How to Start a Vacation Rental Business
Here's a quick reference guide to beginning your vacation rental business. Vacation rental properties come in all shapes and sizes (single family home, condo, cabin, cottage, chalet, villa, apartment, estate, lodge, townhome, studio, castle, farmhouse, bungalow, and boat) and have different peak seasons (summer, ski, fall foliage, etc.). If you enjoy your vacation home, it's likely that renters will, too!The first step in starting a vacation rental business is putting together a business plan and purchasing a vacation property. The type of second home that you can purchase depends on the region.
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?
- Am I buying a second home or an investment property?
- What kind of mortgage should I get?
- Should I buy a house or a condo?
- Who's my target renter (families, snowbirds, couples, etc.)?
After sorting out the legal side of things, it's time to figure out how you're going 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 you charge per night, week, month, etc.?
- Am I going to charge by night or by person?
- Am I going to require a security deposit?
- Which fees am I going to charge (cleaning, etc.)?
- Which types of payment methods will I accept?
- How am I going to handle keys?
- Am I going to accept pets?
- What is my refund policy going to be?
Next up, make sure that you have the right amenities:
- How am I going to furnish my property?
- Which types of beds will best suit my property and my renters?
Now it's time to advertise and pull in the 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. If you're just starting out and are looking for vacation rental by owner tips, read: How to Rent Vacation Properties by Owner: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment and/or attend one of our owner seminars.
Download our printable Checklist for Turning Your Second Home into a Vacation Rental that you can save and edit yourself.
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© Copyright HomeAway, Inc. 2008 |
Updated: September 21, 2009 |
Owners Speak
What other steps did you take before you started renting your vacation home?
"I met some of my neighbors who were already renting and talked to them to get ideas. I also tried calling some owners on VRBO, and a couple of them were more than willing to help me get started. Talking with other vacation rental owners really helped me to get a feel for where to begin." Denise, Scottsdale, Ariz.
Related Webinar
Vacation Renting 101
In this online tutorial, you'll learn the seven basic steps to renting your vacation home by owner. Watch now