The vacation rental industry is ripe with golden opportunities and low-hanging fruit for anyone who is just starting. On top of that, the industry keeps growing every year. That means you don’t have to fight for a piece of the pie – it just keeps getting bigger.
If you’re new to owning and operating a vacation rental property or thinking of getting started, there’s a lot you can do to shorten your learning curve and boost your revenue from day one. You can start by avoiding some of the common problems in running vacation rentals. But most importantly, you can learn from seasoned veterans and vacation rental experts. To help you out, we asked these industry pros what tips they’d give to new hosts on owning a vacation rental. Here’s what they said:
Identify a specific demographic and market for them
Amanda Duff is a hotel publicist and tourism industry veteran. She’s spent over a decade helping hotels fine-tune their public relations marketing strategies. Amanda also operates a vacation home that she markets via VRBO. Here’s one tip she took from the hotel industry and applied to vacation rentals with success:
My best advice is to market your vacation rental to a specific demographic. Start by identifying what makes your home unique. Then emphasize those particular features in your listing description and pictures. Sounds vague? Here’s an example of this strategy in action. We have a toddler, so our vacation rental home has all baby safety bells and whistles. Gates, safety latches, electrical outlet covers, and everything in between. We also transformed a small office into a playroom – because most of our targeted guests don’t require a dedicated office when they’re in our home. Many guests have told us they’ve booked our property because of its baby and child-friendly features. By identifying amenities guests are willing to pay for, we were able to decrease vacancy rates and increase revenue.
You don’t have to break the bank on upscale decorations and freebies to make an impression
Jordan Bishop is a writer and digital nomad. He’s earned the Superhost status and operates a stylish designer loft in central Istanbul that earned the coveted Airbnb Plus title. Jordan boosted his property with unconventional tricks that every new host can implement:
You don’t have to break the bank when it comes to decorations and freebies for your vacation rental home. In fact, dollar stores are a great source of cheap, but upscale-looking items any host can use to transform a bland vacation rental into a designer’s paradise. Here are a few I used in my own Airbnb Plus property:
- Candles: Candles can get expensive. Luckily, there are plenty of great ones at the dollar store. I’ve had several guests tell me that the candles I left out for them were a lovely gesture. It’s a luxury item that boosts the guest experience by setting a great ambiance with the added benefit that it makes the apartment smell great.
- Bathroom organizers: Guests love having a handy bathroom organizer that allows them to arrange their toiletries and makes them feel at home during their stay. The dollar store has a bunch of different varieties, most of which look great.
- Dishware & cutlery: The dollar store has plenty of great dishware and cutlery that you’d never know only cost a buck. The other bonus of buying dishes at a dollar is that they are easily replaceable. If a plate breaks or you lose a fork, you don’t need to buy an entirely new set – just grab one more, and you’re good to go.
- Picture frames: Just like dishware and cutlery, you can get great-looking picture frames at the dollar store, and no one would ever know where they came from. If you have a lot of photos in your home, as I do, this is a huge money-saver.
- Premium toiletries: My rule as a host is that anything that touches my guests’ bodies has to feel luxurious. I always offer brand-name soaps like Dove. Surprisingly, you can find these high-quality items at the dollar store.
- Greeting cards: One unique thing I like to do for my guests is leaving them a pre-stamped postcard that they can mail to a friend or family member around the world. And where do I get those postcards? You guessed it: the dollar store. Guests think this is such a thoughtful touch that they often write about it in their reviews. It doesn’t take a lot of money to impress!
Do everything you can to get reviews
Guy Novik is the Managing Director of Orlando Villa Holidays, a vacation rental company that specializes in high-quality luxury villas in the Orlando area. Guy’s company currently operates 250 villas. Here’s one of his tips for owning a vacation rental:
Reviews are amongst the leading factors which holidaymakers consider before booking a holiday rental. Because of the high price of what they’re renting, potential guests won’t trust somewhere, which has a low review count or several unfavorable one. On the other hand, highly positive reviews make your listing appear more reliable. Reviews help sway a potential guest’s decision in your favor. So, find a way to quickly gather feedback and generate reviews for your vacation rental when you first start renting it. And don’t worry about a negative review once in a while. A vacation rental that only has 5-star reviews can look suspicious.
