Plan de negocio apartamentos turisticos

Vacation Rental Business Plan: 15 Steps for Success (Free Template)

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Investing in a vacation rental business isn’t a decision that’s made lightly. There are many factors to consider; however, as the short-term rental industry continues to grow , 2023 could be the perfect time to do so.

The success of any short-term rental business will depend on having actionable goals and clear objectives based on thorough market research, whether you’re a newbie or an experienced property investor.

It’s crucial to create a strategic vacation rental business plan before you hand over a deposit or receive the keys. A viable business and management plan will help you identify the risks and prepare you for the challenges ahead.

Don’t see the form to download our Business Plan? Click here .

In this article, we look at what a business plan is, give you samples and templates to use, and analyze the 15 steps your vacation rental business plan needs to help you get started.

What is a vacation rental business plan?

Simply put, your business plan is an overarching set of rules, goals, and frameworks to help you make decisions for your new business and its future. 

Not only will a vacation rental business plan help you define your strategy, but you can repeatedly refer back to it to ensure you are going in the right direction.

Why do you need a business plan for your vacation rental property?

Vacation rental owners are eager to hit the ground running when they buy their first properties – who wouldn’t be? Any vacancy or downtime on the property means more money that’s coming out of your pocket. A vacation rental business plan will guide you through the initial steps and beyond, helping you maximize your profit and success as a host.  

Beyond just making money, having a good business plan for your vacation rental will allow you to measure success and identify areas for improvement accurately. For example, it will help you focus on key metrics, such as your budget, local market insights, and expansion opportunities.

Vacation Rental Business Plan

What’s the secret to a good short-term rental business plan?

It’s all about timing. Writing a business plan before buying the rental home is advisable, so you can truly judge if it is a worthwhile investment and business venture. Remember that a vacation rental is no small project, so before being strapped with $200,000+ of debt, make sure the ends justify the means by guaranteeing a secure investment through a well-thought-out business plan.

If you want to succeed with your business, we also recommend asking the experts; those who already have a thriving and profitable business in the rental market and those who work daily with rental owners worldwide.

That’s exactly what we did to write this article. We contacted Antonio Bortolotti , Cynthia Chan and Karen Spencer – all professionals in the field who are ready to get you through your business plan.

We asked them a few questions to help you craft the perfect vacation rental business plan template. 

What should my vacation rental business plan include?

Knowing what to include in your strategic plan can be confusing for those venturing into business for the first time.

We want to make things easier for budding vacation rental entrepreneurs, so below, you’ll find the 15 steps to help you succeed.

You can follow this template with sample questions and example answers to make it easier to understand how to create your short-term rental management and business plan.

Step 1. Executive summary

For people outside Fortune 500 companies, writing an ‘executive summary’ can be a bit scary. However, it’s a lot simpler than you may think!

When you go to a bookstore searching for a new book to buy, you usually read the synopsis on the back to get a short, comprehensive idea of what it’s about, right? That’s exactly what an executive summary is.

It’s just a few sentences that summarize your vacation rental business and includes all the essential information you want to get across. This is so that anyone can read the first page of your plan and know, at a glance, what your business entails.

Start by asking yourself the famous five W’s: Who? What? Where? When? Why? This will ensure you include the key details.

Ask yourself the following questions:

Where is my vacation house located?

  • Is it by the beach?
  • Is it in the middle of the city?
  • Is it in the countryside?

What is it?

  • Is it a family vacation home?
  • Is it suited to business travelers ?
  • Is it a glamping accommodation ?

Who is it for?

  • Large groups of friends?

When is it best to stay at my rental?

  • Is it a summer rental?
  • Is it suitable all year round?
  • Is it perfect for winter vacations ?

Why do you have this property?

  • Is this a spare room you’re renting out for extra cash?
  • Is this to top up your pension if you’re retired?
  • Is this your main form of income?

Of course, you do not need to follow this structure, but this will help you outline what information you would like to include in your executive summary, which you can then rewrite to make sure it sounds professional and eye-catching to the reader.

Note: If you are still unsure about the details of your Executive Summary, feel free to do it at the end of your business plan – it’s a case of saving the best until last!

vacation rental business plan

Step 2. Business goals

Your executive summary is going to give you a broad overview of where your business is going, but the goals section will help to further solidify this vision. Goals are what help you to set markers for what success in your business looks like. 

Are you satisfied with a couple of bookings a month, or are you expecting a full reservation calendar by the end of the year? You’ll need to set goals to help pin this down.

It might sound elementary, but it will help your business succeed. 

Is your business goal Smart? Is it Measurable? Attainable? Relevant? Time-based? Setting good goals is the basis for any successful vacation rental business plan.

Step 3. Value proposition

As with any business, you’ll need to state why customers are going to choose your business. It’s difficult to take yourself out of the equation when evaluating your business. After all, you’ve poured your blood, sweat, and tears into this project, so why wouldn’t guests choose you?

No amount of effort is enough if it’s not adding any value to your vacation rental. Consider how your vacation rental will provide a guest experience that the other properties in your area simply can’t provide.

Step 4. Company analysis

In this section, you should aim to explain the Unique Selling Points (USP) of your new vacation rental business, outlining the unique characteristics and offerings it will bring to the existing market.

Ok, but how?

Performing a short analysis of your company and finding your USP is much easier than you think. All it takes is a few simple questions to figure out how you’re different (and better) than other rental properties out there. After all, once you are confident in your strengths, your guests will be, too!

Here are a few examples:

Is it better than others because of its location?

  • Is it close to the beach?
  • Main public transport lines?
  • Is it off-the-grid?

Is the price of your accommodation better?

  • Are you the cheapest accommodation around?
  • Are you the best value?
  • Do you offer discounts at certain times of the year?

Are the interiors of your property different or better than the rest?

  • Do you offer a cozy, rustic getaway?
  • Do you offer a fireplace where a family can sit at night?
  • Is it a themed vacation rental ?

vacation rental property

Step 5. Industry analysis

If you want to be successful in the rental business industry, you’ll need to be strategic and competitive in your company management plan. So, this section is where you state some key facts about current trends and expectations.

One of the ways to do this is by carrying out an industry analysis – this is basically looking at other vacation rental businesses and evaluating them.

This will help you develop a successful business strategy and ensure you’re the owner that comes out on top. After all, knowledge is power!

Here are some sample questions that will help start your industry analysis:

What do vacation rentals near me charge per night?

  • Would you class it as affordable or good value?
  • Is it less than $50 per night? Or Is it more than $300?
  • Think about the figures you come up with in relative terms, weighing up the value of what the business is offering against the price they charge – this will help you start to price competitively.

Who is their target audience and clientele?

  • Are they families?
  • Couples looking for a romantic break?
  • Do they target students and school groups who need large but basic accommodations?

Are they luxury units or more basic rentals?

  • Are they upmarket rentals in the most expensive parts of your area?
  • Or are they modest vacation home rentals that students could afford?
  • Do the rentals tend to fall in one end of the price range, leaving a gap in the market?

Are they self-catered or Bed & Breakfast?

  • Do they offer a light breakfast?
  • Or do they offer a breakfast buffet?

What websites/agencies do they use for bookings and advertisements?

  • Are all your competitors advertising on Airbnb, TripAdvisor, etc.?
  • Do they collaborate with local tourism agencies?
  • Are they all missing out on a popular booking website that only you know about?

