What is Vacation Rental Management?

What is Vacation Rental Management?

Vacation rental management can be overwhelming if you're inexperienced. It may seem easy money to the outsider, but it does take a considerable amount of time and energy to manage a vacation rental. it's certainly new and exciting territory for most people. And for the most part, they are absolutely right! A properly managed vacation rental can be highly lucrative and rewarding.

Are you Interested in Vacation Rental Management?

There are many meanings attached to the concept of vacation rental management depending on who you ask: financial freedom, a career path, a nest egg, a sense of security, or just a little help at the end of the month. Whatever your motivation is, there is a path you can follow confidently in order to meet your objectives.

In some cases, a single homeowner will rent out a single room in order to help cover the mortgage payment. Alternatively, you may own multiple properties in different locations where you would like to start generating revenue.

Make sure you're fully prepared in order to avoid the common pitfalls that have dissuaded many others. To start listing your property and taking bookings, you need to take some important steps. This guide will show you how.

What is a Vacation Rental?

A vacation rental is a property that guests can rent for a short period of time. These accommodations can range from high-end boutique properties to extra bedrooms, serviced apartments, private homes, beach houses, condos, villas, and boats, as well as tents and yurts.

Typically, short-term rentals are residential properties that are rented for no more than 30 consecutive nights. Depending on the state and jurisdiction where the rental is located, the maximum length may differ.

Would Vacation Rental Management be a Good Fit for you?

Being prepared from the outset pays off when it comes to short-term rentals because there are different risks involved. Ask yourself the following questions before you embark on this route

  • Do you generally enjoy hosting guests?
  • Do you have the time?
  • Would you consider yourself an exceptional service provider?
  • Is your rental close to your home? Do you live on the premises?
  • Would your property be a good choice for a vacation?
  • Is your property suitable for a vacation rental? This means - Furnished, clean, and well-maintained, the property needs to be well taken care of at all times.
  • Are you prepared to take a hit if there are high vacancy rates?

In order to run a successful vacation rental, you should also consider the following steps once you have decided on the type of property and investment style you want to use.

Top 7 Tips to Starting your Vacation Rental

Top 7 Tips to Starting your Vacation Rental

1. Understand your Market

1.1 Location

If you are using your current property to-let as a vacation rental you can skip this step.

Several factors need to be considered before launching your rental, including:

  • Optimal Location - Is your current city the best place to launch? Are you going to another state? Do you want to manage an STR entirely out of the country?
  • What type of vacation rental properties are people looking for in that area?
  • Do you need to be aware of any vacation rental rules, regulations, or HOA rules?

1.2 Research

In order to achieve the best results, you should conduct research in the location of your choice. There is no denying, that this can be a tedious process. But you will reap rewards! A few ways to get around this are to search online, Join Facebook forums, and Linkedin forums, as well as Research tools such as Transparent, AirDNA, or AllTheRooms

1.3 Run the Numbers & Calculate ROI

A business plan and a financial analysis should be among the top of your list of to-do tasks. It is important to anticipate the needs of your customers and the well-being of your rental at all times. Here are a few starters

  • Repairs, construction, and installation costs.
  • Consider maintenance pricing which includes Cleaner management, Handymen, Gardners, etc.
  • Costs of utility services - Water, Electricity, Gas, etc.
  • Furnishing costs - Furniture, Linen, Accessories, etc.
  • Service Charges - TV, Cable, etc
  • Taxes and Property payouts
  • You must also assess how well you can manage operations in person, or if you will be hiring a co-host or property manager - the latter will need to be taken into consideration.

Add up all of your expenses and subtract them from your projected revenue. With this information in hand, you'll be able to see how much profit you're likely to make. Starting a new business will incur an initial cost, then there are monthly recurring costs, and as a rule of thumb, set up an emergency fund.

Pro Tip:

Using software, you can consolidate all of these bills and bookkeeping. Accounting software solutions like Ximplifi, Booking Trust, and Quick Books are available for managing bills and keeping track of income and expenditures.

