Renting out your property short-term has become increasingly popular in recent years. Sites like Vrbo or Airbnb make it easy for anyone to create a listing and make extra money.

But while owning a vacation rental property can be more profitable than running a traditional long-term rental, it also comes with challenges. So if you are considering becoming a Vrbo host, there’s much to consider before diving in.

Read on to discover how to start a Vrbo business and what you need to do to make it a success. You may also want to download our free detailed guide on building an efficient short-term rental business.

How to Start a Vrbo Business: Essential Steps

If you own a secondary home in a popular travel destination, Vrbo could be a good opportunity to bring in some extra income or even turn your side hustle into a full-time vacation rental business. So where do you start?

Research local STR laws and regulations

Before planning your Vrbo business, it’s essential to consider legal issues first. Research short-term rental laws and regulations in your area to ensure you can rent your space and it is worth it. Keep in mind that STR regulations vary by state and city, and depending on where you live, there might be specific requirements at the country, state, city, or even property level.

Many state and local governments in large cities and tourist destinations have passed laws restricting the right to rent homes and apartments on a short-term basis. Many localities only allow short-term rentals in specific zones and limit their numbers, set the minimum and maximum number of days you can rent out your property per year, etc. Some cities even prohibit any forms of short-term rentals.

For example, the local government in Honolulu has passed regulations that ban rental stays under 90 days. And in New York, it’s illegal to rent in New York City for less than 30 days without the host present. There are also strict registration, zoning, and maintenance rules for STR hosts, who must provide proof that they live in the properties with their guests.

Local regulations are also related to licenses and permits, building safety standards, health codes, liability insurance, and parking. STR laws and regulations are constantly in flux and can be confusing, so it’s essential to check out government websites and contact your local authorities with any questions. It’s a bad idea to rent out your property on Vrbo and its alternatives in violation of state or local STR regulations because you may be fined or suffer other penalties. 

Still, the vacation rental market is trending upward, and in many urban areas and popular travel destinations, running a Vrbo rental can be profitable if you treat it as a business. You also need to do your best to provide an excellent experience for your guests, and one of the most important aspects to ensure this is effective and fast communication.

Being available to your guests 24/7 is very challenging to answer their questions and provide the necessary information at the right time. That’s why many successful STR hosts automate guest messaging using tools like Hospitable.

Budget your expenses

If you want to succeed in the vacation rental industry, it’s important to approach hosting with a business mindset. Decide how much time and energy you want to invest in running a Vrbo and set realistic business goals and expectations. Think about how much money you want to make, how much business growth you project annually, and how long it can take to hit your targets.

Do market research to understand how much you can earn with your STR property and consider all costs associated with starting and running a vacation rental. The cost to start a Vrbo business will likely vary in different locations, depending on several factors, including your target guests.

For example, if you want to target backpackers and adventure travelers and start a glamping business on Vrbo, this option requires low investment. But suppose you want to rent out your vacation home to families with children, large groups, or business travelers. In that case, you should consider the upfront costs of redecorating and furnishing your property.

You’ll also need money on stocking essential supplies and providing basic and extra amenities to ensure your guests feel comfortable during their stay. Other costs include the price of obtaining a business license or extra short-term rental insurance and expenses related to maintaining your rental property. They include the costs of utilities, regular repairs, and maintenance, Vrbo fees, subscriptions, hiring a cleaning service, etc.

Understanding these expenses in advance is crucial for managing your expectations about the profitability of your Vrbo rental, so make sure you’ve counted all your costs.      

Apply for licenses and permits

There are many areas where property owners are required to register and apply for permits or licenses if they want to rent out their homes on a short-term basis. Depending on the local STR regulations, this could include getting a general business license, sometimes called a business tax certificate, and a short-term rental license.

A general business license is required from all business owners in most states, and a short-term rental license demonstrates that your rental is up to code and complies with certain safety and health standards. In some cities, you may also need to obtain a permit to rent your property, which involves a home inspection and an annual fee.