“I recommend owners to focus on profit per booking, not occupancy rates. We’re in it to make money, not fill as many nights as possible (that comes next). We could all be 100% full if we undervalued what we were offering. That doesn’t make good business sense. Be prepared to spend more when you first start out, to bring a quality product to the market – you’ll soon reap the rewards mid-term this investment in your future business will bring.” – Karen Spencer

Step 6. Customer analysis

Your customers – or rather, your guests – are how you are going to make your money. That’s why it’s important to understand and target them properly. In your plan, create different buyer personas based on the types of guests you want to attract.

This is like a profile of your ideal customer, from age to income. You should try to make it as detailed as possible because it will help your business grow later.

These buyer personas will be used repeatedly in all aspects of your business to help you achieve more bookings.

vacation rental guests

People say that the customer is always right – but if you truly get to know your customers and what they want, you can ensure that you and your business are always right.

A customer analysis is just getting to know your customers and what they want and need from a rental property and a vacation.

Here are some key questions you should ask yourself about your ideal guest:

What’s their name?

  • This may seem silly to name a fictional person, but it will bring your customer analysis to life and help you imagine the buyer persona.

What do they work as?

  • Is he/she a high-flying banker?
  • Is he/she a medical professional?
  • Is he/she involved with a local school?

What age are they?

Do they have a family?

  • No, they are single.
  • Yes, only one child.
  • Yes, several children.

Keep going with questions like this until you’ve built an entire profile of the person, which will then help you understand their values and spending habits.

Sometimes old cliches can be true – if you fail to prepare, you prepare to fail! Through this, you’ll be able to understand common complaints you will face, likes and dislikes they have in a property rental, and amenities the travelers will expect to find within the property.

Step 7. Competitive analysis

As well as focusing on your business, one element of your vacation rental business plan is conducting competitor research.

Take a look at the market to find your direct competitors and analyze them to see how your business can thrive.

Competitive analysis is similar to industry analysis, but this time you’re going to focus on your immediate competitors rather than the industry as a whole.

For example, if your short-term rental is a house by the beach, your direct competitors would be other accommodation providers on the beach.

With competitive analysis, you want to look at the people who may win a booking over you and use what you find to put yourself on top.

How much are my competitors charging per night?

  • Competitor 1 – $100
  • Competitor 2 – $150
  • Competitor 3 – $200
  • Using this information, you may decide to drop your prices below $100 to become the cheapest option among your competitors and increase your booking rates.

What standard of accommodation do they offer?

  • Are they all standard camping sites?
  • Or are they high-end units?
  • Are they somewhere in between, suitable for most travelers?

Do they offer airport transfers/pick-up service?

  • Yes, but for a very high price.
  • Yes, and for a reasonable price.

Do they offer a wide range of amenities in the house?

  • No, most don’t even offer WiFi.
  • Yes, some offer basic things like a washing machine and television.
  • Yes, all offer basic amenities, and some even include luxury amenities (like a swimming pool or gym).

vacation rental business

Step 8. Operations plan

The operations plan is quite simply, an insight into how you are going to run your new business on a day-to-day basis.

It will consider whether you will hire any staff, what standards you will set, and how you will keep track of inventory and other administrative duties.

This will be one of the most straightforward parts of your business plan; chances are, you already have all of this planned.

Here are a few helpful prompts and examples in case you get stuck:

Am I going to hire any staff?

  • No, I’m only renting out one room in my home, which I can do myself.
  • Yes, I’m renting out several large apartments, and I have a separate, full-time job.
  • No, my partner and I will do the work together.

Who is going to clean the rentals between guests?

  • A cleaning agency?
  • A neighbor?

Do I need to hire an accountant to help me handle the finances of my business?

  • No, I’m comfortable dealing with all of those things.
  • Yes! I don’t know the first place to start when dealing with taxes or business records.

Who will deal with bookings and customer complaints?

  • Myself, with only one room it will be very manageable.
  • I will hire an assistant to help with all of this administration stuff, I won’t have time!
  • My daughter/son, it will be a good part-time job for them to give them an allowance.
  • To keep things simple, you can also use software such as our own Lodgify vacation rental booking system and channel manager tool.

Step 9. Marketing plan

Explain which strategies you have decided will be best to use when targeting your key markets to achieve bookings.

Think about both online and offline marketing, as well as any campaigns or promotions you plan to run externally.

Your marketing plan is just how you’ll advertise your business to customers and how you’ll generate bookings. This is when your buyer persona (which you created earlier) will come in handy.

vacation rental plan

If you know the people you’re trying to target, you’ll know what websites they use and what type of marketing will be suitable for them.

Your marketing strategy can be really diverse and varied. For example, you could use several online marketing strategies like Google Ads and listing your property on different rental websites (or your own !). Still, you can also use offline strategies like leaving flyers or business cards at local tourist attractions.

For example, here are some questions that can help you sketch out your marketing plan:

What methods of online marketing should I use?

  • I will just list my bookings on one travel website because that is enough for me.
  • I will have my own, personal vacation rental website . My site, my rules!
  • I have several properties to rent, so I will list them on several websites to increase traffic and booking numbers.
  • I will pay for Google Ads in my local area.

What methods of offline marketing should I use?

  • None, online marketing will be enough for me.
  • I will print flyers and leave them in local tourist offices.
  • I will give each guest business cards and ask them to recommend me to friends and colleagues.

Do I have a website?

  • No, I don’t want/need to create one.
  • No, but I want one! I need to hire someone to create one for me or try a professional website builder .
  • Yes, I have one, and I’m going to hire a Search Engine Optimization specialist to help me increase the number of visits to it.

Have I got business cards ?

  • No, I don’t need any.
  • Yes, I have some but I won’t use them.
  • Yes, I have some, and I’m going to use them as part of my marketing strategy.

“As all good things, being successful and keeping up with everything takes time, elbow grease, long nights and hard work. But if you have the passion, the clarity and the determination to succeed, you’ll find the formula to make your rental business successful.

While I’m not sure there is a one-formula-fits-all, there are a few things that helped me: a great website, awesome warm-hearted, personal communication skills, finely tweaked standards, procedures and operations, an open mind and willingness to widen your horizon by questioning what you’ve achieved and learning what’s next. Because we are in an ever-changing and challenging world and only those willing to adapt to the changes will survive.” – Antonio Bortolotti

vacation rental business

Step 10. Task delegation and employee management plan

It pays off to dream big, but make sure you have the capacity to do so. How will you manage guest turnover if you’re planning to rent your property every night? Better yet, who will manage guest turnover? Depending on the scale, your goals will take some serious work to get there – make sure you’ve factored in how you will manage it alone or how you plan to delegate tasks.

If you know that you’ll need to hire some staff, be it a property manager, cleaning service , or maintenance person, you’ll have to plan for how you’re going to distribute and delegate the work. Using task management tools and including them in your business plan outline will help you to make the most of your teams’ efforts.

Step 11. Distribution plan

Websites like Airbnb and Vrbo are referred to as OTAs ( Online Travel Agencies ). For all new hosts, presence on OTAs and listing sites to get bookings is essential.

Your distribution plan should consider which channels you’ll be advertising on, how much they’ll cost you, and how you’ll manage them (hint: you might need a channel manager ).

