As the housing market begins to rebound, property owners and investors are eyeing the opportunity to transform properties into short-term vacation rentals. As a host, running a short-term rental can be a rewarding and profitable venture, but their success hinges on a multitude of factors.
In this blog post, we examine what it takes to manage a short-term rental property as a host, and what you should know before diving in.
Location, location, location.
When it comes to location it stands to reason that a beachfront villa or a downtown loft with a buzzing local scene is an obvious moneymaker. But remember, not all travelers are the same. Some might prefer a quiet getaway in the countryside, or an adventurous hiking trip – so don't discount rural or suburban locations straight away! What's more, the exact spot of your property within a popular area can make a world of difference. A city apartment near landmarks or public transport will likely rake in higher rent than one that's off the beaten path.
Bear in mind that many cities have imposed restrictions on short-term rentals or have outlawed them completely. Even within neighborhoods and multi-unit buildings, there may be rules around the length of stay. Before you dive in, take the time to understand the local rules of the STR-rental game.
Get ready to roll up your sleeves.
Despite the glossy image, managing a short-term rental as a host isn't as simple as buying a property, listing it on Airbnb or VRBO, and walking away. Sure, these platforms have made things easier, but they can only take you so far. All of the nitty-gritty of guest interaction, arranging details, and maintenance falls directly on the host.
Picture this: a guest checks out, and you have less than two hours to clean, wash towels, change linens and get the property ready before the next guest arrives. Sounds stressful, right? Well, that's the reality of managing a short-term rental.
Know your return on investment.
As with any investment, a short-term rental needs to pull its weight in terms of return on investment (ROI). There's no magic number for a "good" ROI, as it depends on your individual situation. As a rule of thumb, aim for 15% or higher to ensure that your property is truly profitable.
Here are a few tips to help maximize the benefits and mitigate the challenges of running a short-term vacation rental:
Understand Your Market: Research local rental rates, tourist peaks, and what amenities guests in your area value most.
Automate Where Possible: Use property management software to automate bookings, payments, and even communication with guests.
Prioritize Customer Experience: A well-maintained property, quick communication, and personal touches can lead to positive reviews and repeat guests.
Running a vacation rental property can be a lucrative and rewarding venture if done right. By understanding the pros and cons and utilizing the tips mentioned, you can pave the way for your success in the vacation rental market. Remember, success doesn't come overnight but with persistence and the right strategy, you can make a mark in this industry.
Looking for more actionable information like this for your short-term rental business? Join the Vacation Rental Designers Collective!
Whether you’re an interior designer just getting started in vacation rental design, an investor looking to purchase your 1st or 10th property, a host who dreams to shine amongst the competition in their area, or a Realtor looking for the perfect clients, we’ve got the answers you’ve been searching for.
Powered by a dynamic community of designers, real estate professionals, hosts and property owners with a shared passion for success and profit, the Vacation Rental Designers Collective is more than just a community, it’s a paradigm shift.
Our members range from vacation property owners and investors, to hosts, to interior designers and realtors, each seeking to enhance their business while sharing their expertise and unique skills. You’ll learn how to run a successful vacation rental business while gaining insider insight and innovative strategies, all designed to ensure you maintain coveted five-star reviews.
Become a part of something big. Find your tribe, attract new clients, and watch your business thrive. Join us in redefining the vacation rental industry—one beautifully profitable space at a time.