People are now traveling and having vacations again after the COVID-19 has subsided. However, many people are now choosing alternative methods of travel, such as vacation rentals, to avoid large crowds and possible exposure to the virus.
The vacation rental business is anticipated to rebound this year as our nation begins to recover from COVID-19. According to Statista, the overall income of the vacation rental industry in the United States is anticipated to rise at a compound annual growth rate (CAGR 2022-2026) of 6.30 percent over this decade, with a predicted market volume of US$105.70 billion by 2026. And with the proper marketing and management, owning a vacation rental property can be a very lucrative business.
So, how do you get started in this business? Below are key steps you need to take:
Do your research
You’ll need to find a property that will meet the needs of your target market. Think about what type of property would appeal to your target market and what location would be most convenient for them.
You’ll also need to research the vacation rental market in the area where you’re considering buying a property. Check out sites like Airbnb and VRBO to see what type of rental properties are available and how much they’re going for. This will give you a good idea of what you can expect to make in terms of rental income.
Some of the popular rental properties today are:
- Vacation rental properties: This property is rented out for a short-term vacation. It can be anything from a condo to a villa.
- Corporate housing: This is a rental property leased to businesses for employees traveling for work.
- Serviced apartments: This apartment comes with hotel-like services, such as housekeeping, laundry, and concierge.
Create a business plan
This will help you map out your goals and objectives for your vacation rental business. It will also give you a clear idea of the costs associated with starting and running your business. Some of the things you’ll need to consider in your business plan are:
- The type of property you’ll need to purchase
- The location of your property
- The amount of money you’ll need to get started
- Your target market
- Your marketing and advertising strategy
Find a property
The best way to find a property is to work with a real estate agent specializing in vacation rentals. They’ll know the area well and can help you find a property that meets your needs. Finding a home is like entering a battle zone; you must compete for the finest property and defend it if it truly fits your needs.
When you’re looking at properties, keep in mind the following:
- The property’s location: Choosing a convenient location for your target market is important.
- The size of the property: The size will determine how many guests you can accommodate.
- The type of property: Choose a property that will appeal to your target market.
- Your budget: Make sure you have the finances to purchase the property.
Let’s say you’ve decided on a property, and your budget won’t allow the purchase. If this is the case, you could consider applying for one of the jumbo loans. The primary benefit of a jumbo loan is that it enables borrowers to purchase a home they would not be able to afford if they took out conventional loans. This allows individuals to acquire larger houses than they would otherwise be able to afford or purchase in a highly competitive market.
Get the right team of professionals
Your team of professionals is the key to your success. You’ll need to find a property management company, a cleaning service, a property manager, an accountant, and a lawyer experienced in vacation rentals. They’ll be able to advise you on the best way to get started and help you avoid any pitfalls.
By working with a professional team, you’ll be able to focus on running your business and leave the day-to-day operations to them like:
- Maintaining and cleaning the vacation rental property.
- Handling guest inquiries and ensuring they have a positive experience.
- Stocking supplies and preparing the property for guests.
- Make sure the property is in compliance with local regulations.
Marketing your vacation rental house
Failing to market your vacation rental property is one of the biggest mistakes you can make. You need to let potential guests know about your property and what sets it apart from other vacation rentals in the area. This will help get your property in front of a larger audience.
Some of the things you can do to market your property are:
- Create a website: A website is a great way to showcase your vacation rental property and provide information about rates, availability, and amenities.
- Vacation rental listing sites and social media platforms: List your property on these sites and platforms—Airbnb, HomeAway, VRBO, FlipKey, TripAdvisor, Facebook, Instagram, and Twitter.
Final thoughts
Are you ready to get started in the vacation rental business? It’s a great time to be involved in this industry, and following these steps will give you a head start. With a bit of luck and a lot of hard work, you can build a successful vacation rental business that provides you with both income and flexibility.