A distribution plan will help you understand how you’re going to advertise your business to generate bookings, and it will help you identify what websites you want to be on to help your visitors find out about and book a stay with you.

Here are some helpful example questions that should get you started writing a distribution plan:

Which OTAs do I want to list my property on?

  • Every OTA that is available? I need lots of bookings!

How much will this cost me?

  • Is it free?
  • Do you have to pay monthly to list on these websites?
  • Do they take a commission off bookings you receive from that website?

Are there any tools available to help me manage all of this?

  • Yes! A channel manager .
  • A channel manager is a tool you can use to ensure all of your bookings, dates and arrangements remain in one place so you don’t get overwhelmed managing calendars from several different OTAs you’re using.

When I do get a booking, how will I receive the payment?

  • PayPal account.
  • Bank transfer.
  • Cash/card payments directly from guests upon arrival.

“If a host’s goal is to maximize their revenue and bookings, it definitely makes sense to list on several platforms. Based on research from one of our partners, Tokeet, they found that some of their hosts had reported a 20% increase in bookings once they used a channel manager to list across several home-sharing sites. I would recommend that if a host is listing across several platforms, they should utilize a channel management program to make it easier to manage their listings and their calendars so they don’t double book.” – Cynthia Chan

Step 12. Revenue management plan

So, this is the numbers part. But don’t worry – revenue management is not as scary as it sounds!

In this section, you’ll have to include information about the rates you plan to charge for your vacation rental, alongside any details about pricing or yield management tools you will use.

When running a vacation rental business, you need to keep on top of your incomings, outgoings and general overall finances.

Vacation rental finance plan

For people who feel overwhelmed by this, there are a lot of tools and software out there to help. To start with, we’ve written some quick questions to cover the basics of your revenue management plan to make sure your accounts and business stay well in the green.

How much will I charge per night?

  • Fixed price: $100 per night
  • I’ll use smart pricing, increasing the amount during busy periods.
  • I’m still undecided.

What level of taxes will I have to pay to the government?

  • I’m not sure – I need to research this before writing my revenue management plan.

What will my utility bills be?

  • Water is $20 a month.
  • Trash collection is $30 a month.
  • Electricity will vary depending on how many guests I’ll have.

What will my staff costs be?

  • Zero, I’m doing all of the work myself.
  • Low, I’m paying my teenage children an allowance to help me with some household chores.
  • High, I’m going to hire a cleaning agency, a marketing specialist, a website developer, etc.

What’s my target monthly income?

  • Anything above $0 at the beginning?

“Set stretching yet realistic prices. Quality holiday homes can charge more (because they are worth more) than an average place. When it comes to setting your prices, you need to know what it costs you to welcome each set of guests and work up from there, ensuring a healthy profit per booking every time. The more you charge per week, the more revenue per booking, yet your changeover costs, your marketing costs, your time spent, will be the same.” – Karen Spencer

Step 13. Financial plan example

Think about how you are going to finance your new business. Of course, you’ve often asked yourself this question, ‘How am I going to afford this rental business?’ Will it be self-financed or are you planning on taking out a loan? Do you have no plan to spend any money because you’re simply renting out a spare bedroom?

These questions form your financial plan . It is just writing out, ‘Well, how am I going to pay for all of this?’ As we all know, money doesn’t grow on trees. Note down your estimates of expenditure and projected income for the first five years.

As with anything in life, proper budgeting and planning your finances will prevent any stress in the future, and it will mean that your business is ready to thrive.

So, what kind of information makes up a financial plan?

Will I need to take out a loan?

  • No, I’m just renting out an existing property with everything ready to go.
  • Yes, I will need a small loan to renovate this property.
  • Yes, I will need a substantial loan to purchase the property/land where I’m going to build my rental.

What will the interest rates be?

Do I have savings I’m ready to invest into it?

  • I don’t want to put my savings into it.
  • Yes, I have a small amount that I’ll use for redecoration.
  • Yes, I have lots of savings that I’ve been keeping for a project like this!

What level of monthly loan payments can I manage?

  • None, my business has small incomings, so I don’t want to take a loan.
  • $100 for a small loan?
  • $750+ for substantial mortgage repayments?

“Sometimes not factoring in the cost of educating yourself is a luxury you can’t afford. The reason I’m part of online communities (I go to industry conferences like VRMA and I put together the Vacation Rental World Summit ) is because I’m the first one to not know everything.

I’m aware that if I want my business to thrive while this industry changes and crashes, I need to stay informed on what’s changing, adjust my strategies accordingly, and be prepared for what’s coming.

So I put together some of the best minds in our industry once a year – this year (2018) on Lake Como, Italy, in October – to enlighten us all on what we should be doing to ensure we have a sustainable and exciting business we keep loving for many years to come. – Antonio Bortolotti

vacation management plan

Step 14. Key milestones and business future:

Write down your plans and goals for your business, plus what key milestones will help you achieve these targets.

When you start any project, whether it is going back to university, losing weight or starting a business, it is really important to track your project and also to track your progress. This section will be useful to refer back to and to ensure you’re on the right track.

After all, if you don’t set any goals, it might be easy to remain where you are.

Here are some good milestones to use for your rental business:

How much do I want to make a month?

  • $500? $750? $3.000?
  • This answer will be linked to your financial plan, so this is a good time to go back and look at what you wrote down in Point 10.

How many guests do I want in the first quarter?

  • As many as possible – I know I’m still in the beginning.

What rate of growth do I want in my bookings year-on-year?

  • I’ll figure this out in the second year, I’m just getting started at the moment.

How many returning clients do I want each year?

  • At least 10?
  • More than 20, I’m confident in the service I provide.
  • As many as possible!

“The biggest hurdle that Airbnb hosts have to get through in their first few years of business is to get enough reviews on their listing so that guests are comfortable staying at your listing. The more reviews you have, the higher your listing appears in the search results as well, so the biggest focus for hosts should be to get as many good reviews as possible.” – Cynthia Chan

Step 15. Vacation rental business plan: Appendix

The appendix in your vacation rental business plan should include all of the relevant documents you have for your business, containing the vital information you need to keep things running.

For example:

What’s the number for a plumber, just in case I have problems with the pipes?

  • Good point, I don’t have one!
  • Yes, I have one, it is 123 456 7890.

Where are my tax registration details?

  • I’m not sure, I’ll need to look for these and then add them to the appendix.
  • I have them, ready to put in the folder.

Have I kept receipts of all of the things purchased for my business recently?

  • Yes, I’m ready to add them to my tax records.
  • No, I will buy a wallet to keep them in for future reference.

Have I backed up my online bookings and calendar somewhere?

  • Yes, on Dropbox and an external hard drive.
  • Yes, but offline, in my calendar in the kitchen.

What should you prioritize in your business plan for vacation rentals?

We know that with so many things to keep in mind for your business plan, it could be hard to focus on the most important ones. There are 15 steps, yet every piece seems crucial; what to do?

Business plan for short term rentals

So we decided to turn to the experts: Antonio, Cynthia, and Karen for their suggestions!

“Looking at the way the industry evolves and its sheer competition, building a clear, easy-to-remember and appealing brand together with setting the infrastructure right is absolutely key. The main backbone of the brand is obviously your own fantastic and inspiring website: your personal Airbnb, your eBay, your Amazon, where you dictate the rules, and no one decides whether you live or die. But it must be productive and efficient. 

