Starting a vacation rental business can be an exciting prospect. Lucy W., a VRBO.com owner, told us, “Before I started renting out my vacation home, I was worried that it would be a hassle and that I wouldn’t attract the quality of renters I wanted. Five years later and my vacation home practically pays for itself. And it’s been a real joy to be able to share the place I love so much with guests who return year after year.”
Every vacation property is unique and special. No matter what kind of vacation home you own - single family home, condo, cabin, cottage, chalet, villa, apartment, estate, lodge, townhome, studio, castle, farmhouse, bungalow, or boat - and no matter what its peak rental season is, our quick reference guide will help you understand the ins and outs of starting a vacation rental business.
The first step in starting a vacation rental business is putting together a business plan and – if you don’t already own one -- purchasing a vacation property.
When buying a vacation rental property it's vital that you ask yourself a few key questions:
- How's the vacation home market in my area?
- What can I afford and still cash flow?
- What kind of mortgage should I get?
- Should I buy a house or a condo?
- Who are my target renters?
Once have your home purchase planned, it's time to figure out some details of how would like to run your business:
- Am I going to use a property manager or rent by owner?
- If I'm renting by owner, what type of housekeeper am I going to use?
- How much should I charge per night, week, month?
- Am I going to charge by night or by person?
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- Which fees am I going to charge (cleaning, etc.)?
- Which types of payment will I accept (online payments via ReservationManager, PayPal, check)?
- How am I going to handle keys?
- Am I going to accept pets?
- What is my refund policy going to be?
- How am I going to furnish my property?
- Which types of beds will best suit my property and my renters?
- Which/how many websites should I list on?
- Which photos will best show off my vacation home?
- Should I hire a professional photographer?
- What are my property's top selling points?
These are just a few of the questions you should ask yourself when starting a vacation rental business. The key to entering into any endeavor and being successful is knowledge and preparation.