2. Enhance the Value of your Vacation Rental

Enhance the Value of your Vacation Rental

The vacation rental business is intensely competitive. You can enhance your property's appeal in several ways:

  1. Visuals - Your property's online appearance is heavily influenced by your photographs. Photos speak volumes to potential guests. You can use your cellphone or hire a professional photographer to take stand-out photos of your property. Your customers usually decide to book a stay based on the photos they see online, so it's worth the expense.

  2. Equipment and Space - These are facilities you offer on-site. Providing your guests with the best service possible is one way to satisfy them. Some good examples of facilities are swimming pools, private parking, workstations, wheelchair access, private access, gyms, gardens, pet-friendly accommodations, etc. It may seem a bit steep and expensive but it's well worth the effort. In most cases, it will increase the resale value of your property.

  3. Amenities - This is one game changer you can use to your advantage. To beat the competition, compare similar rental properties in your area. Offer more than they do - if they offer shampoo and conditioner, consider facewash, bath bombs, body lotion, and scented candles. Include mouthwash and dental floss if they offer toothpaste/toothbrushes.

  4. Furnishings - Styling your rental with the right decor can make all the difference. As a general rule, aim for light and spacious interiors. If you were staying there for the duration of your vacation, make a list of every item you would want to have available to you. Find some inspiration for home décor by looking around online on Google search websites such as Houzz, Design to Inspire, or Pinterest are great places to start.

  5. Attractions - Find out if there are any tourist attractions in your neighborhood. Probably within a mile of your property, there are museums or art galleries, a walking path, or a hiking trail. Such things are valued by tourists. Make sure you get a nice variety of tourist attractions and conveniences in your area and list them out. Adding this list to your house manual and keeping a few brochures on hand can be helpful.

3. Pick Your OTA

You will generate most of your revenue from your listing channels. It's fine to take direct bookings, but most of your potential clients already use popular booking sites like these:

Pick Your OTA Channels

If your property is located in a specific area and most of your ideal guests reside there, you may be able to find niche channels that target specific segments of travelers and geographic locations.

When listing your property on any channel, keep these tips in mind:

4. Guest Satisfaction

Once you have listed your rental online, you are ready to welcome your first guests. The first guests are the ones who write your first online reviews, so it's important to make their stay as enjoyable as possible. You can use countless integrations, companies, apps, and tools to make sure that you get glowing reviews and ensure your success.

__Few Tips : __

Putting the guest first will lead to a successful vacation rental property. Take a look at Hosting Hacks to simplify the hosting process

5. Read your Reviews and Reflect

Both the pros and cons of your guests' experiences are captured in your guest reviews. It is important to read and analyze every review carefully so you can fix any issues and point out any highlights that will improve future guest experiences.

6. Secure and Insure Your Rental

At the beginning of your career as a vacation rental property manager, you must ensure the safety of your guests, your property, and your finances. By taking the right security measures and purchasing comprehensive insurance policies, you can help make sure your vacation rental business is safe and secure for you and your guests.

7. Invest in Vacation Rental Software

Explore the option of investing in property management software.

Hostaway is an All-in-One vacation rental software solution for property managers. With Hostaway, you can manage all of your property listings and channels, send invoices, communicate with guests, and answer inquiries from one place. The software provides tools to automate and simplify marketing, sales, communication, operations, reporting, and accounting.

All of your work is conveniently consolidated. You may be happy to run one property on one listing channel, but if you're like most people and want to increase bookings and scale up your business, it's best to get a rental property management system set up from the beginning.

Takeaways

Vacation rental businesses take a lot of work to run successfully. Your listings must be attractive, ensure guests have an excellent stay, solicit reviews, then clean up and start all over again. The vacation rental business can be challenging, but once you master the technique, you will be on your way to success!

Ready to find out how Hostaway can transform your business?

Hostaway is proud to support thousands of Property Managers and Airbnb Hosts Around the world. We take in pride in being Top Ranked in Vacation Rental Software Review Sites: Capterra, G2, Software Advice, Trust Pilot, to name just a few! Check out our reviews and read the Hostaway Case Studies from real successful and growing Short-Term Renal Managers!