This, of course, relies on among many things: carefully laying down a perfectly functioning operational structure, where you put in place automation, standardizations, and procedures to ensure your business runs smoothly even without you being at the desk 24/7. 

Actually, owners do and should operate their businesses with little to no worries. In such a demanding and dynamic industry as ours finding the right combination of software that aligns with your individual business needs is key to accomplishing all this. And it’s not easy. 

This is to keep firm in mind how the ultimate goal is to rely less on third parties for supply of bookings and more on their ability to excel as a way of driving guests and business home.” – Antonio Bortolotti

vacation rental plan

Brand consistency is vital for a business and should be established from the very beginning. A good branding outline in your business plan will keep your vacation rental looking professional.

Rather than emphasizing a particular aspect, Spencer points out the importance of quality throughout the entire business plan: 

“Quality – in everything you do. From the product you bring to the market to the excellent customer service you offer your guests.” – Karen Spencer

It’s going to show if your vacation rental business plan falls short halfway through. You need to maintain high-quality standards and dedication throughout, so it can reflect in your vacation rental and result in happy customers and solid bookings. 

Common mistakes found in short-term rental business plans

For many hosts, owning a vacation rental is their first business venture. With that in mind, many mistakes can be made along the way. Fortunately, we’ve covered you for what to avoid when creating your business plan. Here are some of the most common mistakes that vacation rental owners make with their business plans:

Targeting everyone

Of course, you want to welcome as many guest types as possible, but your vacation rental won’t be everyone’s cup of tea – and that’s okay! If you try to go too broad in targeting guest types, you’ll end up attracting none of them.

Some hosts don’t narrow down their target, and, as a result, their business suffers. Having too generic of a vacation rental will take away from the value you could be adding. Refer back to your value proposition: what extra perk do you want to provide customers? Once you have that,  you can define exactly who those customers will be.

Ignoring the competition

You might think your vacation rental is the best on the block, but keep in mind that your competition feels the same way. Sometimes even the most luxurious vacation rentals are blown out of the water by their competition. 

Rivals can outdo you in price, value, style, and availability! Try to evaluate your competitive edge from every perspective; how can you outdo the other vacation rentals in your area?

Unrealistic finance plan

We all want to make a million dollars in our first year of business, but that’s just not going to happen. One of the most common mistakes you can make is overestimating your revenue while underestimating your budget.

It’s great to think positively about your business and even be encouraged to dream big, but when it comes to money: make sure you’re being realistic.

Assuming standard home insurance covers you

Before you welcome any guests into your home, you’ll want to include vacation rental insurance in your business plan. Standard homeowner insurance will not cover the vast majority of problems that can affect short-term rentals. This is largely due to the increased likelihood of property damage caused by guest parties, misbehavior, and stolen items, making vacation properties high risk.

You’ll want to put in the time to research what policies protect vacation rental owners and which companies provide the best coverage and the best value for your short-term rental business.

vacation rental business management

Scaling your business with a vacation rental property business plan

So, are vacation rental business plans only reserved for newcomers? Of course not! If you’re wanting to restructure your business or scale it, having a new business plan is a great first step. A growing business usually needs a fresh slate, as the old business plan won’t cut it. With a larger business scale, you will need more staff, budget, time, and more. 

Instead of building from your old vacation rental business plan, you might find that creating a new vacation rental business plan will be the best option as you’ll be approaching it with a fresh perspective and more ambitious goals.

Vacation rental business plan: tips & tricks

So, you’ve got a business plan full of really detailed information – great, you’re ready to go! Well, not quite. There are still a couple more things to consider before you put pen to paper and start with your own business plan.

With the industry growing increasingly competitive every day, with more websites opening up and listing your competitors’ rentals, you may be looking for that extra edge.

Here are four of our top tips and tricks to make sure you remain number one!

Enjoy yourself:

  • Ever heard someone say that if you do what you love, you’ll never work a day in your life? This is completely true with vacation rentals.
  • If you enjoy it and don’t let the stress get to you and affect your customer service skills, this will shine through to the guests, and you’ll notice they’ll keep coming back year after year.

You get back what you give out:

  • With vacation rentals or with any business or skill, you will get out what you put in.
  • If you invest time, money and effort into your business, you will reap financial and personal rewards.
  • So many businesses in the tourism industry today simply put in the bare minimum to keep things running.
  • For you to be number one, you need to invest more effort and time than your competitors, and you’ll notice very quickly that this investment has really high returns.

Quality over quantity:

  • Don’t forget that most people will choose value over price, so don’t compromise one for the other.

Get yourself out there:

  • Advertise, advertise, advertise! Really, the more places you advertise your business (your own site, OTAs, social media , etc), the more bookings you’re going to get.
  • It is just a numbers game – the more people who look at your listing, the more guests you’ll have. Simple!

short-term rental business plan

Your vacation rental deserves a proper vacation rental business plan. When you lead with a plan, you’re setting your new business venture up for success. It’s vital to detail every piece of information you can so there are no surprises when it comes to competition, operations, budget, and everything in between.

Even though your guests won’t see your business plan, implementing one makes sure your business runs smoothly and professionally, which helps contribute to the overall guest experience. We’ve even done the hard part by creating a vacation rental business plan template, so all you have to do is plug in your details, and you’re ready to move forward!

Download our free vacation rental business plan template

Don’t know where to start? Don’t worry! All you have to do is download our free vacation rental business plan template below and fill in your own information. Our handy guide includes all of the questions you need to ask yourself before starting your new venture.

Contributing authors

We’ve consulted with the experts to make the best outline possible for your business to help you reach your goals. You can learn more about who Antonio, Cynthia and Karen are, when they started working in the holiday rental market and what they usually do to help rental owners like you to develop their business.

Antonio Bortolotti :

“I’m a property owner with a multi-property in Sardinia and I ventured into holiday rentals as a way of building myself an alternative to my previous life working for Alitalia.

My wife Cristina and I stumbled upon the ruins of an old house in Sardinia and it was love at first sight. We purchased part of it and renovated it; we rented it out to pay the mortgage and hopefully make some money. Fast forward 3 years later and we now own the entire villa with 3 units and I quit my job to focus full time on vacation rentals. 

Meanwhile, I was invited to speak on stage at industry events to share how I turned rubbles to such great success – our units were outperforming all other rentals in the area by 4 times in terms of occupancy and duration of the season. I began sharing my know-how with my peers, and that led to hosting what’s become the Vacation Rental World Summit; an event that’s helped over 16,000 property owners and property managers in 50 countries since its first edition.

As a matter of fact, I want to thank you for asking me to respond to your questions by sharing with your readers the recording of Lodgify’s session on the principles of good web design that your very own Dennis Klett shared with us at the Vacation Rental World Summit edition held in Barcelona two years ago. While time goes by, certain things and principles never age.

Cynthia Chan :

“I’m Cynthia, and I’m one of the co-founders of Airhosts Forum . We’re the largest Airbnb host forum online, and we also have the largest Facebook page for Airbnb hosts.

We decided to start a forum so that we could get more information on how to be better hosts and also to help others who were in the same boat as us. Because there is such a need for a community where hosts can come together to share ideas, get tips and advice, and even just vent about their experiences, we quickly grew the community to the #1 Airbnb forum for hosts to come and discuss anything they wanted with other hosts.

