A lot of people dream about owning their own vacation rental business which not only provides them with a great place to stay but also earns them some extra money. Post-pandemic, more people than ever are making trips away and they are looking now at a variety of options. Long gone are the days when you would just book a hotel room for your stay away.
In current times, there are options such as short-term rentals which are a popular form of accommodation for a trip away. From being incredibly spacious to offering an affordable way to stay away from home for longer periods, it’s no wonder they are growing in popularity with guests booking these instead of hotel rooms.
Therefore, with this in mind, it’s not surprising that more people than ever are considering buying a vacation rental.
There are a lot of benefits to these types of properties. But a lot of people don’t know where to get started with a vacation rental business. After all, it’s not as simple as just opening a business; there is a lot to know about the vacation rental industry and the operations involved. Therefore, here is how to start a vacation rental business.
What is a vacation rental business?
Before we talk about how to start a vacation rental business, we need to explain exactly what is meant by this expression. After all, a lot of people aren’t completely sure what a vacation rental business involves.
A vacation rental is a property an individual or a business owns that is rented out on a short-term basis. This could be for a couple of nights or could be for over a month. These are likely to be rented out to travellers who are looking at staying at these types of rentals instead of hotels.
They are not just limited to one type of accommodation with these properties being anything from villas, cottages and apartments. They range from basic accommodation to the most luxurious options and can be based anywhere in the world.
A vacation rental business is where you own one of these and rend it out to travellers across the world. It has gained popularity as a business, especially post-pandemic with a lot of people opting for this type of accommodation.
You can rent out the vacation rental property on an independent basis such as on your own website, on social media and even in the local area. Or a lot of people are now using short-term rental platforms. With these platforms available, it’s made the vacation rental business a more appealing option to individuals.
Is vacation rentals profitable and a worthy investment?
A lot of people don’t know whether to go down the real estate route or opt for a vacation rental business. A vacation rental business is a good decision because they are highly popular in current times.
A lot of people want to rent a property for a short-term and are looking for a rental which offers them a whole range of benefits. They have a lot more space with their own kitchen and living area. They can also rent it for longer periods which is a popular choice with those travelling for business and work.
Looking at the demand, competition and rate, the vacation rental industry is booming and is much more likely to earn you a higher profit than a real estate rental. Therefore, they are currently highly profitable making them a worthy investment.
How to start the business
Here are a few things you need to do if you are going to start a vacation rental business:
Find a property
The first thing you need to do is find the right property. You want the perfect place for your vacation rental business. Here are some factors to consider when looking for the property:
You need to decide on a location, to begin with, to start your search. Research different areas, looking at potential places that are appealing in terms of visitors. You might want to go for a property in the heart of the city or look for one that is right near the seafront. You can then look online to see how much people are paying for vacation rentals in the area so that you make the right decision.
Also, deciding how much you want to pay is very important, taking into account any fees you may need to pay on top. Work this out so that you can find affordable accommodation which is within your budget. Remember to leave some money aside for any changes you will need to make. After all, you want to make the home perfect for guests.
You should also look at whether there are any specific places of interest nearby that you can use when describing your property. After all, you can draw guests in if you are located near a stadium or a popular museum.
You also need to do some analysis of properties to ensure your investment is worth it in the long run. Doing some research will ensure you know exactly what you need to be looking for and the kind of money you could make from different types of properties. That way, you can go into the decision after conducting research.
Time to make it look beautiful
The next thing you need to do is make sure that the home is ready for you to launch to potential guests. After all, you want to encourage them to stay and ensuring it’s furnished to the highest quality is so important. That way, they will want to return and will also share it with their friends and family who then might book and stay at the property.
You also want it to look great when you add photos of the accommodation on the websites when you start to rent it out. Here are a few things to consider when furnishing your property:
First things first, make sure that the lighting works well. This will help to bring the room to life and can make it look more appealing in photos. This is particularly important in the kitchen, living room and bedroom as the lighting can set the tone of the room.
It’s so important you make a wise decision with the furniture. Not only should it look beautiful to entice guests but it also needs to be practical. You want furniture which is long-lasting and durable so that it withstands the number of guests that will be staying in your vacation rental property. You don’t want to have to keep replacing the furniture.
The decor is so important when giving the vacation property an uplift before guests arrive. While bright and bold wallpaper is eye-catching, it’s always good to go neutral. You can always add some brightly coloured accessories to the rooms to make them more quirky and colourful. For instance, art works well to give the rooms some personality. But neutral is great to ensure the place looks modern and tasteful, perfect for the variety of guests staying.
Decide on how to run the business
Before you get started with your vacation rental business, you need to decide on how you might run the business. It might be the case you want to do everything yourself if you have enough spare time. After all, this will save you a lot of money if you do the cleaning and booking of the vacation rental yourself.
But while it can be cost-effective, it can be a lot of extra effort, especially if this business is around your position in another career. It’s time-consuming to sort all the arrangements and ensure Also, you want to impress with the property and if you do everything by yourself, it might not be up to the standard the guests will expect. Here are a few things you should sort out when looking at how to start a vacation rental business.
As we discussed before, it is very time-consuming to take on all the cleaning of your vacation rental. You need to make it to a perfect condition and might have a short time-scale in-between guests leaving and new ones arriving. Also, if you pass on this job to a friend or family member, it’s a lot of stress and pressure on them to complete the cleaning. Therefore, it’s important to sort out a professional cleaning service to go to your property.
