Have you been mulling over the possibility of starting a business that could become a passive income source? Are you organized, self-motivated, and great at interacting with customers? If so, you might want to consider renting out vacation properties as a fun and lucrative business idea.
And you don’t need to purchase a cabin in the woods or a home on the beach to find success — a home in a neighborhood can be the ideal vacation rental property for some vacationers (though it’s important to make sure you don’t run afoul of HOA or zoning guidelines).
Here are some important considerations to keep in mind:
Have a clear idea of the type of business you intend to run, and its basic organizational and administrative structure before you start.
There are two basic models for running a vacation rental business. One involves purchasing properties as an investment, the other involves being a property manager for owners of vacation rentals or resorts.
Write up a real estate business plan for your rental company. When writing your plan you should consider especially your financial plan, your marketing plan, and your business goals.
Register your business as a legal entity in your state and get your tax ID number. As a registered LLC, you will have better liability protection for your personal property should anything go amiss with your business.
Prepare your property to host guests.
A successful vacation rental business depends partially on having a great rental property that people will immediately be drawn to and want to go back to.
Have a budget for what you can afford to purchase or otherwise invest in. This should include not only the purchase of a property if you do not yet have one, but also ongoing expenses such as utilities, taxes, and repairs. Use a loans API to review and track balances, access liabilities like loans and credit cards, and enable payments.
Decide on the type of property you want to own or manage, and the general location. Research property values and the general market, in the location you’re considering.
If repairs or renovations are needed, be sure you have the capital to afford them, and that it will be worth your while.
Get your vacation property cleaned, renovated, and refreshed. Whether you’re aiming for luxurious, quirky, or rustic, make sure you’ve set it up with all the amenities a vacationer will need to enjoy their stay in comfort.
Having an outstanding rental is only part of what makes a successful vacation rental business. You also need great marketing and an accessible booking process.
Decide on the pricing for the You want to aim for a price that’s low enough to be competitive, but which will still earn you income.
Have an online presence, so your company and your property are easily findable.
Know your target demographic and utilize social media and other marketing to make sure you reach them effectively.
Create a process for booking the property, including the software you need for online reservations, and a rental contract.
About the Author: “Ron Kane started early in learning about roofing and house maintenance projects. While other kids were sledding and being tricked into eating yellow snow, Ron and his brother, Dennis, were starting their own sidewalk shoveling business and helping their dad repair and replace roofs. Through the years, they’ve learned a lot about what it takes to protect your home and family from winter weather.“