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Galveston Getaways: Optimizing Beachfront Properties for VRBO & Airbnb Success

Running a vacation rental business in a beach town is savvy for a lot of reasons: lots of tourism, interesting locales, and pleasant weather. However, if you've already started investing in Airbnb or VRBO markets in a coastal city like Galveston, you may be wondering how to boost your passive income.

At Vello, we're all about getting you the biggest bang for your buck when it comes to short-term rentals in Galveston with Airbnb management. So let's explore ways you can optimize your beach property and elevate your side hustle to a main source of income!

Define Your Short-Term Rental Goals

First of all, you need to make sure you have a plan. Whether you initially drew up a long-term strategy before looking at a single property or jumped into the vacation rental game feet-first, you should take some time to carefully consider what you want to get out of this business.

Do you fancy yourself a real estate investor with year-round rental properties? Do you have a vacation home that you'd like to have to yourself during the off-season while renting it out the rest of the year? Are you merely looking to make a little extra money with Airbnb and VRBO, or do you hope to make beach rental investments your main gig someday?

The answers to each of these questions will help guide what kind of property to purchase if you don't yet own a beachfront investment property or are looking to add extra properties to your portfolio. They will also determine how much money you should put into upgrading your vacation rental home.

For instance, if you plan to use the rental home for yourself during the off-season, you may be interested in making certain changes that you wouldn't necessarily be interested in pursuing if the beach house were only a real estate investment that you never planned on living in.

No matter what your beach house investment goals are, you need to define them clearly before you get too far ahead of yourself. 

Do Your Research

It may be a cliche, but only because it happens to be true: the three most important words in real estate (including beach real estate and the vacation rental market!) are location, location, and location.

At the same time, a VRBO or Airbnb property is about a bit more than just location. In addition to researching where a potential rental property is located, you also need to take into account potential furnishings, the housing capacity of the property (couples, family vacations, etc.), expected property taxes, and more.

You should also investigate the key Airbnb and VRBO metrics of competing short-term rental (STR) properties in the neighborhood, such as average daily rate and occupancy rate. This data will give you a clearer idea of how much you can expect to earn after investing in a given property in that area.

Understand Galveston Property Taxes and Additional Management Costs

Galveston is a beautiful town in America's biggest state, which makes it a popular spot for tourists looking for a beach vacation (the city gets more than 7 million visitors per year!). This certainly makes it a smart spot for a savvy VRBO or Airbnb investor.

However, you always need to know any local rules or costs associated with property investment, including in this gorgeous city on the Gulf Coast.

The State of Texas is very open to vacation rental businesses, going so far as to outlaw any city or county government from passing any rules that would ban short-term rentals. In return, the state simply requires Airbnb and VRBO hosts to register with the state comptroller as STR business owners and pay a one-time fee, as well as pay the statewide Hotel Occupancy Tax.

Galveston also charges a local Hotel Occupancy Tax that is owed either monthly or quarterly, depending on how much in taxes your business owes per month.

Obviously, you'll also be responsible for any annual property taxes that apply to your vacation rental home. The City of Galveston currently has an average property tax rate of 1.65%, which is a few points above the national average property tax rate of 1.10%.

Apart from any obligations to the government, you also need to take into account any additional property management costs associated with owning and running a vacation property. These include maintenance and furnishing requirements resulting from the beach's salty air and humidity, as well as hiring cleaners (if you decide to outsource that task) and paying for insurance against natural disasters.

Rental Property Optimization Strategies

Apart from doing your homework ahead of time and investing in a smart Galveston-area property, there are plenty of other methods you can use to boost your passive income through the Airbnb or VRBO platforms.

You might be tempted to upgrade or overhaul part of your rental property, such as installing a new granite countertop in the kitchen or installing a shower system to transform the bathroom into a spa.

There are plenty of other techniques you can use to attract guests to your property and increase your positive rankings. Even something as small as investing in higher-quality linens or automated lights and windows can transform a guest's weekend or midweek stay from ordinary to extraordinary.

Below are some more of our favorite strategies for getting the most out of your VRBO or Airbnb beach house.

Use Seasonal Pricing

Follow the example of hotels by changing your room or rental house prices to match fluctuating supply and demand. You can perform your own research or use proprietary vacation rental software to track local and seasonal events and attractions (such as the annual Juneteenth Celebration, the Galveston's Own Farmers Market, and concerts and shows at the Grand 1894 Opera House), which will affect tourist traffic.

As you grow familiar with tracking this data and adjusting your pricing, you'll become more skilled at hitting the "Goldilocks Zone" of pricing neither too high (which can turn away potential guests) nor too low (which can eat away at your profit margins).

Marketing Is a Must

Every business succeeds largely on the basis of its reputation, and that holds just as true for an Airbnb or VRBO side hustle. In other words, you need to get the word out about your listing through expert marketing.

It's not enough just to create a straightforward listing or a series of compelling posts on social media, however. If you really want to optimize your rental income, you need to take advantage of all the marketing tricks available in the industry.

Even something as simple as hiring a professional photographer to take clear, high-quality pictures of your beach house can make a world of difference in attracting interest in your short-term rental. That also involves staging, furnishing, and anything else to further increase the visual appeal of the listing.

In addition, when writing your listing on VRBO or Airbnb, you need to use search engine optimization (SEO) tactics, such as employing targeted keywords and writing a short yet descriptive title. This will help your unique listing rank higher on the respective STR platform and appear higher on search engine rankings with Google, Bing, and other web crawlers.

Automate Wherever You Can

Automation emphasizes the "passive" aspect of Airbnb and VRBO as a form of passive income. To optimize your earnings on a Galveston Beach condo or house, you need to outsource as much of the process as you can manage. Automation is an easy way to improve the guest experience and boost your return on investment.

For example, installing a smart lock for your short-term rental property will allow contactless entry for your guests, streamlining the check-in and check-out process. You can also provide guests with automated entertainment systems, smart thermostats, and other smart home technology features to make the experience smoother for guests and more hands-off for you.

Incentivize Longer Stays

While many vacation rental homeowners view short, one- or two-night stays (such as business conferences and weekend excursions) as their bread and butter, you can potentially generate more rental revenue with your VRBO or Airbnb property through longer stays.

Just consider how much work you have to put into cleaning and prepping your STR property between each individual booking. While four single-night bookings in a single week are great for your occupancy rate, it also means four different prep sessions spent cleaning up after guests, stocking up on pantry essentials and other amenities, and more.

Consider how much time and effort you could save if you’d have had a single four-day booking during that given week instead!

The bottom line is that encouraging guests to book your Galveston property for a longer amount of time can actually increase your profit at the end of the year. By charging slightly less per night for longer stays, you can build a consistent revenue stream through long-timers and save yourself cleaning and prep team.

You can also pair this optimization strategy with our earlier tip about seasonal pricing. One of Galveston's most well-known events is its annual Holiday in the Gardens tradition, which runs for a limited time through the winter season. You can make extra money by offering discounts for guests who stay for a longer period of time (such as a week or more) during the holiday season.

Contact Us Today!

Ready to take the plunge and start earning more with a Galveston-area Airbnb or VRBO vacation home? Contact the vacation rental property management team at Vello to find out how much our property managers and marketing experts can do for you!

If you have any questions feel free to ask

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