Mo Money Please…! Increase your bottom line by 20% almost overnight!

February 20, 2015

Tips & Tricks

How do I make money with my rental? Is there a way to increase my bottom line during the slow times of year?  The answer is an overwhelming ‘Yes’ and you need to keep reading to find out how!

MoneyHouseI recently attended the VRMA conference in October of this past year in our home town of San Diego.  Along with the great networking, they always have interesting classes. I found one class that focused on how to increase your bottom line, not by increasing rates, but by adding fees for additional services.  Not more fees?!  I can hear the sighs through the internet!  I was skeptical too and the last thing I want to do is turn off a guest by feeing them to death.  Surprisingly enough is that you already probably charge you guests for many of the things I am going to mention.  So what  will guests pay for and what will they simply balk at?

I decided to do an experiment to find out!

So here is what I did.

First, we increased all of our current fees for things.

  • We increased our security damage insurance by $20 (We are considering increasing this by another $20).
  • Increased our early check in/late check out fees to $100.
  • Increased our pet fees.
  • Increased our cleaning fees to include a 20% mark up.

The kicker is that your guests won’t even blink about paying more for most of these services.

Next we started charging for additional services.

  • Portable Air Conditioners – We charge a daily charge and setup fees.
  • Cancellation Fee – We had to do work to book the guest, we should get paid for our time plus it decreases guests that may want to cancel.
  • Travel Insurance – This is more for property management companies as, far as I know, private owners can’t offer this. It is a fantastic product with incredible mark up if you can offer it to your guests.
  • Kid / Baby Items – Charge your guests for portable cribs, pack n plays, strollers, high chairs, and car seats. People don’t mind paying for these items and will love the convenience of having them at the home and setup when they arrive!
  • Activities – What? – In the summer time, each day of the week we offer something that our guests can do. We offer things such as yoga on the beach, boot camp workouts, surf lessons, cooking classes, couples massage, swim lessons, tennis lessons, kayaking at La Jolla Cove, murder mystery tours, ghost tours in Old Town San Diego, and much more.  Seem like a lot of work?.. No… we just partnered with the people who already do this every day.  They take care of everything, treat our guests like VIP’s,  and give us a cut just for pointing our customers their way.  Another benefit of doing this is the relationships and referrals we have made and receive from our partners!JetPacksan_diego_surf_lessons sandiegocookingclasssan-diego-beach-massage

john acro yoga 3

la-jolla-kayak_mediumThis by no means is an exhaustive list. There will be many other things you can do in your particular geographic area. Do you live in a snowy area? Offer a service to shovel the driveways and walks, ski lessons, etc.

Keep in mind, we have only been ‘experimenting’ with these fees since October but the ROI is staggering. We are expecting an additional 20% of income by just doing the simple things mentioned above.  Could you use another 20% of income while not increasing your work load or inventory of homes? I sure can!  The increased fees and offerings will cover the salary of my entire staff this year! Wow!

The really cool thing about this, and what the speaker stressed at the conference is that these fees are fixed. They aren’t variable like our rates for low and high seasons. What does that mean to you?  You get a more consistent and predictable flow of cash into your business even during the slow months.  Our slowest months in San Diego are January and February and I can tell you the additional income has made these months much easier financially.

So… I encourage you to experiment with fees and additional things you can offer your guests. You will be amazed at what it does to your bottom line!

 

 

 

 

 

 

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About Greg

Greg is the owner of Pacific Coast Vacation Properties, a high end vacation rental management company located in San Diego, CA. He also owns a full service real estate brokerage company that helps owners buy vacation rental and commercial property. In his spare time, Greg volunteers for Habitat for Humanity and other charitable groups in San Diego.

View all posts by Greg

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