Short-term vacation rentals generate $18,026,000,000 in revenue in the United States alone. While $18 billion is a significant sum, revenue is expected to grow at a 2.5 percent annual rate for the next few years and beyond.
So, as a potential property owner, what does this mean for you? It means you picked the right business to make money in!
While the idea of buying a cute little fixer-upper in a dream location and renting it out to dream vacationers is appealing, what drove you to start this business? It’s most likely the prospect of earning a decent living.
So, what’s the next step after you’ve decided to rent out your vacation home?. to actually carry it out? Is there a way to ensure that you make a healthy profit instead of losing your money? What are the factors that influence renters’ decision to leave positive reviews and return to rent from you again and again?
With our in-depth, go-to guide for starting your own successful vacation rental business, Grand Welcome Franchise answers all of these questions and many more. If you carefully follow the six steps outlined below, you’ll be able to earn the money you desire!
Use the quick links below to jump to any section of the guide:
Step 1: Start a Vacation Rental Company
Step 2: Investing and Making Money
Step 3: Seize the Franchise Opportunity
Step 4: Promote Your Company
Step #5: Provide Exceptional Customer Service
Step #6: Sell Your House and Make Money
Step 1: Start a Vacation Rental Company
Before you rush out and buy a property to fix up and rent out, there is a lot of groundwork that needs to be done first. You’ll need to create a vacation rental business plan, review and understand all vacation rental rights and laws, go over a vacation rental property management checklist, and know how to rent out your home.
Getting Started with a Vacation Rental Company
It’s crucial to know how to start a vacation rental management business in a way that almost guarantees success. So, whatever you do, don’t start your own property letting business unless you’ve gone over every step in this guide thoroughly.
First and foremost, you must assemble a team of professionals who will be on your side. You’ll need the following people, who are all well-versed in issues pertaining to vacation properties:
- A realtor will provide real estate advice.
- To provide legal advice, you’ll need a lawyer.
- To answer the financial questions, you’ll need an accountant.
- To make sure you’re covered, contact an insurance agent.
- A cleaning and maintenance crew that will ensure that your visitors are happy.
- A listing platform with unrivaled features and unmatched customer service.
- A Business Plan for a Vacation Rental Property
A short-term rental business plan provides a framework for you (and others on your team) to work within. It will assist you in comprehending:
In general, the industry
- You have your own business.
- Your adversaries
- Your clients
Analyzing each of these areas will assist you in prioritizing your objectives and devising a winning strategy.
Template for Vacation Rental Business Plan
Follow a vacation rental business plan example to make the process easier. A good one will consist of at least 11 parts:
- A succinct but thorough summary
- Your company’s who, what, where, when, and why
- The industry’s landscape, including key facts, current trends, and expectations
- Personas of buyers and what they want and need
- Investigate your rivals.
- How do you intend to run your company on a daily basis?
- A strategy for marketing
- How can I get more bookings?
- a breakdown of costs and revenue projections
- How are you going to fund your company?
- The goals and milestones you intend to achieve
- Tax Rules, Permits, and Regulations for Short-Term Rentals
The following are some of the concepts you’ll need to grasp: short-term:
- Legal jargon
- Laws governing taxes
- Requirements for Insurance
- Owners’ rights and guests’ rights
Again, having a reliable team of professionals on your side is critical so you don’t end up breaking the law by accident.
Checklist for Vacation Rental Inspection
After that, make and go over your vacation rental inspection checklist. This will serve as a record of the condition of your property prior to it being rented to visitors. This assists in ensuring that your property is ready for use, as well as assessing damages in the event that you need to file a claim with your insurance company after a guest checks out.
This checklist could include items like entry, appliances, electronics, safety measures, furniture, and so on.
How to Get Your House Ready for Rent
One aspect of preparing your home for rent is to make it welcoming and livable for your visitors. Make sure it’s decluttered, that the paint and flooring are in good shape, that all of the appliances are in working order, and that pests aren’t a problem.
