Investing in a luxury vacation rental, especially in areas like the Beverly Hills neighborhood, can reap serious rewards for renters. Although properties in the area are famously high-cost, vacationers looking to sample the lifestyle indulge in properties that match the local scene. When deciding if a luxury vacation rental is an investment for you, consider the information below.
Beverly Hills rental market
Currently, 57% of the homes in Beverly Hills are renter-occupied. Investors interested in a rental property can count on a large renter population to support their endeavors. Alongside a high renter population, rental rates have increased by 12% compared to last year. Rental rates themselves are high, with a single-room apartment averaging $2,679. This rate can be adjusted for a property’s size, location, and amenities.
Simply purchasing Beverly Hills real estate is a wise investment. Compared to the rest of the United States, Beverly Hills ranks in the top 20% for real estate appreciation. In the past year, properties have appreciated by 12.82%. As home values rise, landlords can raise vacation rental prices accordingly. This ensures a continued, increasing cash flow.
High cost, high reward
It is true that Beverly Hills properties come at a steep price. The current single-family home median price is $7.07 million, which is a 10.8% increase compared to last year. However, other market trends are geared toward investors’ favor. For one, home sales have decreased by 20% in the past year. This means that there’s less competition in the market. Additionally, active listings have increased by 14.4%. This creates more options for investors searching for luxury rental properties.
High costs often pay off in high rewards. Investors can take advantage of high and low seasons with fluctuating rates. They can also use technology that adjusts rental prices many times per day, ensuring the best rate. Investors should do their own research as well. Estimate how much it takes to upkeep your luxury rental property. Also, research the rates of comparable rentals nearby. With this information, set a sustainable and profitable rental rate.
A major perk of luxury rental properties in the Beverly Hills neighborhood is the location. Make location perks clear to vacationers by including area amenities in your online listing. It’s also helpful to prepare a local guide of restaurants, shops, and entertainment for vacationers to use. Vacationers likely won’t be familiar with the area, so it’s an investor’s job to showcase what makes their property worth booking.
Beverly Hills has plenty for vacationers to explore in its 5.7 square miles. World-class shopping along Rodeo Drive provides luxury fashion and entertainment. High-end dining at The Beverly Hills Hotel’s Polo Lounge is another spot that entices vacationers. Visitors can relax at one of the many luxury spas. These include Tomoko Spa, La Prairie Spa at Waldorf Astoria Beverly Hills, and Thibiant Beverly Hills. Other attractions include Beverly Gardens Park, the Beverly Hills Farmers’ Market, and fantastic happy hours at local spots like Héritage Fine Wines.
The luxury rental process itself comes with a few benefits to boost cash flow. For one, Beverly Hills real estate that’s rented out for at least 14 days of the year can file for tax reductions. Investors can also check if they meet other requirements set by the IRS to receive tax benefits. Search for additional benefits you could apply for on the state and local levels too.
Vacation rentals, in particular, benefit from deductions. Costs related to luxury bedding, high-tech utilities, homeowner’s insurance, and even legal fees can be deducted. This takes a significant burden off luxury renters financing a five-star experience for vacationers. Investors with vacation property can also use the property themselves. This saves extra costs related to hotels and cleaning fees.
Tips for a profitable luxury vacation rental
A luxury vacation rental is an experience that investors should curate intentionally. Make sure renters can find your property by marketing accordingly. Then, consider hiring a management company to maintain high standards. Follow the tips below to create a profitable luxury vacation rental.
Renters can market their home themselves via online listing sites like Vrbo, Airbnb, and other specialty sites. This ensures your rental is visible to vacationers. Make your listing high quality by taking professional photos of your property. A high-quality photo catches the eye of vacationers. It also shows them you’re serious about renting out your property.
Simply creating a home listing isn’t enough to attract vacationer interest. By working with a real estate agent, renters can receive help marketing their listings. This may be through ads on social media like Facebook, Instagram, or YouTube. SEO, or search engine optimization, is another strong tool that increases the chance of vacationers finding your home online.
Always make improvements
To keep your vacation rental relevant, always look for where you can improve your property. Pay attention to reviews to understand what is and isn’t working, then adjust accordingly. For a luxury rental to be luxury, it should provide amenities that regular rentals don’t. This may include additions like a stocked fridge and pantry, smart home technology, and recreation spaces.
To keep your property running smoothly, consider hiring a vacation property manager. A management company can assist investors in several tasks depending on the services you hire. These may include being available to guests around the clock, marketing assistance, and financial or accountancy work. This helps renters maintain a highly rated, profitable property.
Ready to invest in luxury rental?
Luxury rental properties in Beverly Hills are a great choice for investors. Real estate market trends make it a good time to buy. The amenities of the city also generate a strong vacationer population. Start your investment correctly by working with a local agent. They’ll know the area’s trends and have access to the most properties available. When you’re ready to start a search in Beverly Hills, contact LA Luxuries to guide you through the process.