Owning a Vacation Rental: Tips for Long-Term Success

Thinking about investing in vacation rentals? Owning a vacation rental property offers opportunities not only to make money but also to meet new people and learn new things, so it can be financially and personally rewarding. But before you take the plunge, there are many things to consider.

Buying a Vacation Rental Home for Renting It Out

Owning a vacation rental property isn’t just like traditional real estate investing because buying it requires a good understanding of the local markets and the projected revenue of the vacation home.

You should start with market research, paying attention to several aspects to find the best opportunities for your vacation rental investment. Your goal should be to find a property with great earning potential that can provide you with a steady income if you list it on Airbnb and other OTAs.

But identifying the investment opportunity that makes the most financial sense isn’t enough. If you want to be successful in the vacation rental market, you’ll need to work hard to provide your guests with a fantastic experience and ensure perfect communication with them during all stages of the customer journey.

Typing each message repeatedly for each guest to provide them with the necessary information is very time-consuming. That’s why many successful STR hosts choose to automate this aspect of hosting using tools like Hospitable.

Location is the most crucial factor for travelers, so it should be equally important to you. Your task is to find a good spot for your vacation rental that will attract tourists. You need to evaluate factors such as the rental market conditions, proximity to specific amenities and attractions, employment rate, weather, etc.

Remember that your property’s location should offer some appeal to a specific group of guests. For example, vacation rentals in small tourist destinations may be a better match for leisure travelers, and those in urban areas may be best suited for business travelers.

It’s essential to take into account seasonality and demand. Some locations don’t attract tourist traffic all year round—they are only attractive to travelers and during specific seasons, while other areas are busy during the year.

For example, a beach house may attract more bookings in summer and provide higher rental income than vacation rentals that don’t offer beach amenities. And a STR property in a large city may be attractive to both leisure and business travelers all year round. So if you want a more predictable source of income, it’s best to focus on popular urban locations.

You should also consider local and state STR laws and regulations. You should study them thoroughly before buying a vacation home in a particular location because some cities may restrict your ability to host paying guests for short periods.

Once you’ve found a property in an area with enough demand and host-friendly regulations, you can start estimating your earning potential and possible expenses affecting your bottom line. You should assess your costs vs. potential earnings to ensure profitability.

Doing your own analysis and estimate can be challenging, so using Airbnb analytics tools for investors like AirDNA, Mashvisor, or Rabbu is better. They can help you make an informed decision and choose a lucrative property, reducing your research time considerably.

Get Your Vacation Rental Ready for Guests

After you’ve bought a property that can be a profitable investment, you need to prepare your vacation rental for welcoming guests. It’s essential to remember the comfort and convenience necessary to ensure an enjoyable stay.

• You may need to upgrade your vacation home room by room and invest in furnishings, such as furniture, bedding, towels, etc.

• While doing a renovation, you should focus on bathrooms and kitchens first because these are areas where travelers expect cleanliness and functionality.

• Equip your vacation rental with popular amenities and supplies guests need for a comfortable stay.

• Take care of the safety features—equip your rental space with a carbon monoxide detector, smoke detector, fire extinguisher, and provide a first aid kit.

• Install a smart lock to offer your guests a self-check-in That will save time for both you and your guests.

• Deep-clean every room to make sure your property is spotless and ready for guests.

Build a Team to Outsource Regular Tasks

Vacation rentals require higher maintenance and more upkeep than traditional rental properties. One of the most critical aspects of your business is keeping your vacation rental ready and spotless before welcoming guests. So you’ll need to hire a reliable cleaning service specializing in cleaning vacation rentals to tidy up your property during each turnover. Provide them with a cleaning checklist to ensure the same cleaning process is followed after each booking.

It’s also important to perform regular maintenance to keep your vacation rental in great shape and avoid serious issues that may require costly repairs. This work usually requires specialized knowledge and skills that you likely don’t have, so it’s better to outsource it to professionals. Then you should build a team that includes such professionals as electricians, plumbers, and cleaners, hire laundry services and work together to ensure that your STR property is always guest-ready.

Streamline Your Hosting Operations

Vacation rental management requires attention to detail and can be time-intensive because guests turn over frequently. Hosts have many responsibilities to provide a great experience to their guests; work never stops. You must regularly update your calendars on all your booking channels, send reminders to your team to let them know they have a job to do, and communicate with your guests before, during, and after their stay. You’ll also need to constantly adjust your prices according to the changes in supply and demand to ensure they are competitive.

Hosting routine is very time-consuming, so many hosts opt for vacation rental software like Hospitable to streamline their operations and save time. Hospitable has a comprehensive set of useful features and can help you automate repetitive tasks and run your STR business on autopilot. 

Is Owning a Vacation Rental Property Worth It?

Yes, if you do everything right. If you buy the correct type of property in the right location and manage it well, your vacation rental can generate high returns and pay for itself. Moreover, owning vacation rentals can offer higher profit margins and provide more opportunities for investment growth than owning traditional investment properties.

And if your vacation rental is located in a high-demand area, it will increase in value year after year, especially if you maintain it properly and continue to make changes and renovations to keep it up-to-date.

Final Thought

If you do everything right, you will reap the many advantages of owning a vacation rental property and can turn it into a major income-generating business. But it is only possible if you find and buy a profitable vacation rental property in a great location and put in work to create a unique experience for travelers.

Managing a vacation rental requires a significant time commitment, so a good idea is to streamline your hosting operations with vacation rental software like Hospitable. By automating your routine tasks, you’ll increase your efficiency and reach your business goals faster.

The vacation rental market is highly competitive, so you’ll need a comprehensive marketing strategy to survive and thrive. Check out our 101 guide to learn more about marketing vacation rentals.