Covid changed the game last year as everyone was staying at home “away from home” or if they were not, they were wanting to. Also, the season was extended through October with good weather and schools starting late or allowing zoom school. So lets throw most of that out…but not all of it. As we all know, working and schooling from home is an option that many businesses/schools are allowing. With this, it allows families to be anywhere. As a result, I expect the future to be somewhere between pre-covid numbers and post-covid numbers.
Pre-covid, I used 50-70 nights as my average usage depending on owner usage. Many homes got more than that but they are the ones the owners dialed in and had something special about them (i.e. pool, water toys, wow factor, etc.) During Covid, many of the homes on our program exceeded 100 nights. I am not sure what post-Covid will look like but I am forecasting somewhere in the middle at 70-90 nights.
As far as rate, my rule of thumb is $100 per night/$100,000 of home value. For instance, $500,000 house will bring around $500/nt during peak season. 2022 Update: this has changed with the new home prices. I would say this needs to be adjusted to $75 per night/$100,000 of value. So a $500k house should bring somewhere around $375/nt…a $1M house will bring around $750 per night.
Multiply the number of nights by the rate and you will get the gross revenue. Our commissions are 25-30% depending on the nightly rate. As an example, $500/night x 90 nights = $45000 gross rentals x 72.5% results in owner revenues of $32,525.
Your other costs are sheets, utilities, increased property taxes and insurance…most of which are taken care of in 1 week. Your effort is minimal after that as we take care of the marketing, guest communications, financials, cleaning, etc.
Sound interesting? Call me if you want to understand the value your lake home can return.
Jeff Thomas, Broker, Smith Lake Rentals and Sales, 205.492.3211 Jeff@SmithLakeRentals.com