Make Money from Your Vacation Rental

 

I'm Beth Carson, a vacation rental expert, and I own an Airbnb in Fiji, one of my favorite places on the planet. What you may not know is that I live in Asheville, North Carolina, which is 24 hours away. Let me tell you a little bit about the back story of how I ended up with a vacation rental on this dream island.

I had been to 35 countries when I went on a FAM (familiarization) trip, as a travel agent, to Fiji.. We got to see Denarau and along the Coral Coast. Then we came up to the very northern top. It was a long ride and we all thought, "Is this going to be worth it? We are tired. We have been going from 7:00 am to 11:00 pm all day." But we got here, and I fell in love. And now, this is where my house sits. If you look at the island of Viti Levu, there’s nothing more northern than my house. I am the very tippy top.

I love Europe. I love architecture. I love café culture, history, and the museums. I actually at one point was on a program in college to become an art curator. I've taken a ton of art history courses. But, this was the first place on the planet that I felt at rest. My soul was at rest. And I thought, "I have to buy a place here."

New Zealand and Israel were the only two countries that I ever considered living in. New Zealand especially hit me hard. I just fell in love but I was too young and wasn't able to make the transition because I didn't have enough money in the bank or a job that nobody else in the country could do.

So, fast forward a few years, I'm in Fiji. Then fast forward another two years, and I gathered the money and was able to buy a plot of land on the South Pacific ocean with a view of three islands that are a mile away. I know somebody who swims one way and kayaks back the other day. Then the next day, he kayaks there and then he'll swim back. So, they really are close. I'm on a point so you can't see any other houses. You feel like you've got this out-island experience but we have mainland conveniences. We have regular power. We don't have to live off a generator. You don't have to deal with a boat to go anywhere… it's just an ideal setup.

I’ve been a real estate investor for at least 15 years. And I’ve done note buying, which I hated. I have built properties. I have rehabbed properties. I am in commercial and residential. I have 16 long-term rentals in Asheville. So, one of my criteria for buying a property is it has to make money immediately. I don't base buying a property on appreciation.

Now, of course, you can have building time. That's okay. I don't mind that. But it has to pretty much make a profit from day one. All 16 of my properties in Asheville make about a hundred dollars a month, steady. We hardly have any vacancies and if we do, they're snapped up quickly. I've got figured out what the market is interested there and I'm able to deliver it.

Back to my home in Fiji… I bought it with the understanding that I would come here and holiday for January, February, March, and the resort would rent it out for me and handle everything. They guaranteed me 25% occupancy and I would get 25% of that amount. Well, the story ended differently.

It didn't work out that easily and, while I was building the house, the resort sold. I was appalled because the new resort owners had plans to double the occupancy of the resort. They were going to double it in size and they didn't have the bandwidth to deal with my property.

So, I'm stuck with this half-built house that’s 24 hours door-to-door from my house, in a culture that I don't fully understand, that has a lot of Australian, New Zealand divers coming… so I panic! I start researching classified ads in dive magazines in Australia and New Zealand to get people to come over here. I put it on the market and, while I was in that frenzy of, "What the heck am I going to do with what has gone from my dream house to this ball and chain that's taking me down pretty quickly," I found the secret sauce. I found this recipe that's called the Carson Method. Where I've learned that balance between guest satisfaction, amenities, and profit.

My first booking was June, 2005. It was for a month and I made $2,000. I was really happy with that. Now, in high season, I make $450 a night. So, it's quite different. In the last 10 years, I’ve discovered through trial and a lot of error, tens of thousands of hours of studying the market, studying what other people are doing, going to conferences, talking with experts, what it takes to make guests really happy. What it is they want and how to earn top dollar from that. This is something that you can do, too.

It's not super complicated. There are steps that you have to follow and you have to really care about your business. Even if you're working with a property management company, you should be able to work out a deal with them where you can supplement their marketing. You can make the difference between 30% occupancy. You can bring it on your own with effort up to 70% occupancy without a whole lot of effort.

Most of the work that you're going to put into it is going to be right after you get the house built, or you purchase it and it's furnished. It's going to be a very intense period of time where you're getting your marketing all set up. Then, you're going to probably do what I do, is work about two hours a week on it. I answer emails and I tweak things. When I come to Fiji, I make videos. I take pictures and I write blog posts.

What a lot of people do is they buy the property, they get it furnished, and then they lose steam. That's the biggest mistake you can make because what drives the engine of profit is marketing. I can teach you how to do that.

So, I hope that you can see that this is a way to pay for your retirement by having somebody else pay for it and you’ll consider vacation rentals as a potential for your portfolio for retirement.. Because I make a profit on this. I don't just cover my expenses. Our family lives off of this money. This is part of my income. And not only that, it is appreciated. It is now worth more than double what I paid for it. And because I have a website and listings - I'm on listing sites, I have forward bookings and a history of 85% occupancy – my house is valued at $200,000. That’s $200,000 Fijian dollars, so it's about $100,000 US dollars higher than if it were just a house.

So, even if you plan to sell a home, it's a good idea to put it on the vacation rental market, get some income, get some bookings going, and then it's much more appealing. It's a turn-key business that somebody can just step right into.

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