How COVID-19 Shifted Vacation Rental Investments in Ocean City, MD?
Vacation rentals in Ocean City MD saw a surge in rental income, but the market shifted creating opportunities for investors who offer quality properties.
The rental market had many questionable turns in 2020 – and many for the better. After the March 2020 shutdown, bookings flat-lined, there was panic over the summer rental season, and experienced rental managers evaluated data predicting the future of the vacation rental business.
In this article, I’ll share how COVID shifted vacation rentals thus creating real estate investing opportunities.
Vacation Rentals in Ocean City, MD surged with opportunities for investors
You may think COVID-19 reduced income potential, but it was the opposite for those that harnessed the concerns of the public and embraced a clean, safe space for vacationers.
Focusing on making your rental property a value to guests amidstCOVID-19 surged income potential for quality vacation rental properties.
Guests left hotels, resorts, and large areas to find separation from crowds
Many vacationers shifted their stays from larger crowed condominiums, hotels, and other congested areas for properties away from people.
Guests redirected their vacations to a property they could enjoy outdoor space, still visit the beach, and spend time with family where they felt more control over their exposure to the public.
Many booked places they could feel comfortable parking their car and entering their vacation rental with minimal exposure to others. Walking from your car to a lobby with an elevator and passing guests from parking your car to the point of entering your condo concerned some guests.
There was a great need for townhouses and private single-family home due to comforts of being away from others. Families joined together to rent a large vacation rental instead of renting separate places.
This made larger properties like 3-bedroom, 4-bedroom and 5-bedroom properties more attractive. In return, more profitable for owners. This created an opportunity for more aggressive pricing for quality vacation rental properties.
Guests paid more for a vacation rental that presented a safer experience
Quality places have always stood out from the competition. However, the safety benefit of a well-maintained property stood out even more with COVID concerns.
Quality creates an opportunity for higher nightly rate premiums, and in many cases, the possibility for double or triple the rate compared to similar properties that don’t offering a quality presentation.
Guest reviews are definitely an asset to any property, but many vacation rental properties lack quality, and affected guest standards and higher rates.
The are misconceptions about guests destroying rentals and owners not needing to put nicer updates in them. This isn’t always necessarily the case. Guests appreciate a nice place and many want to stay in a place nicer than their home. Putting in the extra effort to present a clean and updated rental appeals to many guests concerned about COVID-19 and cleanliness.
A well-staged property shows a guest that you took care in making your vacation rental property a valuable experience, just like a hotel presentation. Old furniture, poor conditions, and mix-match finishes make it look like you’re just looking to make a quick buck, and not running a successful hospitality business.
Reduced restaurant occupancy created more of a need for a well-equipped kitchen
With restaurants at reduced capacity, and carry-out more common, a well-equipped kitchen was valuable to guests. Renovated kitchens that focused on allowing guests to socialize with their family in a safe place was attractive for guests.
In our rental portfolio, well-staged and presented kitchens had the most views online and aided to better written reviews. A kitchen is a great resource for guests to save money on going out to eat as often, and in return, creating a value to you for higher nightly rates.
Last minute bookings were more frequent - And more profitable
In any season, last minute bookings will generate higher nightly rates. You’d be surprised how many guests wait until last minute to book a vacation, and this creates an opportunity for higher nightly rates. This doesn’t mean you save your entire season for last minute bookings, but a percent of dates should be left open for the last-minute gateways.
COVID put a cloud of uncertainty for the 2020 vacation rental season.
When the shutdown first happened in March, bookings flat-lined. No one really knew when the government was going to loosen the rental restrictions. In fact, it was days before May 22nd, that the Town of Ocean City officially gave us the news, that rentals were allowed again.
At that point, bookings skyrocketed. It was a month-by-month evaluation with similar booking patterns to a standard season with a last-minute booking schedule.
Creating work friendly spaces opened the door to longer short term vacation stays
Some guests took longer vacations, and those that have the ability to work from home looked for rentals that accommodated their work space.
With parents working from home and their kids doing school online, many wanted a beach place for longer stays in the fall and off season too. Their thoughts were, "If we have to stay at home to work, and our kids are home schooled, we're better off enjoying the beach."
The demand for longer term vacation stays started in the spring when States started lockdowns. The need for renting a place at the beach long term became of interest. This is also true for many looking to buy a second home at the beach.
Create a foundation for vacation rental investment opportunities
There’s a lot of data points and strategies to be successful vacation rentals in Ocean City, MD.
Finding the right property or altering your existing property needs to be strategically evaluated based on…
- Various locations
- Nearby activities
- Features offered to your guests
- amenities within a condominium complex, community and your property
- upgrades that make your property stand out
- structuring your online presence and profiles
- creating a booking strategy that’s successful and flexible
Many guest considered the above bullet points when choosing their rental, and it influenced their decision due to concerns dealing with COVID.
Considering investing in vacation rentals in Ocean City, MD?
Download my free guide to start evaluating the costs of vacation rental ownership.
How did COVID-19 affect your vacation rental or vacation?
Share your thoughts.... Leave a comment below!