We post reviews, useful tips for communicating with guests, information on Airbnb policies, insurance questions and much more, all with the aim of ensuring our members are kept up to date with all they need to know about Airbnb and hosting.”

Karen Spencer :

“I’m Karen Spencer, founder of The Business of Holiday Rental , and I help holiday homeowners to create a quality holiday home, to run it as a business, maximize their income and love what they do.

I’m a holiday cottage owner myself.  I’ve worked for a holiday letting agency and have 10 years of experience in the self-catering industry, I’m a home stager and a formal departmental coach.

Combine all that industry knowledge, holiday home business know-how, corporate experience and training, and you get The Business of Holiday Rental. I can help you in group programs, working one to one, or in my off-the-shelf classes.”

Hi, Amazing article to learn from basics to advanced in vacation rental business. Thanks for sharing this wonderful article with us.

Fantastic article Jess as always. Even though we’re on our 2nd property and they both are doing well we are going to go back and go through the steps in the business plan. I bet it will help us refine our ideas for moving forward. Thanks again!

Well… consider yourself added to my blogroll. I have like six other blogs I read on a weekly basis, guess that number just increased to seven! Keep writing!

What kind of insurance is available?

Hi Dorothy,

I suggest you check out our article about the different types of vacation rental insurance available. You’ll find it here .

Riley & The Lodgify Team

Thanks for sharing this useful information! Hope that you will continue with the kind of stuff you are doing.

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The Complete Vacation Rental Business Plan (+ Template)

The Complete Vacation Rental Business Plan (+Template)

No spam. Only valuable tips on how to grow your business. We promise.

What’s in this article?

Creating a vacation rental business plan isn’t just about securing financing or finding properties to manage; it’s also about having a roadmap for business growth. 

Business plans anticipate possible mishaps so that you can prepare for them in advance. They also let you set milestones to guide your business development. Finally, vacation rental business plans can help you secure financing to fuel your business’ growth.

A business plan takes time and it can be intimidating to know where to start, but it doesn’t have to be. If you’re wondering where to begin or what to include, we’ve got your back! Using this comprehensive guide, you can develop a vacation rental business plan using the downloadable template provided. 

Click to download (It’s free!)

Vacation rental business plan template.

  • I consent to receive marketing communications from Hostfully and agree to the Privacy Policy .

What is a vacation rental business plan?

A vacation rental business plan describes the steps to reach your financial, marketing, and business goals . It should assist you and potential investors in understanding your short-term rental business’s profitability. 

Along with describing the goals, strategy, and tactics, you should also use this plan as a guide to ensure you’re headed in the right direction.

Why do you need a vacation rental business plan?

A vacation rental business plan prepares you for the future as it anticipates goals, milestones, and possible mishaps. But a vacation rental business plan can also help you secure financing, plan for the long term, set clear goals that increase your chance of success, and budget sensibly.

1. Secure financing

Just like you wouldn’t lend your car to a friend who doesn’t know how to drive; banks won’t lend you money if you can’t prove that you’ll pay them back. 

A vacation rental business plan is a way of letting potential investors know that you have a strategy in place to build a profitable business. 

2. Plan for the long term

Planning for business growth allows you to choose tools and systems from the beginning that will scale with you. For example, without long-term planning, you might end up having to change your property management system (PMS) in the future as the needs of your business outstrip the feature set of the cheap solution you chose without future growth in mind. Being able to plan for what you’ll need as you grow will ultimately save you time and money.

3. Set clear goals

It’s easier to achieve success if you first define what success looks like and give yourself clear goals to work towards. These goals should be measurable and achievable, for instance, establishing you need a 60% occupancy rate in your first year to cover costs. If you’re succeeding in meeting some of your goals but falling short when it comes to others, you’ll be able to identify where you need to make changes in your business.

4. Budget with confidence

Running the numbers and having a plan that backs up your vacation rental property investment reduces the luck element of buying real estate. Having a business plan with financial projections allows you to allocate a realistic budget for renovations, furnishing, decoration, software, permits, and staff.

A business plan will help you anticipate cash flow issues you may face. For example, as your reputation builds, your property may have fewer bookings at first, so some expenses will be out of pocket. 

What to consider before creating a business plan for your short-term rental business

Before you start writing your business plan for your STR business, you should: 

1. Do your research

Make sure you research to understand local laws, the challenges presented by the location of your properties, and the types of units you’re going to be investing in.

Review local laws, regulations, or restrictions before buying a second property or turning your home into a short-term rental business . 

You should also look into what’s being discussed in the media about the market you’re researching. There may not be a law yet, but there are rumors that vacation rentals will be prohibited and you should know about it. 

Location can also determine your rental’s profitability. If you buy or manage a vacation property in an up-and-coming location, or a place that has a nearby attraction, your place might be in high demand. Location is also important when looking for possible cleaners or maintenance workers. A cabin in the woods sounds nice until no one wants to drive there to clean it or fix a broken pipe. 

Type of unit

You should look at the market to understand which types of units you should be managing and what challenges they present, as well as how profitable they might be. You can rent nearly anything:

  • Tree houses
  • Glamping domes and yurts
  • Apartments of different sizes
  • Family homes
  • A night in a Tesla parked in your garage ( yes, really )

Compare existing listings against similar units in your location to get an idea about how much guests are willing to pay to stay in them, how much demand exists in your area, and what amenities will set you apart from the rest.

Furnishing and renovations

Determine how much money and time you’ll need to renovate and furnish your unit. Find out what sort of amenities are expected in your area and what extra things you could invest in to give yourself a competitive advantage.

2. Choose your business model

If you’re buying properties to rent rather than simply managing properties on behalf of owners, there are several different business models to consider:

  • House Hacking. If you’re accessing a loan for buying your primary home, you might get to invest less money but you’ll need to use the property as your home. In that case, you can use house hacking to rent your guest room or your studio to reduce the mortgage out-of-pocket payments. 
  • Glamping. Some countries offer loans for purchasing glamping domes or yurts. It’s also less expensive than purchasing a property and it can be quite profitable. You can rent your dome or yurt from $150-400 a night.
  • Rent your property. If you take out a loan for a vacation home , you can rent the property to pay for the mortgage and make a profit.  
  • Rental arbitrage. This STR business model requires almost no initial investment from your end other than the costs related to renting an apartment. In the rental arbitrage model, you sublet an apartment on Airbnb , Vrbo , or any other OTA to pay for rent and make a profit. Your landlord should be notified and give you written consent if they approve.

3. Consider financing options

Your vacation rental business plan is also a way to pitch your company to potential investors. If you’re about to start a property management company , creating a business plan is a great way to formalize it. 

Depending on your business model , you’ll have access to different financing options that have very different initial payment rates. When you know how much money you can invest upfront and who your target investors are, you can tailor your vacation rental business plan accordingly.

4. Determine profitability

Before you buy or agree to manage any rental property, you should run a competitive analysis to determine if it’s going to be profitable. You can use tools like Vrolio or AirDNA to estimate expenses, nightly rates, and estimated occupancy. Make sure you run your calculations on cautious scenarios. Never estimate 100% of occupancy. If it’s your first STR, estimate vacancy at around 45-50% . 