There are also a few things you should do behind the scenes. If you decide to use a property management company, make sure your mortgage is current, that you have a healthy savings reserve (at least three months’ worth of expenses), and that you have a property management company lined up. Of course, you’ll need a solid lease agreement.
Step 2: Investing and Making Money
You want to do everything in your power to make money because you got into this business to make money. For most property owners, losing money is not an option, so investing wisely (in the right place at the right time) and using a good method for setting short-term rental pricing should be high on your priority list.
Beginner’s Guide to Vacation Rental Investing
Knowing whether a rental property is a good or bad investment (and how to invest in rental property in the first place) is a complex topic with many nuances that can take time to master. Knowing the fundamentals, on the other hand, is a good place to start.
An investment in a rental:
Property value increases, the mortgage is paid down, and improvements are made over time, resulting in appreciation.
When the calculation of estimates (rates, expenses, etc.) is positive, it can provide an ongoing cash-flow return.
There’s a chance you’ll lose it, and there’s no guarantee you’ll get it back.
How Much Cash Do You Need to Invest in Real Estate?
A bank loan for a rental property is not the same as a loan for a primary residence. Depending on your credit, you’ll need to put down at least 20%. So, if you want to buy a $200,000 home, you’ll need $40,000 up front in cash.
If you don’t have the cash on hand, think about taking out a home equity line of credit (carefully). Another option is to use “Seller Financing,” which involves the property seller acting as the bank/mortgage company, negotiating a lower down payment, and receiving the monthly mortgage payments.
When and where should you invest in real estate?
When you should invest is largely determined by your personal and financial circumstances. The sooner you get started, as with any long-term investment, the better. This is because, in the long run, property values will always rise.
When it comes to property investment, it’s a good idea to consider both tried-and-true destinations (like Hawaii or Orlando) and up-and-coming destinations (like Texas or near The Great Smoky Mountains). Here are some things to think about:
- Warmer climates (such as Palm Springs) perform better than colder climates.
- There are more bookings during multiple high seasons (such as Lake Tahoe).
- Vacation rentals are heavily taxed in some cities, such as Boston.
- Real estate in urban population centers (such as New York City) is extremely expensive, and there is fierce competition.
- Smaller to medium-sized towns (such as Las Vegas) with high occupancy rates are a good bet.
- Check out this article if you’re thinking about purchasing a beach house.
How to Profit from a Vacation Rental Home
Knowing how to make money on a vacation rental property is obviously essential knowledge to have before getting into this business. Making the proper calculations of the Airbnb Clone app and mastering marketing (which we’ll discuss later) are important, but the way you rent your property also has a significant impact on how much money you’ll make. If you rent out your home on the spur of the moment or without any real intention, you can expect sporadic, marginal returns
On the other hand, if you treat your vacation rental property as a fully-functioning business that values your customers’ presence and comfort, you can do very well.
How to Price Short-Term Rentals
Setting intelligent short-term rental pricing for your property is a task that should not be underestimated. Making an effort and conducting research will make a significant difference in your profit margin.
When it comes to pricing, there are numerous factors to consider:
- Your outgoings
- Your previous rental history
- It is your home.
- Identical characteristics
- Your evaluations
- Your peak and trough seasons
- Your objectives
- You can assess these factors on your own or use pricing tools like:
- Price Checker for Airbnb
- Price Adjustment Tool for Airbnb
- Airbnb Price Calculator
- Vacation rental property in Newport Beach
Step 3: Size the Franchise Opportunity
Once your first short-term rental property has proven to be successful, it’s time to consider turning your company into a franchise. Because you’ll have already completed the majority of the work! You’ll already know how to start a vacation rental business, how to write a vacation rental business plan, how to prepare your home for rent, and how to make money with vacation rentals. Now, simply expanding your vacation rental offerings is simple and quick because the rule of Economies of Scale kicks in, and your overall returns can be much higher with less effort!
