In 2011, the nine-day South by Southwest (SXSW) festival drew 286,000 visitors to the Austin area, which has a population of just over 790,000. Of the 30,000 hotel rooms in the Austin area, only 6,000 are downtown, where the festival is held. This presents a lucrative opportunity for Austin locals to offer their space to the 300,000 SXSW visitors expected this year. Jon Gray, Vice President of HomeAway North America, says:
With hotels sold out all over the city due to the anticipated record-setting attendance at SXSW, Austin home owners have a great opportunity to take advantage of the potential income from festival goers.
What considerations should you keep in mind when listing your property? To help you navigate the process, I spoke to locals who have experience renting their properties. Here are five keys for successfully renting your home during SXSW.
1) Set Your Rate
It’s quite an understatement to say “prices vary.” An Airbnb search for the first weekend of SXSW reveals a handful of accommodations, at price points ranging from $40 to $10,000 (yes, ten thousand dollars!)
Gray says, “The average estimated daily rental rate for a 2-plus-bedroom vacation home during SXSW is $691, compared to our typical national average, which is approximately $211.”
The first step in determining your rental rate is to compare your accommodations to similar ones listed. Consider location, amenities, privacy, and the dates available. All of these things can boost your nightly rate.
In addition, offering something unusual to your guests can justify a higher rate. One clever homeowner has created a “tent village” in his yard, renting unfurnished tents to guests, while offering an outdoor shower and encouraging fireside music sessions. There’s a “vintage RV,” where the host is offering free or cheap rides in the daytime, and says guests are welcome to their organic garden and farm-fresh eggs. There are private bedrooms in shared houses, some with hosts willing to cook you breakfast. A little creativity and effort can go a long way.
2) Establish Some Rules
Unlike many conventional vacation rentals, people giving up their space during SXSW typically live in that space throughout the rest of the year. To protect your property and give you some peace of mind, you should set rules reflecting expectations of your guests.
Consider things like whether you’re OK with smoking, pets, additional guests, loud (or live) music, and parties. Also consider whether guests will have access to specific belongings of yours, such as your antique record player or your imported spice collection. It’s important to outline specific instructions so guests don’t unknowingly violate the unspoken laws of (your) land.
3) Offer Some Amenities
Providing some low-cost, unusual perks can help you rent your property faster and at a good rate–and build goodwill that might get you more renters next year. For instance, many hosts will leave snacks and beverages for their guests. Some hosts offer bicycles. One local host, Elizabeth, suggests:
“Have a bike available for your guest. People visiting ATX, especially during a high-traffic time like SXSW, want an easy way to get around. In Austin, that's a bike.”
Take it a step farther, and act as a guide. Elizabeth suggests, “Give your guests the kind of information you'd want to have. We leave, for instance, a list of all of the food trucks in Austin out for our guests. It includes their addresses, numbers, hours, and cuisine.”
In the case of renting a room in a shared home, Elizabeth also says, “Included in the price of staying with us is free reign of the kitchen. Our guests can drink anything they find, eat anything they find, and always feel free to take over the kitchen with their own meal preparation. This, I find, is important to guests. They don't want to have to pay to eat out every meal on top of paying for a rental.”
4) Create an Effective Ad
With a little creativity, your listing will likely have more views and will rent faster. Enough cannot be said for the value of good photos. A HomeAway traveler study shows that 63.8 percent of potential renters cite a property’s photos as the most important element in their booking decision. So, once your place is gussied up, grab your camera (or a photographer) and show off its pearly whites.
Writing an effective ad is the icing on the cake. Why should a potential guest choose your property over others? Be sure to list the aforementioned perks and amenities. Tell your prospective guests just how wonderful your place is, without embellishing–after all, they will be disappointed if misled.
Brag about your view, or your pomegranate and chestnut trees; mention that clawfoot tub that offers endless nights of relaxation. Are you on a bus route? Let ‘em know! Ease of (and inexpensive) navigation is valuable to festival goers. Be thoughtful. Be honest. Be creative. And, by all means, if you’re funny: be funny.
5) Consider the Tax Implications
Keep in mind that Airbnb and similar services will issue a 1099 to hosts, reporting their rental earnings to the IRS. This is taxable income. Fortunately, owners of rental properties can deduct certain expenses associated with renting their property, such as for supplies (food, toilet paper, etc.), professional cleaning, marketing, or big-ticket purchases that enhance your property’s appeal. Elizabeth, for example, is deducting the cost of a third bike, a grill, and a spare bed.
To be safe, consult your tax advisor to find out what impact renting will have on your taxes and what expenses you can deduct.
Have you rented your place in the past for special events, or are you renting your space for SXSW 2012? Do you have suggestions for newcomers to the scene? Please share your stories in the comments section below.
A special thank you to Adam Annen, HomeAway's Public Relations Manager, for always providing immediate and comprehensive data.
Photo courtesy of Michael Mandiberg.