You should contact your city or county officials to learn more about what is required of you. You can apply for the license on the city’s website by submitting a relevant form or visiting your local City Hall for the paperwork.

You should also visit your local tax office to get the necessary information about the taxes you must pay as a vacation rental property owner. You may want to check out our article to learn about vacation rental tax rules in the USA and find some valuable tips on how you can keep your income taxes to a minimum.

Remember that opening your door to strangers comes with risks of personal liability and extra taxes owed. But you can protect your personal assets and enjoy tax benefits. Check out our blog article to learn how starting a limited liability company (LLC ) for your STR business can help protect your assets from lawsuits and creditors and save taxes.

Prepare your home for welcoming guests

The next step is getting your home ready for guests, keeping their comfort and convenience in mind. Think about your target guests as you decorate, furnish, and equip your rental space with amenities to ensure it meets their needs and expectations for a great stay.

If you want to attract a wider audience and get more bookings, try to create a comfortable and inviting space for any guest, be it a business traveler, a family with kids, or someone traveling with a pet. Invest in practical, durable short-term rental furniture—this way, you can save money in the long run. If you are on a budget, you can mix store-bought items and secondhand pieces, but avoiding buying the least expensive items is always better. 

Remember that many travelers stay in vacation rentals to feel at home even when they’re away. So it’s smart to add cozy, homey touches with a throw pillow, soft blankets, cozy area rugs, interesting artwork, green plants, and other design details.

Check out our article to find interior design tips on making your vacation home special and charm potential guests even during the research stage.

Your Vrbo guests will need essential supplies to make their experiences comfortable, so stock your rental with basic items and extras. Specifically, you must invest in new towels, linen, and bedding. Equip your home with popular amenities that help travelers have an enjoyable vacation.

A good idea is to check out local Vrbo listings to see what amenities your competitors offer. You may use our Vrbo checklist to ensure you have the proper inventory for every stay so you never fall short of guest expectations.  

Consider installing a smart lock to offer your guests a self-check-in. This way, they can have a flexible arrival time and more privacy. Then you’ll need to provide your guests with unique codes and won’t have to be there when guests arrive at your property, which means less stress for you and travelers. And if you opt for Hospitable, which has integrations with popular smart lock systems, it will automatically create and send unique door codes to your guests shortly before check-in.

Set competitive prices

Attracting more bookings while remaining competitive is essential to running a successful Vrbo business. That’s why you’ll need an effective pricing strategy to help you achieve this goal and maximize your revenue potential. But finding that just-right rate isn’t easy—you need to pay attention to market data, seasonal demand trends, and local competition. 

When you’re new to Vrbo, you may start with lower prices to appeal to budget-conscious travelers and encourage early bookings. But after you get a few positive reviews that will help increase your visibility, you should gradually increase nightly rates to align with similar Vrbo properties in your area.

It’s important to analyze market trends and adjust prices accordingly to ensure that your listing remains attractive to travelers throughout different seasons or events happening nearby. Use dynamic pricing, an optimization technique based on market supply and demand, days of the week, lead time, and seasonality.

This approach will help you capture the highest number of bookings on Vrbo and make top dollar on every reservation. You can use tools like PriceLabs, Beyond, and Wheelhouse that offer dynamic pricing algorithms explicitly designed for vacation rentals. They can help you respond quickly to changes in demand and optimize your profits.

Create a stellar Vrbo listing

Create an account on Vrbo and set up your listing. First, you need to consider a catchy title that mentions a unique amenity, a special offer, or something that sets your listing apart. This way, you can encourage travelers to click and learn more about it.

Write an accurate description of your property that showcases your vacation rental’s biggest selling points. Make your description informative and include basic details about everything that’s important for your guests. Specify how many rooms and bathrooms there are, what amenities you offer, and what’s nearby the property. Get creative and highlight the unique features of your vacation rental. Describe the kind of experience guests will have during their stay.