Trends in the Vacation Rental Market
It’s a good idea to conduct a vacation rental market analysis. Determine the answers to the following two questions
- What is the size of the vacation rental market?
- What is the potential growth of the vacation rental market?
Statistics, trends, and forecasts in the following areas are some of the things you should look into both in general and in your specific rental property location:
- Vacation Rental Business (companies, growth)
- Guests (investors, properties)
- Visitors (demographics, money spent)
- Places to Visit (seasons, competition, taxes)
- Planning a trip (platforms, marketing media)
- Franchises & Best Property Management Practices
Following best property management practices becomes critical when you own and rent out multiple properties. The short-term rental property’s revenue is maximized thanks to the operations put in place by franchise managers.
You can meet both your own and your guests’ expectations by employing the following strategies:
- Provide clear instructions for the parking/entry situation, the heating/air conditioning system, and the entertainment/electronics system.
- Make sure the kitchen and bathroom are well-stocked. All cookware, coffee maker, herbs/spices, dishwasher/washing machine detergent, toilet paper, and other items are included.
- Maintain a positive relationship with your housekeeping staff and establish clear expectations in writing.
- Inspect everything prior to a guest’s arrival to ensure that everything is in working order.
- Preventive maintenance should be performed so that an emergency breakdown does not occur while guests are staying, causing their trip to be ruined.
- Automate and streamline the booking and payment processes with technology.
- Market in order to increase your market share.
- To establish authority and create rememberability, brand your company.
Yes, you can do all of this on your own, but the more properties you add to your portfolio, the more complicated and time-consuming it becomes. Many vacation property owners seek professional franchise management services for this reason. The benefits and profits gained almost always outweigh the costs. If you want to start your own vacation property management company, speak with a franchise company that specializes in vacation rentals to learn more about your options.
Step 4: Promote Your Company
When it comes to vacation rental marketing, there are numerous reasons to go big. The following are five of them:
- You’ll get a better position in the search results.
- There will be a significant increase in reservations.
- It demonstrates your dedication as a seasoned vacation rental host.
- It gives your potential guests a sense of trust and dependability.
- Your viewers will value the information because it will assist them in making a decision.
How to Market Vacation Rentals
There are literally dozens of options when it comes to marketing your short-term rental. How can you optimize your options so that you don’t waste money but instead make money? The first, most obvious, and best way to get noticed by guests looking for short-term lodging is to list your home on a vacation rental site.
You get a lot more than just a small blip on the results page when you list your property. Listing with Grand Welcome, for example, gives you full access to:
- A cutting-edge web presence
- Online booking is available in its entirety.
- A website with a mobile-friendly design
- Email marketing campaigns that are personalized
- Both organic and paid marketing campaigns on Google and Bing
- Campaigns on social media
- Sample of a property description for rent
Alternatives to Vacation Rental Management Software
Vacation rental software can help you manage your business in the following ways:
- Upkeep of the facility
- Reports and data
Vacation rental management software can help you simplify your own experience as a host while also improving your guests’ satisfaction. Because it is designed to track daily activities such as promotions, guest traffic, cleaning staff, customer satisfaction, and more, it integrates with online booking websites.
When comparing the costs of vacation rental software, make sure you’re comparing apples to apples. What does each program entail, and which one will best assist you in achieving your financial and business objectives?
Step #5: Provide Exceptional Customer Service
After you’ve taken care of the business side of your rental, it’s time to focus on the details that will provide your customer with the experience he or she desires. Here’s everything you need to know before saying, “Welcome!” from concierge ideas to a vacation rental welcome letter to vacation rental cleaning services and a vacation rental maintenance checklist. ”
Concierge Service for Vacation Rentals
The key to getting great reviews after your renters have checked out is to know how to wow them. The term “vacation rental concierge service” refers to the services that make a guest feel welcomed, cared for, and pampered while staying at a vacation rental.
