Starting a Vacation Rental Business

Are you thinking about starting a vacation rental business? First and foremost, you need to ensure you understand the industry and all the operations.

If you don’t know where to start, read this article where we discuss the basics. Here you’ll find some must-know tips for vacation rental success.

So what is a vacation rental business? Vacation rentals are private properties that are rented out to short-term to travelers as an alternative to hotels. Their main advantage is they offer more facilities (such as kitchens), privacy, and access to local culture.

Vacation rental properties are not limited to traditional-style homes and include villas, cottages, beach houses, condos, apartments, and more. They can also range from affordable apartments to luxurious villas located in the world’s best tourist destinations.

Are Vacation Rentals Profitable?

Investing in vacation rentals is an excellent way to earn some passive income. But can you make good money with a vacation rental property? Essentially, vacation rentals can be profitable because they are popular with people renting properties for a short period.

The primary factor that affects profitability is location. Why? Profitability is based mostly on occupancy level, demand, competition, and rate, so the more attractive the location, the higher probability the vacation rental will be profitable.

Besides, short term vacation rentals can outpace long-term rental properties when it comes to potential rental income. That’s why a vacation rental is a good investment for those who want to start investing in real estate.

How to Make Money on Vacation Rental Property

There are two main approaches you can use when it comes to building a vacation rental business.       

You can invest in buying property, which you can also use as your second home. This path requires thorough research to determine which locations will draw a steady flow of guests.

Another business model is rental arbitrage when you rent a property long-term and then re-rent it to travelers short term with the permission of the landlord. This path allows you to make money on vacation rentals without owning the property.

You’ll need to list your vacation rental properties on platforms like Airbnb,, and Vrbo and do your best to ensure perfect guest experience. This narrows down to:                              

  • fast responses to guests’ requests before, during, and after their stay
  • providing them with all the necessary information about your place and neighborhood
  • having a flawless check-in and check-out
  • keeping the place tidy and equipped with the necessary amenities

How to Start a Rental Business?

Starting a vacation rental business involves several essential steps.

Start with the right vacation property that can earn you a profit. Location is the most important factor you should consider. Homes with immediate access to a nearby attraction (the city center, the beach, the ski slopes, a theme park) are the best choice for an investment property.

Make the place look incredible. Decorate and furnish your home to create a beautiful space for your guests. If you impress your guests with the appearance of your home, they may even post it on Instagram. And that’s immediate free marketing for you!

Offer amenities to your guests – always offer WiFi, consider purchasing a washer, a drier, a hot tub, have a Smart TV, welcome pets, etc. People want to get the most out of their vacation. The more amenities you offer to your guests, the more likely they will stay at your place.

Design your place with efficiency in mind. Your objective is to make your vacation rental place cozy and durable at the same time.

Create a stellar listing. Invest in professional photography to give your guests a crystal clear picture of what it’s going to be like to stay in your property. Write short, accurate, scanable descriptions to highlight attributes that are hard to capture in a photograph.

Decide on the right rate. Make sure that your rates cover the expenses and that they are competitive. You will need to do some research to make sure that your property is priced right for your location and for the amenities and services you offer.

Market your home. Place your listings on multiple platforms like Airbnb,, and Vrbo

How to Run a Vacation Rental?

Managing vacation rentals is not the same as managing full-time rentals. You need to operate a vacation rental in a way that occupancy and nightly rates are kept high to enable high returns.

It’s important to run your vacation rental like a business. It will need thorough processes and timely actions from a committed team. Your cleaners and maintenance staff will need some guidance and timely communication. There are three fundamental approaches to running a vacation rental:                               

  • Keep yourself busy with routine operational work. This might be a good idea at the beginning of your journey, as you will need to know how your business works.
  • Hire a property management company that would deal with all the routine on your behalf. The obvious drawback is that they won’t do it free of charge. Before you build a network of short-term rental properties, this approach would drain your profits.
  • Rely on software to automate the routine. This approach will allow you to stay in control and get rid of the routine at a reasonable cost.


As you see, starting a vacation rental business isn’t all that different from just about every other entrepreneurial endeavor. And it’s not simple. You need a comprehensive business plan, a great team, and the right tools to streamline your operations.

Starting your own business comes with a lot of responsibilities. But if you take time to do it right, you’ll likely find the reward is well worth the effort.