Understanding Short Rentals

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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.

Renting vacation rental properties is widely popular among travelers across the world. Besides, websites like Airbnb, Booking.com, and Vrbo help make vacation home rental a simple and stress-free process.

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, Booking.com, and VRBO and do your best to ensure perfect guest experience.

Resources

Need additional guidance? Join the Short-Term Rental & More Academy and let us help you learn how to use real-estate to earn passive income.

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