How to Make Money on a Vacation Rental in Kelowna

Posted by on Friday, July 29th, 2022 at 12:08pm.

Get Your Kelowna Vacation Property to Pay For ItselfThere are many great reasons to invest in a Kelowna vacation home. The city is located in the stunning Okanagan Valley, and it enjoys a warm climate that makes it a popular destination for tourists from all over the world.

Kelowna is also home to many great amenities, including world-class golf courses, ski resorts, and wineries. How fun would it be to own a home away from home in one of British Columbia's top vacation destinations?

Before you jump in, you should know that buying a vacation home is different than a primary residence. Owners with a second home can subsidize their property by renting it out when they're not using it. The passive income from the vacation rental can reduce the financial impact of mortgage payments, property taxes, maintenance, and more. Here's how to make money off of your Kelowna vacation rental.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

Choose The Best Location For Property Values & Rental Rates

Kelowna is growing rapidly, with new developments and construction popping up all over the city. While this is excellent news for investors, it also means that there is a lot of competition regarding vacation rentals. To be successful, you'll need to choose a property in a desirable location.

The best vacation rental properties are located in areas where property values are on track to appreciate, and nightly vacation rental prices are competitive.

From an investment point of view, there are two Kelowna condos that fit the bill perfectly.

The first is Discovery Bay, located on Sunset Drive in Kelowna. Discovery Bay is a 236-unit building located in the heart of Downtown Kelowna. Highlights include lakefront views, scenic walking paths, and convenient access to everything the heart of town has to offer. Discovery Bay condos make great vacation rentals because guests enjoy access to top-notch amenities like two pools, two hot tubs, a sauna, and a gym. The on-site clubhouse features pool tables and big-screen TVs.

Sunset Resort is another great option for vacation investment. This concrete-reinforced building features 128 units and generally has higher sale prices than Discovery. Sunset Resort condos for sale include access to indoor and outdoor hot tubs, ensuring promising rental volume all year round.

These properties also offer moorage in the little lagoon off the property. As an owner, you can keep your boat there, so if you're in town and your place is occupied, you can still enjoy your boat.

When renting on VRBO or Airbnb, they rent for about the same per night. There's a tremendous demand for both properties, both during the high season in the summer and during the off-season. Compared to other tourist destinations in Kelowna, rents are generally a bit lower.

Both properties are zoned "resort residential." That means that as an owner, you're allowed to rent out your property by the night or by the week. Some properties command as much as $1,800 a week during Kelowna's hot summer months. The summer is the vacation owner's best opportunity to get some cash flow.

Owners can book four weeks for their vacations in Kelowna and still get excellent cash flow in their Kelowna vacation homes. Depending on your lifestyle, as an owner, you can use your property in September when the late summer weather is still nice, but the tourists are all gone.

Set Competitive Rental Rates

To maximize your rental income, it's crucial to set dynamic rates. That means your nightly price should increase during popular times and decrease during the off-season.

The best way to set your rates is to look at what similar properties charge for comparable dates. You can use dynamic pricing tools that consider the location, type of property, and amenities to give you a suggested price range.

Once you have a price range in mind, it's important to be flexible. You may need to adjust your rates up or down depending on demand and availability.

Minimize Your Expenses

To be successful as a vacation rental owner, it's important to keep your costs low. The lower your costs, the higher your profit margins will be.

In addition to your mortgage payment and property tax, you may also have to pay "strata fees." Strata fees are community dues that cover the implementation and maintenance of shared property features. These fees are essential in resort-style communities because they fund the amenities that draw guests in.

When renting your Kelowna property as a vacation home, your guests will pay for cleaning. If your cleaning fees are correctly set, items such as soap and toilet paper should be covered.

Depending on where you purchase your vacation home, you'll need to choose between self-managing and partnering with a property manager. There are pros and cons to each.

If you choose to self-manage, you'll be able to keep more of the rental income. However, you'll also be responsible for all the work that goes into managing a property, including marketing, cleaning, and maintenance.

If you partner with a property manager, they will handle most of the work for you. The downside is that you will have to give up a percentage of the rental income. However, with less work on your end, you might be able to increase your bookings enough to recoup the cost.

Ensure Guest Satisfaction

Ensuring a positive guest experience is the best way to ensure long-term success for your vacation rental. If your guests have a positive experience, they will likely book with you again and leave positive reviews. Properties with lots of favourable reviews are more likely to attract guests and can charge more per night.

To increase guest satisfaction, it's essential to set clear expectations from the start. Be upfront about what is and isn't included in the rental.

Another way to ensure guest satisfaction is to over-deliver on customer service. If there's anything you can do to make your guests' stay more comfortable, do it! This could be as simple as leaving a welcome basket with snacks and toiletries or providing a list of your favourite local restaurants and attractions. People renting out Kelowna waterfront real estate might consider adding thoughtful amenities such as inflatable rafts, a wagon, and coolers.

By providing an exceptional experience for your guests, you're more likely to receive positive reviews and repeat business.

Ready to Get Paid For Going on Vacation?

Now that you know how to make money on your Kelowna vacation rental, it's time to find out why they can be one of the best types of real estate investments. Remember to choose the right location for your property values and rental rates, set dynamic prices based on demand, keep your expenses low, and ensure guest satisfaction. With a little effort, you can have your vacation home pay for itself and then some. Are you ready to get started?

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

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