Even Rob Abasolo from Robuilt who has various successful STR properties doesn’t run estimates assuming a perfect year. “I wouldn’t calculate my numbers based on a 100% occupancy rate ,” Abasolo shared. “When I’m running the numbers to see if a deal works, I’m typically running my calculations at an 80% occupancy rate .”

What to include in your short-term rental business plan?

Your business plan is a living guide that contains all your goals for your business and how you plan to achieve them. That’s why it contains goals, milestones , and an initial financial forecast. It’s an outline of what you’re planning to do, why you’re doing it, and how you’re going to succeed. You can present this as a one-pager or a longer form shareable document.

1. Executive summary

This section is an overview of your business, you should mention:

  • Who you or the property owners are
  • The skills you excel at
  • Your experience in the business
  • Your short and long-term objectives 
  • The location of your vacation rental (mention nearby attractions)
  • Your business model (house hack, glamping, second home, or rental arbitrage)
  • A broad description of your guest persona  
  • If it’s a seasonal rental, for example, a beach house for summer

2. Company description

In this section, you should get into more detail about your company. Talk about your mission statement, unique selling point ( USP ), and value proposition (more on this later!)

If this is your first investment property, create those statements and include them here. You can adjust future plans as your business grows. 

3. Business goals 

The first two sections of the business plan give readers a broad overview of where your business is headed. Here is where you get to explain in detail what you’re aiming to achieve with your vacation rental. 

You can follow any goal-setting methodology that you prefer—S.M.A.R.T, H.A.R.D, or W.O.O.P. The important thing is that you set objectives for different aspects of your business. Answer the questions below to get some ideas: 

  • What’s your minimum acceptable CoC return? 
  • What’s the minimum occupancy rate you need to meet your expenses?
  • What’s your expected monthly profit? 
  • What percentage of your total revenue goes into operations and expenses?
  • Do you need to hire a team? If so, how will you rate their performance?
  • What are the tools that you need to learn how to use?
  • What aspects of your business can be automated?
  • How are you planning to improve the guest experience?
  • Are your listings SEO optimized? How are you measuring success?
  • Will you promote using a mix of niche and popular OTAs ? 
  • What’s your plan to increase direct bookings?
  • Are you using social media to promote your listing?

4. Guests personas

A huge part of marketing your property is defining who you are talking to. Do you want your property to be used by families, expats, digital nomads, or college students?

Defining your guest persona allows you to determine your value proposition , unique selling points , and marketing strategy . Include their:

  • Demographics
  • Motivations
  • Behavioral characteristics
  • Booking habits
  • Preferred OTA

If you have a pet-friendly property and you want to attract dog owners, then, your marketing strategy will be more successful if you promote on niche listings like BringFido along with global listing sites.

5. Value proposition  

Your value proposition is how your guests will perceive your property compared to others. Why should guests choose your property? What’s your added value? 

Maybe you offer flexible check-in or you offer a discount to the local museum. Define how you’re improving the guest experience and write it down, that’s your value proposition . 

6. Competitive analysis 

Analyze your competitors and the industry to determine what makes your property different from others and how you can position that difference as a unique selling point ( USP ). This is different from your value prop. Your USP is how you’ll differentiate your property and listing when you’re selling it; the value proposition is how you’ll improve the overall guest experience. 

For example, let’s say you bought soundproof windows and a memory foam mattress that guaranteed a good night’s sleep, that’d be your value proposition. If you offer one free night to guests who book a three-day stay, it becomes your unique selling point.

You can use tools like Zillow and AirDNA to look into your local competitors and ask yourself if your property is better than other competitors because you:

  • Is it easier to access using public transportation?
  • Is it closer to the beach or the main city attraction?
  • Is it downtown?
  • Is the price -value ratio better than the competition?
  • Does it have discounted rates on certain days of the week?
  • Does it have better amenities? 
  • Does it look clean and new?
  • Does it have a copy that converts?
  • Is the description clear?
  • Does it have professional photography?

You should also define which listing sites your competition is using and see if there’s any room for improvement. 

7. Operations and teams  

Your operation plan is a rundown of how you’ll operate your business, how much it’ll cost, and which tools you’ll use. Some tasks you should outline include:

  • How are you going to account for everything that’s in your property? 
  • How are you planning to restock the lost or broken items? 
  • How many times a year will you do an inventory check?
  • Are you hiring a team to work full-time on your property? 
  • Did you already hire a cleaning and maintenance agency?
  • Are you managing your Airbnb using software ? 
  • How are you managing different channels and distribution? 
  • Are you outsourcing your operations to a property management platform like Hostfully? 
  • Do you have a tool to keep track of your accounting? 
  • Are you hiring someone to do it for you? 
  • How are you keeping track of your escrow, insurance, and taxes payments?
  • Are you adding smart keyless locks, plugs, and lightbulbs to save time and power? 
  • How are you communicating with your guests? 
  • Are you building any automations ? 
  • Are you using a vacation rental management platform like Hostfully to automate guest messaging?

8. Expenses

List all of your fixed and variable costs including:

  • Mortgage payments
  • Staff members (if any)
  • Hospitality tools like property management system, channel manager , and dynamic pricing
  • Utility bills (water, power, internet)
  • Credit card installments for furnish 
  • Taxes and insurance

You should have that information from your research stage and your profitability analysis. Then, based on your total expenses, you determine the minimum and maximum nightly rates that you’re able to offer based on a safe estimated occupancy rate . 

So, let’s say your expenses are $2,300 a month and you’re estimating a 60% occupancy rate . That means that you’re expecting your property is booked for at least 18 days each month. That makes the minimum nightly rate $128. If you compare against similar properties and your rate is too high, you should look into a different market, see where to cut expenses, or offer a premium experience.

9. Pricing and revenue management

There are tools like Vrolio that allow you to define your base nightly rate based on your expenses and your competitors automatically. A good tip is to launch your property with a low nightly rate to get eyeballs on your property, get momentum, and start collecting reviews.

Having a pricing strategy for your vacation rental lets you start with a low nightly rate and once you have a set of positive reviews that make your listing more accurate, you can start adjusting your prices . A great way to ensure your prices are adjusted to match demand is by using a dynamic pricing tool. If you’re using Hostfully as your property management software, you can do revenue management from the same platform due to our integrations with: 

  • NightPricer

10. Financial plan for growth and scaling

This is the section that investors really want to see. It’s what determines if your STR business is a good investment. If this document is for personal use, this section is still crucial for defining milestones and keeping track of possible cash flow issues. 

You should tell your previous history by managing your personal or business finances. At this point you need to answer these questions:

  • Are you taking out a loan? What’s the interest rate? Is it fixed or variable?
  • Do you have savings?
  • Are you splitting the costs with someone else?
  • What’s your expected yearly ROI?
  • What’s your expected CoC return?
  • What’s your cash flow forecast?
  • What’s your expected monthly income after expenses?
  • What’s your loss projection?
  • What are the yearly milestones that you expect your business to reach?
  • Did you do a cost analysis?

11. Marketing and distribution

Just like you would with any other business, you should think about marketing your property. For vacation rental businesses, marketing and distribution go hand-in-hand. Each listing site or online travel agency ( OTA ) has its own audience. For example, Vrbo is targeted at families, while Airbnb is more suited for millennials and freelance business travelers . 