Use channel managers to reach more potential guests
Neill Kramer is the owner of the Ohana Retreat, an upscale holiday rental in exotic Bali, Indonesia. He’s an expat from the US, has been living in Indonesia, and has operated vacation rentals for the last seven years. Here’s a tip he has for new hosts:
To increase your vacancy rate, and your potential income, you have to advertise your vacation rental to as many potential guests as you can. To do this, you’ll want to take advantage of the visibility of all the vacation rental platforms (Airbnb, VRBO, Booking.com, etc.). But to do this manually (ie, on your smartphone) would be a logistical nightmare. When the vacation home books on one site, you’d have to make it unavailable on all the other websites manually or risk a double-booking. As a side-note, double-bookings lead to cancelations, which affects whether your property is shown first in Airbnb. To get around this, you should get a channel manager. The purpose of a channel manager is to have automated control over multiple calendars. When you receive a booking from one site, the channel manager blocks the other calendars automatically, thereby preventing double-booking.
Some software companies sell channel managers separately. But ideally, you should get an integrated suite of products that includes a customer management system, a booking engine, a revenue tracking system, a communications hub that provides for automated messaging, a front office or dashboard, and an upsell platform. Companies like Hostfully offer all this in a Property Management Platform (PMP) bundle. It may seem like an expensive addition to your vacation rental operation (especially if you’re just starting), but trust the income-boosting potential PMPs offer is tremendous.
Develop a process to screen guests and protect your investment
Mackenzie Kearnan is the marketing manager at Autohost, a guest-screening system for short-term and vacation rentals. The intelligent software runs Airbnb background checks and flags risks to reduce parties, property damage and fraudulent activity. Mackenzie is a vacation rental host herself and knows a thing or two about screening potential guests. Here’s her advice on owning a vacation rental home:
The vacation rental industry faces a considerable amount of risk from guests damaging properties. To protect our earnings, investments, and the trust our communities place in vacation rental owners and operators, we have to safeguard our properties from unruly guests. It’s incredibly important to screen guests. If you’re just starting, develop a process for it. Ask questions, verify IDs, and collect security deposits. That way, guest screening will be embedded in your operations. One bad guest has the potential to destroy your reputation and cost you thousands of dollars in property damage. By screening guests in a legal and non-discriminatory way, you can avoid the risk altogether.
Trust yourself and research local competition when setting your nightly rate
Jenny Lovett is a successful vacation rental operator, and the founder of portugalholidays4u, a rental accommodation advertising portal in Portugal. In her spare time, she’s also a regular contributor to French tourism magazines. Jenny has good advice for new hosts when it comes to pricing:
Be careful with your pricing if you use the advice provided by the big services like Airbnb, VRBO, and Booking.com. They’ll recommend a price for your rental when you list your property. But it’s often based on the lowest price available locally, not what your rental is worth. Instead, research your local competition and what they offer for their price. Then check that your rates cover all expenses that give you a return that makes it worth your while. You should also track your vacation rental property’s analytics over time to find any potential revenue-boosting opportunities. Whatever you do, don’t join the race to the bottom. People are always willing to pay for quality.
First impressions matter, even in vacation rentals
Matt Woodley has been a vacation rental host for the past 12 years, with properties in New Zealand and Brazil. Matt’s taken advantage of the major platforms like Airbnb and VRBO to market his vacation rentals. Having been in the industry for so long, Matt focuses on the guest experience. Here’s one tip in owning a vacation rental he offers to new hosts:
Before your guests even set foot in your vacation rental, set yourself up for a 5-star review by making a great first impression. Take time to update your landscaping and ensure the path to the front door is swept clean and free from obstacles. In cold weather, he walkways always have to be shoveled and de-iced. In warm climates, water plants frequently and remove dead greenery immediately. Every few months, wash your windows and check the exterior of the home for any maintenance that might be necessary. And keep in mind that your guests may be arriving after dark; check that there’s ample lighting from their parking spot to the entryway.
Research your HOA, municipal, and state rules and bylaws
Fred Davidson has operated vacation rentals in Montreal for the past five years. Fred invests in new construction condos, which he runs as vacation rentals before converting them to long-term leases. Here’s a tip he offers to hosts who operate vacation rentals in urban areas:
Big cities represent significant earning potentials for vacation rental hosts. Festival season, summer tourists, and conferences are great for boosting your average daily rate for the same operating expenses. But before you buy a condo as an investment (or in any sort of urban home) to operate as a vacation rental, make sure you read every bylaw, rule, and regulation governing vacation rentals in your area. Many new hosts think reading the condo or HOA rules and ordinances is enough. Just don’t forget that your municipality, as well as state (or province), might also have regulations on short-term rentals. Many of these restrictions carry hefty fines for small infractions that can dig into your bottom-line or land you in legal trouble.