That way, the condition of the property will be at the highest quality level to ensure the highest satisfaction from guests. You can research online the best cleaning companies and ensure you check out all the reviews before you book with one cleaning company.
You want a reputable company that you can rely on to come to your property and clean the whole place from top to bottom. You might not live near the cleaning company, so you need a reliable company that you can contact easily. They can also inform you if any issues need taking care of before the next guests arrive.
It’s important that you conduct regular cleaning and also ensure towels and bed linens are replaced after each visit. That way, you can ensure high reviews and repeat bookings from loyal guests who will want to return to your clean accommodation.
If you are hiring a professional cleaner, you can add a cleaning fee on sites like Airbnb. That way, your overall profit will not be spent on the services you require.
It’s tough to keep on top of bookings for your vacation rental business. You want to be able to easily keep on top of your property, when it is booked and which dates you have left. This is time-consuming and stressful if you are sorting everything as a vacation rental business owner.
It’s not only booking which you might require additional help with as the marketing and revenue management is also both stressful and hard to navigate. If your business is a success and you start investing in other properties, you will need a seamless way to market, distribute and book your properties. And you will need to use multiple platforms to do so.
Therefore, with this in mind, you should consider looking at property management software such as Hospiria. With our software, you can manage your operations all in one place. That way, you don’t have to use multiple systems which can make your vacation rental business more complex and stressful. This software allows you to view all the properties you have and see all the bookings currently in place.
You can see multiple programs on the system such as Booking.com and Airbnb so that you don’t end up taking bookings from both sites for the same week. Additionally, you can use this type of system to help market your company. You can set up marketing and distribution so that you know exactly where your property is being viewed and this can lead to extra sales.
The system ensures you have more guests staying at your property and a higher profit too. You can stay in control of your new business while having additional help in place to run your operations effectively. After all, if you are new to this industry, this is a great step to take to ensure the success of your vacation rental business. There is a range of packages so that you can decide on what will work for your business.
Where to list your vacation rental business?
The next important step is to choose where you will launch your property. After all, there are multiple websites out there where you can put your property on display. Or you might want to do all the marketing yourself for the new property. Here are some great places to list and share your own vacation rental business.
A rental platform
With millions of listings on sites like Airbnb, the short-term rental industry is ever-growing. There are now many platforms out there where you can list your property. There are now many benefits to using these type of platforms. For starters, you have added protection from these platforms just in case you have any issues with guests.
They will ensure you get the money paid and will deal with any problems that arise. Also, they have such a high amount of visitors that your vacation rental will be viewed by millions of people. Therefore, you will get the opportunity to have bookings with brand-new connections.
You will also get to showcase your property with a great listing that will help to boost your bookings. You can also be competitive with prices as you will see what other vacation rentals around the same price are being rented out for.
Using these platforms comes at a price and you will have to pay a fee to the platforms. But to make the new connections and ensure your business is a great success, it’s often worth it to use these platforms.
Social media is one of the greatest forms of free advertising for your property. By using sites such as Facebook or Instagram, you can advertise your vacation rental and increase the number of guests staying on your property. You will find that guests can give reviews of your property to help build your reputation and can also share the property with others if they like your property.
This is a cost-effective way to market your vacation rentals and it’s ideal for updating potential new guests with reels and pictures of your rental property. You can also create a website and can share this on your social media pages.
That way, they have a greater insight into your property and can find out information about pricing which you might not want to share on social media. If you launch a website, you need to take this cost into account.
Create a listing
Now you know where you want to place your property, it’s time to create a great listing or advert for your vacation rentals.
Once you have bought the vacation rental property and furnished it to the highest level, giving the vacation rental a new look, you can start taking photographs of your home.
Ensure the property is to the highest level possible and get a professional photographer to take the photos of your home. You want to give them the best overlook of the property as possible so that they know what to expect.
Write a great description
As well as selling the property through great photographs, you need to sell it through words too which describe the property in great detail. While the pictures will be the main way to capture the interest in the property, do give them an accurate description which will inform them of the important details as well as highlight some of the main features as well as any attractions nearby.
Set the rate for the property
You then need to decide how much you will market the property. You need to do some research into the rental income of similar properties and work out a competitive rate. It’s important to work out the key dates too so that you can increase the price at prime times such as holidays and big events across the world to make more rental income.
|Distribution via 40+ platforms including major, affiliate, select access* and niche platforms|
|Single property page - Manage all your listings from within the platform|
|Booking management - Fully synced Bookings list|
|Single & Multi-calendars - flexibly update your availability and see your properties all in one place|
|Performance reporting in one dashboard - see your key metrics by Company or Apartment|
|Dynamic pricing - Managed in-platform and powered by Pricelabs, to increase revenue through rate optimisation.|
|Enquiry management - Track, action and convert direct bookings in one place|
|Smart Availability Search - Match enquiries with available properties through smarter searches.|
|Automated customer communications - Customisable email templates for all your communication needs|
|Automated Scheduler - Aut-schedule your field activity inc. check ins, cleaning and maintenance|
|Deep third-party integrations - Connect your automated schedule to Breezeway, Keynest and more|
|Customisable pre-check in process - Check-in and out times, special welcome packages & upgrades|
|Deposit management - Track, amend and action deposits from Hospiria|
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