For your marketing plan you should answer the following questions:

  • Where does your guest persona search when looking for a place to stay?
  • Does your guest persona plan trips based on location or based on the property? (For example, are your guests staying at your place due to location? Or because you have a cool property?)
  • Which online marketing channels are you using? Paid ads, social media , SEO ?
  • Are you listing in niche and global OTAs ? Which ones?
  • Is your listing copy snappy and inviting?

12. Appendix 

Every business plan should contain an appendix. Here’s where you should add any relevant documents, graphs, calculations, and pictures. You can also include additional information that supports your background or business experience.

Common mistakes to avoid when creating a short-term rental business plan

Whenever you’re writing a business plan for your STR, you should beware of these common mistakes and try to avoid them:

Under budgeting

It’s common to allocate less money than needed to:

  • Pay for software like a PMS, channel manager , and dynamic pricing tool
  • Staff (if you have any)
  • Furnishing and decorating your property
  • Renovations if you buy a fixer-upper

Targeting everyone

It’s common to think that if you target everyone you’ll get more eyeballs on your listing and that will translate into bookings. That might happen once or twice, but if your potential guest can’t relate to your listing description they’re not going to book it. Targeting your listing to your guest personas and promoting your property in the right distribution channels is a more effective use of your time and money.

Underestimating competition

Everyone thinks that their property is better, prettier, and more comfortable than the others. It’s a common mistake to underestimate the competition. Doing a thorough competitor analysis is a good way to prevent this.

Unattainable financial goals

Short-term rental businesses are often profitable, but they’re not magical. Make sure the goals you’re setting for your business in the financial plan are attainable and realistic. For example, make estimates based on your least expensive nightly rate and the minimum needed occupancy rate . 

Do you need a vacation rental business plan? 

Whether you’re financing or using your savings to pay for your vacation rental property , you need to make a business plan to forecast growth. Your business plan should include: 

  • Executive summary and company description
  • Business, financial, operation, marketing plan, and goals
  • Guest personas and value proposition
  • Competitive analysis of your competitors and the industry
  • Expenses, pricing , and revenue management
  • Appendix for additional information

If you’re planning to automate parts of your business, consider incorporating Hostfully into your operations plan . We’re a vacation rental software that lets you automate your day-to-day admin tasks, manage different channels, and do dynamic pricing all in one place.

Frequently asked questions about vacation rental business plans

Do i need a vacation rental business plan.

You need a vacation rental business plan to outline your business milestones and goals. This document will be your guide in terms of how to manage your STR marketing, operations, and finances. 

Having a vacation rental business plan helps you anticipate cash flow issues and see progress toward financial goals.

What does a vacation rental business plan include?

A vacation rental business plan includes twelve different sections to outline your strategy and tactics to make your business profitable. These sections are:

  • About section or executive summary
  • Company description
  • Business goals
  • Guest personas
  • Value proposition
  • Competitive analysis
  • Operations and teams
  • P ricing and revenue management
  • Financial plan for growth
  • Marketing and distribution
  • Press & Podcasts
  • Affiliates & Referrals
  • Partner Promotions
  • Customer Support
  • Testimonials
  • API Documentation

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10 straightforward steps to start a vacation rental business

Jeff Rohde

The average revenue from short-term rental properties (STRs) listed full time grew to $56,000 at the end of last year, marking the highest level ever. According to AirDNA , a rental analytics company that tracks the data of 10 million Airbnb and vacation rentals by owner, the number of listings is expected to grow by 15% this year as more investors enter the STR business.

Investors thinking about entering the space may find this year to be the ideal time to start a vacation rental business. In this article, we’ll look at the benefits of renting on vacation rental sites, then explain how to start a vacation rental business in 10 steps.

Key takeaways

  • Benefits of starting a vacation rental business include increased gross revenues, increased control over a property rented to short-term guests, and numerous tax benefits that come with owning a vacation rental.
  • To form a vacation rental business, investors should create a business plan, research the best vacation rental markets, and analyze potential returns.
  • Before starting a vacation rental business, learn the local laws, understand the market, and create a guest profile to determine the right pricing and amenities.

Benefits of a vacation rental business

There are a variety of benefits to having a vacation rental business compared to a traditional long-term rental:

  • Greater potential for gross revenue: According to AirDNA, the average rate for an STR is about $250 per night.
  • Opportunity to generate income from additional services such as local tours, event hosting, transportation, cleaning, and laundry.
  • Increased control over the property: Because guests turn over much more frequently, a host can adjust rent rates as needed and perform maintenance more often.
  • Ability for a vacation rental host to build a guest network and develop a repeat visitor list.
  • Tax advantages: Write-offs and deductions from rental income include management and leasing fees, maintenance and repairs, utilities and supplies, property taxes and insurance, and mortgage interest.

Of course, there are potential drawbacks. There’s a lot of competition due to growing demand for STRs, operating expenses can be higher due to utility and guest expenses, and hosts must comply with vacation rental listing site regulations and local and state housing laws.

How to start a vacation rental business in 10 steps

There are many reasons to start a vacation rental business. Some investors are tired of working 9 to 5, others want more control over their earning potential and lifestyle, and some are simply looking to ease into early retirement.

No matter the motivation, the process for starting a successful STR business follows the same general steps:

1. Create a business plan

Hosts should consider their motivations, values, goals, and operations. Then, put together a comprehensive business plan and budget. Consider factors such as:

  • Personal income projections to ensure that extra cash is available to keep a vacation rental business afloat during slow periods
  • Start-up costs, such as the down payment if the property is financed, business licensing fees, and furnishing and decorating
  • Cash reserves for quickly taking care of unexpected repair issues
  • Operating expenses, such as host booking fees paid to listing sites, the monthly mortgage on an STR property, taxes and insurance, utilities, supplies for guests, and property management fees

2. Find the best STR markets

Good vacation rental businesses can be found in markets with tourist activities and attractions, business hubs, or a combination. Although larger cities are often the first choice for long-term rentals, the best places for vacation rentals can be completely different. 

As a recent report from Realtor.com revealed, many of the best places to buy a vacation rental are within a day’s drive or less of major metropolitan areas:

  • Joshua Tree, CA
  • Lincoln City, OR
  • St. George, UT
  • Fredericksburg, TX

3. Research the local laws

Review the zoning laws in your desired market.

Some municipalities and homeowner associations (HOAs) may limit the number of guests that can be hosted, require a minimum number of nights, or prohibit STRs altogether. That’s because the soaring demand for long-term rental property, combined with booming demand for STRs, has prompted some cities to restrict the spread of STRs in an effort to provide sufficient housing for residents. 

As a rule of thumb, tourist towns like Incline Village, CA, and Blue Ridge, GA, and, generally welcome investors with vacation rental businesses.

4. Look for STR properties for sale

Websites like Zillow and Realtor.com, local real estate agents with access to the MLS, and local real estate investment clubs can be good ways to look for an STR property for sale. However, turning a home into an STR requires spending a lot of money on furniture and decoration, and you won’t have an existing customer list.

That’s why the Roofstock STR Marketplace can be the ideal place to look for an STR property for sale. Single-family vacation homes and condos are listed for sale in popular vacation rental markets.