Upload at least 20 high-quality photos of your rental in landscape orientation; the more, the better. Include pictures of each room in your home and the outdoor area and highlight unique features of your property or some charming details. Post the photos in chronological order to create something like a virtual tour of your house.

You’ll also need to provide an accurate address of your vacation rental home, your payment and banking details, set your nightly rates and additional fees and include clear Vrbo house rules. 

You can find more tips on creating and optimizing your Vrbo listing to improve its visibility if you check out our blog article about how to list on Vrbo.

Hire a cleaning service

Although many people choose to stay in Vrbo or Airbnb rentals instead of hotels, they still expect the same hotel-quality cleanliness. In fact, cleanliness is a top priority for travelers. That’s why it’s important to thoroughly clean your STR property during each turnover to ensure it’s ready to welcome new guests.

Of course, you can clean your rental space yourself and save some money. But going a DIY route means you’ll have to live locally and have enough time to carry out a deep clean once a week on average. And keep in mind that in high season, you may be required to clean your rental two or three times a week, working with tight turnarounds, which can become a source of constant stress.

Outsourcing this task to professionals specializing in vacation rental cleaning will benefit you in the long term. You’ll have to pay for their services, but they will save you the time you can spend on other critical business areas, such as marketing your vacation rental. 

Professional cleaners will help you create an inviting environment for your guests, so you’re more likely to get great reviews that can win you more bookings. But you must provide your cleaners with a comprehensive Vrbo cleaning checklist to help you set clear expectations and ensure your team won’t miss anything.   

Use automation software to manage your rental efficiently

Running a short-term rental property is similar to being in the hospitality business. You need to take care of your guests and your home and deliver a 5-star experience, and that involves a lot of responsibilities and routine work, including:

• Responding to booking inquiries

• Communicating with guests before, during, and after their stay

• Managing guest reviews

• Handling bookings, cancellations, and refunds

• Setting and adjusting competitive nightly rates

• Restocking supplies for each stay

• Organizing guest check-ins and check-outs

• Managing cleaning and maintenance team, and more

If you have enough time, you can manage everything yourself and fully control all your daily operations. But it can be very time-consuming, especially if you have more than one property.

You can also hire a property manager to do the work for you and get a real estate passive income. But property managers charge a hefty fee for their services that would drain your profits. So what can you do if you don’t have time to manage your Vrbo business yourself and don’t want to hire external help?

Use reliable vacation rental software like Hospitable and automate most of your routine tasks. Hospitable is an all-in-one solution with advanced functionality to help you run your STR business on autopilot.

With Hospitable, you’ll be able to ensure that everything runs smoothly and streamline many routine operations, including

• Responding to booking inquiries and answering guests’ questions

• Creating an automated message flow for each guest

• Assigning tasks to your cleaners and maintenance team

• Updating calendar and prices on Vrbo, Airbnb, and Booking.com

• Automating guest reviews, etc.

We’ll also help you create a fully-functional direct booking website and build relations with guests to drive repeat bookings. There are also some unique features based on AI, like the ChatGPT integration and detecting questions in guest messages on 20+ common topics and responding to them automatically on your behalf. Hospitable will help you manage your Vrbo rental more efficiently, minimize costs, and give you tools to scale your business faster.

The Bottom Line

As you see, there are so many things that you need to consider when it comes to owning an Airbnb or Vrbo, and success can only come from extensive planning and consistent work. Hopefully, our guide on how to start a Vrbo business will help you make the most out of it.

You need to research, budget, get licenses and permits, create a perfect listing, put in the time to market your property and do your best to ensure your guests have a memorable experience. You must also invest in vacation rental automation tools to help you run your Vrbo rental effectively.

And if you want to scale your vacation rental business eventually, software like Hospitable should become an essential part of your operations. It can save you hours by automating your routine and streamlining your management.