Many factors go into making a property a successful rental venture. These tips ensure a smooth start.
You’ve acquired your dream home in the Caribbean and are ready to enjoy a mid-winter escape to blue skies, sunshine and warm, crystal clear seas. Like many homeowners, you plan to spend a number of weeks with family and friends at the property and return to your temperate home for the rest of the year. The question then arises: what do you do with your beautiful island property while you are away? Renting to vacationers can be an excellent option. While it is unlikely that a short-term rental operation will make you wealthy, but if well-managed it could certainly cover your operating costs.
Vacationers will happily pay for the opportunity to experience your home in the sun, so pay special attention to the following items as you get a rental up and running.
License to Rent & Trade Licence
As the owner of a villa that will operate as a short-term rental, you need to be established and set up to do so. The process is two-fold. First, get approval from the BVI Government to rent the property, including an application your lawyers will submit and manage on your behalf that will run concurrently with your application for a Non-Belongers Land Holders License (NBLHL) to purchase. Once you have this permission you will then need to apply for a Trade Licence which enables you to register with all the relevant government agencies so that you can hire staff, take bookings and get set up to pay the associated government fees relating to short-term rental revenue.
Along with a policy that covers your house and its contents, be sure to purchase liability insurance that covers guests and staff. Some rental agencies also require that they are indemnified on your policy. To be sure that your property is adequately insured, have an appraisal of your property conducted by a licensed surveyor and insure at the appraised value. Several reputable insurance companies are operating in the BVI who can provide further advice on the policies and insurance coverage you may require as part of your rental operation.
With your Trade Licence, you can now obtain a Taxpayer Number, allowing you to pay various governmental fees. Hotel Accommodation Tax, calculated at 10% of rental proceeds, is paid monthly. Once you’ve hired staff, you must make monthly contributions to Social Security and National Health Insurance on their behalf. A payroll tax is also levied monthly.
Property and Rental Management
It is best to engage the services of a reputable rental management company. The best companies will customize their services to your unique needs, creating bespoke marketing strategies via websites, magazines and social media platforms. Other rental management services include maintaining a master calendar, fielding inquiries from potential guests, partnering with agents and wholesalers, arranging trips for travel agents and promoters, issuing contracts and invoices, collecting payments, concierge services, meeting guests, and managing villa staff and the multitude of providers that contribute to a full vacation experience for your guests.
Rental Property Preparation
The task of preparing your house for a vacation rental may seem daunting and expensive. You’ll want good quality linens, kitchen equipment, updated appliances, pool and beach toys, internet, satellite television, and the list goes on. The solution: keep it simple and keep a spare. Remembering that it is not always economical to purchase appliances in the islands, it’s a good idea to keep spares of everything. Empty your home of personal items so you do not run the risk of damage to precious belongings. An absolute must-have: an owner’s closet. You will be able to secure your personal belongings, ensuring that you have them for your next vacation.
Rental Policies and Rates
An experienced agent will guide you through establishing rental policies for your villa. These include rates, damage deposit, cancellation policy, liability waiver, housekeeping and laundry services and fees, provisioning and other amenities. It is of utmost importance that rental rates are established correctly based on the villa rental market. A study of comparable villa rental rates will provide guidance. In the islands, there are two seasons, and each has different rates. The more expensive (and busy) “high season” starts with the Christmas and New Year holidays and runs to the end of the Easter week. The alternate “low season” starts the week after Easter and runs to the start of Christmas week. Most owners also charge a premium for their villa over the peak Christmas and New Year period.
Other considerations such as partnering with wholesalers, using international rental agents, hiring staff and other local providers also determine the success of your vacation rental villa. These service providers are key in attracting guests and creating a repeat clientele.
It will take some time for a villa to become well-known but with excellent management, efficient providers and the right amenities, you will soon build up a clientele of happy repeat guests. The goal is to have a successful vacation rental villa that gives you the freedom to enjoy your tropical vacation home without the expense of keeping one.