If you’ve been chasing the lucrative property options for investment, you must have heard that the vacation rental industry is thriving globally. Because people are cosmopolitan and love to travel the world, there’s been a sudden increase in the demand for such places. However, the only question that continues to bother everyone is, where do they start?
Long story cut short, you need to develop a strong understanding of the industry before stepping foot in it. Because vacation rental is a growing industry, many investors will quickly become opportunists without even knowing anything about the industry. So before you consult the land clearing services to clear the spot, we request you to sift through this blog to know about starting a vacation rental business.
What is a Vacation Rental Business?
As the name implies, a vacation rental is about private properties being rented out to travelers. Don’t mistake them for the conventional hotels because they provide a completely different experience to the traveler. Unlike a hotel, the vacation rental will provide the customers with additional facilities such as a kitchen, spa, swimming pool, privacy and even access to the local culture. Therefore, when a vacation rental business is started, the basic idea revolves around maintaining, acquiring and marketing these properties to prospective travelers.
How to Start a Vacation Rental Business?
Bear in mind, when a vacation rental business is concerned, there are two basic approaches to this:
✔ Investing in Your Personal Property
As much as it sounds easy, you need to dig deeper into the market to understand the demand for the locality where your property is located. For example, if your property is located close to the beach or a commercial area, the demand will be very high, since travelers are looking for access to the basic amenities. On the contrary, if your farmhouse is located in the countryside with little access to shopping centers and health facilities, investing money in it as a vacation property might not unleash the desired results.
✔ Managing Other’s Properties
This option is usually not a primal thought in any business owner’s mind, since they want to be self-employed. However, since the startup costs of such a business are very high, not everyone will have the guts to take a big risk. Still, you need to take care of everything, in case you decide to manage properties for other people. For instance, from minor issues such as lighting fluctuations to larger problems such as emergency water damage restoration, you will be taking care of everything.
Once you’ve decided to work on one of these models, you can prepare a plan of your vacation rental business to see what it will entail to successfully run over time.
How Much Money Can Vacation Rentals Make?
One of the most important questions to look to answer for is, how much money can vacation rentals make? In simplest terms, the vacation rental business will earn you much more than you can possibly imagine. It has been chanted as the most profitable business globally. Having generated a revenue of $80 million alone in 2019, the vacation rental business has emerged as a lucrative investment by many business people. In case, the vacation rental is located in an exotic location with all the luxury facilities available, one can easily charge $100,000 for it. However, the level of services and the facilities provided will have a strong impact on the final price.
Regardless of what kind of property you’ve got for the audience, one of the easiest ways to maximize profits is to set up a dynamic pricing model. This way, you can grab several customers during the first few weeks of promotion and get them to pay what you demand.
Do You Need to Hire Staff for The Vacation Rental?
Yes, you do! After all, a massive property needs a manager who can take care of everything. Because good customer service can make a vacation rental stand out. Even if you’re hand on with every major task of the property, still, you will need somebody who can manage everything in your absence. So look for a person who has experience in vacation property management, so you can rest assured about their work. Of course, most vacation rental managers are experienced professionals, still, you can conduct a one to one interview to get to know them personally.
You can also ask them a bunch of challenging questions to see if they can take care of their work or not. If you have any reservations about the work of a certain property manager, ignore them and consider other options. Bear in mind, even if you have the most lucrative vacation rental for travelers, not having stellar customer service or even a manager at the front desk will make things worse for the business. Because word of mouth is a major marketing tool right now, you need to ensure that the property has a well-organized staff.