How to Start a Vacation Rental Business
There are multiple strategies that have been employed in the vacation rental market today for starting a vacation rental business. For some well resourced and savvy investors, they will buy investment vacation rental properties in their area or desirable areas and rent those properties on a short-term basis while they are not utilizing or maintaining their properties. For others not as resourced and not looking for direct investment buying vacation rental properties, an alternative could be to start a vacation rental management business where they offer owners of vacation rental properties a localized full-service vacation rental management solution for their properties.
In general, no matter which approach is utilized there are several questions to answer and many things that need to be considered when considering starting a vacation rental or rental management business.
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➜ How To Start a Vacation Rental Business
First, what is a vacation rental business?
A vacation rental business could be defined as a business which markets and offers guests on a short-term basis the ability to rent vacation properties. The vacation rental business may also provide on a routine basis the local guest services, ongoing maintenance, and housekeeping or cleaning services for the vacation rental properties under management. There are variations in the market today on which of these elements are offered as part of the business.
Second, how to start a vacation rental business?
In either case, there are many things that should be considered such as:
Developing a marketing strategy for vacation rental property owner marketing. This effort is geared towards soliciting more vacation rental properties to manage under your vacation rental management business.
Creating a marketing plan for robust guest marketing of the properties. This could involve selecting a pre-existing Property Management System (PMS) which can in many cases automate many aspects of the guest marketing efforts associated with the vacation rental properties.
Determining what relationships will be needed and which vendors could be solicited in the areas of guest services, routine cleaning and housekeeping, and ongoing property maintenance. And developing the marketing and/or training for these vendors.
Evaluating which areas of the business would need to be staffed for versus utilizing the vendors listed above and developing the hiring strategies and materials needed for successful onboarding and offboarding of employees.
Creating a strategy for regular vacation rental property owner communication for maintaining ongoing property owner relations.
Researching local tax laws as it relates to vacation rental management at the state, county and/or local level and investigate what licensing is going to be required. In some states, a real estate broker’s license may be required.
Determine what software and procedures are going to be necessary for properly managing rental revenue, paying online travel agency (OTA) commissions associated with marketing properties and
Developing a formal business plan for the vacation rental business is going to be key. This will assist in determining how much capital is going to be required and will also help in developing a budget and cash flow model for the business to ensure it is a viable option producing reasonable results.
Creating a plan and evaluating software that can help solicit positive 5-star customer reviews and manage any customer related concerns or complaints.
Evaluating accounting procedures and software or required bookkeeping services as well as what types of insurance need to be considered for the business.
Third, determine if starting a vacation rental business is something you really want to embark upon.
Do you have the necessary financial resources to get the business launched and to carry the business until it is generating a decent profit or return? How much time and effort do you have to devote to starting the vacation rental business to not only build up the business, but also manage it ongoing?
All these questions are key questions anyone considering starting a vacation rental business should be answering well before embarking on the journey. Starting a vacation rental business is not going to be right for everyone. The market is competitive and highly fragmented with a lot of mom and pop and independent operators of vacation rental management businesses.
One thing you might consider if you think starting your own vacation rental business looks daunting and/or you don’t want to deal with trying to figure it out on your own through trial and error, is to consider looking into a vacation rental management franchise. A franchised business gives you a proven system and model to follow in starting your business and is usually time tested and adapted over several years making it easier for people who want to go into business for themselves, but not do it alone.
As a part of the franchise offering, the franchisor will normally provide comprehensive initial training and ongoing support for most areas of the business such as sales, marketing, operations, finance and accounting, and much more. You are somewhat buying a “business in a box” so to speak and normally depending on the age of the franchise, the franchisor has spent years dialing in the business model to ensure success if the model is executed properly by the franchisee.
Grand Welcome Franchise is a vacation rental management franchise that has spent over a decade starting vacation rental businesses and today has presence in 16 cities across 5 states managing a portfolio of over 700 properties. Now through franchising, Grand Welcome helps people that don’t know how to start a vacation rental or vacation rental management business do just that, but with a time tested and clearly defined proven system that provides a clear roadmap to success. All you have to do is follow the proven model and execute the strategies as set forth as part of the franchise offering and you could be on your way to success with your own vacation rental management franchise.
The path to starting a vacation rental business or vacation rental management business is much like starting any other kind of business…long, windy and even bumpy at times. Whether you choose to go it alone and start your own independent vacation rental management business or look at opening your own vacation rental management business through a franchise like Grand Welcome Franchise, the ultimate goal would be for you to be successful in the endeavor. A franchise can offer a lot in terms of efficiency in getting started and operating the business long-term. Not to mention you don’t have to go it alone and try to reinvent the wheel. Something certainly, you will want to consider and weigh into your decision making as you look at starting a vacation rental business. Contact us today to start your vacation rental management franchise and get FREE Franchise Information Kit.