Rental Business

The vacation rental industry has never been more alive than it was in 2018. It was the most successful year for the industry as a whole. It may not have been as good for some of the more prominent websites as they would have liked due to new competitors coming in, but as a whole, the industry has grown exponentially. For anyone looking to start a vacation rental business, this is a great time to get into this line of work.


Why Are Vacation Rental Businesses Becoming So Popular?

There are multiple answers to this question, and most shrewd businessmen and businesswomen have capitalised on the property market in places where vacationers and business persons frequent.


Higher Daily Income than Yearly Contracts

One of the main reasons vacation rentals are growing in popularity is because the returns are so high during peak seasons. In places like Queensland New Zealand, vacation rental businesses are booming because this location has summer and winter peak seasons. In the summer vacationers go for water sports, horse riding, and other activities, and in the winter, people go there on skiing trips.

Short term rental prices in a peak season can quadruple the income the owner makes compared to renting the place out on a yearly rental basis. During off-peak seasons, the owner can make the same or slightly more daily than he/she would receive if you divided an annual contract by 365 days.

You can read more about long term versus short term vacation rentals here.

Property Is Usually a Safe Investment

People often start their vacation rental business because they own property or several properties. Other people have cash spare and are looking for a safe investment and property is more often than not an asset that will increase in value in the long run. That said not all areas see property price increases, but very rarely do they lose their value.

As a result, investing in property is generally one of the safest ways to gain a return on your investment. Add the fact that you can make money by renting the property out to people coming to the area on vacation, a vacation rental business is a very safe industry to enter.



The Industry Is Has Low Barriers to Entry

Barriers to entry in the vacation industry have been broken down thanks to the vast number of websites that enable people to list their property as available for short term rent. In the past going up against a large hotel chain or sites like Agoda would have been an expensive proposition for any business owner.

Today websites like Airbnb and HomeAway are now giving people the chance to advertise their property as available for short term rentals. These sites allow people to list their property for free. The vacation rental website does all the marketing and brings in traffic to the website, so there is little to no marketing or advertising budgets needed for vacation rental owners.

As a result, more and more people are starting to invest in property in popular holiday destinations and use these vacation rental websites to gain a return on their investment.

Find out more about barrier to entry here.

You Can Run a Vacation Rental Business Online

Arguably one of the most attractive points to make about vacation rentals is the fact that you do not need an office. If you are listing your property or properties on a vacation rental website and this is where all your bookings are coming from, you effectively have an online business.

Running an online business can give you the freedom to work from any location. There are plenty of vacation rental business owners that run their business virtually.

There are some offline aspects to the business such as managing cleaners and maintenance people that are local to your property. Most vacation rental owners will have the filter or a local person hand the keys over to new guests meaning that the owner does not have to physically be at any of the properties.



How Can I start My Own Vacation Rental Business?

If you own your own property and you are in a good catchment area for tourists or businesses looking to temporarily place their employees, then it is worth researching how much your property could fetch. In some cases, it is cheaper to rent another property every year for you to live in and you can list your property on a vacation rental website and make 4 times the amount you pay for rent.
  • You could also consider selling your property and getting 2 mortgages on 2 different properties if the bank will allow you to do so. You can then rent both out on short term leases and still rent a third place out for yourself.
  • Having a nest egg of money that you want to invest also helps in this industry. You can spend that money into property in an area you can rent your place out to vacationers.
  • There are so many ways you can enter this line of business. However, just make sure that before you do commit any money to open a vacation rental business, take some time to research the industry. Try to make your research unbiased and consider the negatives above the positives. This way you will not get too excited and make the wrong investment.
Importantly, those that are successful vacation rental business owners have made it in this industry because they did their due diligence before getting into the industry. It may sound like a straightforward and easy industry to enter into, and it is in many ways, but you will need time and patience to make sure you are making the right decisions.