When it comes to how much money to save for upgrades, we suggest saving at least 10% of your rental income. We recommend a percentage over a dollar amount, as not everyone’s property will net the same value. Keep in mind as you are planning to upgrade your property that guests want to stay somewhere that is as nice as or nicer than their own home. Put that 10% toward enhancements throughout to entice repeat guests to return each year. For example, if you net $50,000 annually in your vacation rental, you should be putting away $5,000 of that amount.
Although, keep in mind the chances of you spending all of that $5,000 in one year are slim. The amount may vary from year to year depending on what work you’re doing in your property. If you have plans for large-scale renovations, then you’ll need to save more than 10%. If you’re planning to simply repaint the walls, that is not as costly as replacing the couch or mattresses. Saving that 10% will help alleviate the cost of replacing expensive appliances, like a dishwasher, refrigerator, or washer and dryer.
Also, keeping your vacation rental up to date is key in establishing top dollar and repeat guests. This includes a fresh coat of paint, new furniture, or monitoring the health of your appliances. By replacing furniture before it needs to be replaced, you ensure good reviews and happy guests that want to come back to your property year after year.
Answering questions like how much money to save for upgrades is just one component of our vacation rental management services. Contact our revenue team today to find out what Southern can do for you!