across your cabin in their search for the perfect place to stay, you must market it effectively. You need to be where people searching for cabin vacation rentals are and develop relationships with these potential renters.
You can start on vacation rental platforms. The people you’re trying to attract are already visiting these platforms on their own. But you do have to do a bit of work to direct traffic to your specific rental listing. Make it enticing, with an attention-grabbing headline, a detailed description that highlights what makes your cabin unique, and high-quality photos that show off all your property has to offer.
Consider marketing your cabin rental on social media too. It’s a way to make direct contact with potential renters and consistently get your cabin rental out to the masses. Combine professionally shot images with short and long-form videos to give a glimpse into the experience your cabin provides. Be sure to engage with your followers regularly as well.
Renting out your cabin to generate passive income is a wonderful idea. But you must ensure your cabin is worth renting, competitive rates are set for it, the logistics are handled, and your marketing is on point to be successful.