You are not expected to book theater tickets or dinner reservations on demand, unlike a hotel concierge. You can, however, make a lasting impression if you want to! If you don’t live in the area or don’t want to deal with it on your own, there are a number of vacation rental concierge services that will gladly assist you. For vacation rentals, use a virtual concierge service with Alexa.
Some concierge ideas for a more down-to-earth concierge service that still feels personal and makes the stay one-of-a-kind include:
- A welcome snack and beverage from a local purveyor are left behind.
- Suggestions for off-the-beaten-path restaurants
- Free parking passes for frequently visited tourist attractions
- We provide airport pick-up and drop-off as well as local shuttle service.
- Template for a Welcome Letter
It’s amazing how a small gesture can have such a big impact. A vacation rental welcome letter is an example of this.
Because first impressions matter, how your guest is greeted in a strange place can set a positive tone for the rest of their stay.
Here are six suggestions:
- Don’t type it; write it.
- Use high-quality stationery and a good pen.
- Make it unique to your visitors. Include a cute doodle for the kids, for example.
- Include specific information about the property, such as the laundry room code.
- Inviting guests to leave comments in a welcome book is a nice touch.
- Please include your direct phone number and email address.
You are not required to know how to write a welcome letter to visitors. To make the task easier and faster, use a welcome letter sample.
Cleaning of Vacation Rentals
Customers place a premium on the cleanliness of a vacation home. Nobody wants to live in a dusty, dingy, and filthy house. In fact, a stay in an unkempt rental is frequently followed by negative reviews. By following a vacation rental cleaning checklist, you can avoid embarrassment and negative attention.
When it comes to cleaning a rental, some of the items that may not immediately come to mind include:
- Make sure the garbage disposal drain is clear and clean.
- Upholstered furniture with a lint roll.
- Remove food from the refrigerator and throw it away.
- Wipe down the fronts and handles of the cabinets.
- Bring the garbage to the curb.
- Stock up on toiletries and supplies.
- Look for any items that have gone missing.
It’s best to hire a licensed company that specializes in providing a “hotel clean” with high-quality products when interviewing vacation rental cleaning services.
Checklist for Vacation Rental Maintenance
Vacation home maintenance is just as important as vacation rental cleaning.
A good vacation rental maintenance checklist will include not only the usual suspects like landscaping, snow removal, heating, and cooling unit inspections, light bulb replacement, and lock inspections but also the following easy-to-overlook tasks:
- Weather stripping on windows and doors should be replaced if it is cracked.
- Roof gutters should be cleaned out.
- Ensure that the barbeque grill is in good working order.
- Check for dripping faucets and clogged toilets (and replace toilet flappers)
- Flip and rotate mattresses.
- Keep an eye out for signs of pests.
- Examine the fireplace.
- Refrigerator coils should be cleaned.
Maintaining a rental property necessitates a significant amount of time and effort. It’s fine if you live a long way away or aren’t very handy. Simply hire vacation rental maintenance services to handle the job.
Step #6: Begin Your Company
It’s time to take the plunge now that you’ve gone over steps one through five in this comprehensive guide for vacation rental owners.
So, how do you get into the vacation rental business and make money? There are two major options available to you:
With Grand Welcome’s simple and comprehensive management program, you can earn money from your vacation rental property.
The following are the four steps to listing with us:
- Set objectives and sign a contract.
- Setup and evaluation
- Complete the property details.
- Your property is now operational.
- Open a vacation rental management franchise with Grand Welcome Franchise and work from home on your own schedule while our team of experts assists you. Start a business with a small initial investment and a large profit margin. Do you have any further inquiries? More information and resources about the franchise opportunity can be found by clicking the links below.
- Discover why Grand Welcome Franchise is the best option for you.
- Read our Vacation Rental Franchise Frequently Asked Questions.
- Please fill out the form below to receive your free Franchise Information Kit.