5. Analyze potential returns from a vacation rental

Income from a vacation rental business should be measured using gross annual revenue, average daily rate (ADR), and revenue per available room (RevPAR):

  • Gross annual revenue is the total income generated during a specific time period, such as monthly or annually.
  • ADR is calculated by dividing gross annual revenue by the number of days a vacation rental was booked.
  • RevPAR is determined by dividing gross annual revenue by the number of days a vacation rental was available.

Vacation rentals have the same operating expenses that long-term rentals do, but they also have extra costs to consider:

  • Booking fees paid to listing sites, typically a flat service fee of 3% of the booking subtotal
  • Supplies such as towels, linens, toiletries, kitchen basics, and guest welcome gifts
  • Utilities including electric, water, gas, cable, and internet
  • Increased cleaning and maintenance costs due to guests frequently coming and going

6. Purchase a STR property

With STRs listed for sale on Roofstock , the entire purchase transaction can be done completely online—from making an offer to negotiating a deal to performing due diligence to closing escrow. 

The Roofstock team guides buyers and sellers through the entire transaction and can even provide referrals for financing and local property managers who specialize in STR properties.

7. Form a business entity

While it’s possible to own a vacation rental business under a personal name as a sole proprietor, many real estate investors choose to form a legal business entity, such as a limited liability company (LLC). 

Holding a vacation rental under an LLC is a good way to separate personal assets from business assets and may also provide an extra layer of liability protection. Investors with multiple vacation rental businesses may wish to consider forming an LLC for each individual STR, then combine them under one umbrella LLC. 

8. Obtain licenses, permits, bank account, and insurance

The city, county, and state in which a vacation rental business is located may require a business license to operate and another license to collect and remit occupancy tax from guests. Many investors also open up business banking and credit card accounts to avoid commingling personal and business expenses.

While listing sites like Airbnb and Vrbo provide hosts with liability insurance of up to $1 million, investors may wish to speak with an insurance agent or broker about acquiring additional coverage for an STR property. In many cases, a special homesharing insurance endorsement can be added to an existing insurance policy to provide an additional layer of protection.

9. Create a listing on sites like Airbnb, Vrbo, and Vacasa

A great listing can mean the difference between a profitable vacation rental that’s consistently booked and one that barely breaks even. This Resource Center offers tips for setting up a successful listing:

  • Write a catchy title.
  • Create an honest and detailed listing description.
  • Take great listing photos.
  • Make sure the calendar and reservation booking settings are correct.
  • Set a pricing strategy to help you increase earnings.
  • Consider using Instant Book to streamline the booking process.
  • Write helpful house rules and choose the right cancellation policy.
  • Think like a potential guest by adding extra amenities and creating a guidebook with local tips.
  • Read other listings for inspiration.

10. Keep track of income and expenses

While listing sites often report guest revenues from bookings, it doesn’t provide an accounting solution for vacation rental businesses. That’s why many investors choose free STR software from Stessa , a Roofstock company, to automatically track income and expenses for a vacation rental business. 

Property performance can be monitored in real time using the online owner’s dashboard, financial reports can be generated at the push of a button, and real estate documents can be stored online. When tax season rolls around, vacation rental owners can use Stessa to export tax-ready statements.

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Jeff has over 25 years of experience in all segments of the real estate industry including investing, brokerage, residential, commercial, and property management. While his real estate business runs on autopilot, he writes articles to help other investors grow and manage their real estate portfolios.

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Vacation Rental Business Plan Template

Written by Dave Lavinsky

vacation rental business plan

Vacation Rental Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their vacation rental companies.

If you’re unfamiliar with creating a vacation rental business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a vacation rental business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your vacation rental business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start a vacation rental business or grow your existing vacation rental company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your vacation rental business to improve your chances of success. Your vacation rental business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Vacation Rental Businesses

With regards to funding, the main sources of funding for a vacation rental business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for vacation rental companies.

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How to write a business plan for a vacation rental business.

If you want to start a vacation rental business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your vacation rental business plan.

Executive Summary

Your executive summary provides an introduction to your vacation rental property business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of vacation rental business you are running and the status. For example, are you a startup, do you have a vacation rental business that you would like to grow, or are you operating a chain of vacation rental businesses?

Next, provide an overview of each of the subsequent sections of your plan.

  • Give a brief overview of the vacation rental industry.
  • Discuss the type of vacation rental business you are operating.
  • Detail your direct competitors. Give an overview of your target customers.
  • Provide a snapshot of your marketing strategy. Identify the key members of your team.
  • Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of vacation rental business you are operating.

For example, you might specialize in one of the following types of vacation rental businesses:

  • AirBnB rentals: This type of business uses a platform such as AirBnB to market and rent out their vacation home properties.
  • Luxury rentals: This type of business specializes in high-end vacation rentals of homes, condos, or villas.
  • Beach house rentals: This type of business rents houses or condos for popular tourist destinations along the beach.
  • Cabin rentals: This type of business specializes in renting out cabins for tourists going camping, skiing, or looking for a more secluded getaway.

In addition to explaining the type of vacation rental business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

  • When and why did you start the business?
  • What milestones have you achieved to date? Milestones could include the number of clients served, the number of rentals booked, reaching $X amount in revenue, etc.
  • Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the vacation rental industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the vacation rental industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your vacation rental business plan:

  • How big is the vacation rental industry (in dollars)?
  • Is the market declining or increasing?
  • Who are the key competitors in the market?
  • Who are the key suppliers in the market?
  • What trends are affecting the industry?
  • What is the industry’s growth forecast over the next 5 – 10 years?
  • What is the relevant market size? That is, how big is the potential target market for your vacation rental business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your vacation rental business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, schools, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of vacation rental business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other vacation rental businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes other options for vacationers such as hotels, resorts, and RV parks. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

  • What types of customers do they serve?
  • What type of vacation rental business are they?
  • What is their pricing (premium, low, etc.)?
  • What are they good at?
  • What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

  • Will you make it easier for customers to book your rentals?
  • Will you offer products or services that your competition doesn’t?
  • Will you provide better customer service?
  • Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a vacation rental business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of vacation rental company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide amenities with your rentals such as food service, transportation, or housekeeping services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your vacation rental company. Document where your company is situated and mention how the site will impact your success. For example, is your vacation rental business located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your vacation rental marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

  • Advertise in local papers, radio stations and/or magazines
  • Reach out to websites
  • Distribute flyers
  • Engage in email marketing
  • Advertise on social media platforms
  • Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your vacation rental business, including answering calls, booking rentals, billing clients and collecting payments, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth rental, or when you hope to reach $X in revenue. It could also be when you expect to expand your vacation rental business to a new city.  

Management Team

To demonstrate your vacation rental business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing vacation rental businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a vacation rental business.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you keep an inventory of 10 vacation rental homes, and will you charge higher prices during peak seasons? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your vacation rental business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a vacation rental business:

  • Cost of equipment and office supplies
  • Payroll or salaries paid to staff
  • Business insurance
  • Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of amenities and tourist attractions near your rentals.  

Writing a business plan for your vacation rental business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the vacation rental industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful vacation rental business.  

Vacation Rental Business Plan FAQs

What is the easiest way to complete my vacation rental business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your vacation rental business plan (or short term rental business plan).

How Do You Start a Vacation Rental Business?

Starting a vacation rental business is easy with these 14 steps:

  • Choose the Name for Your Vacation Rental Business
  • Create Your Vacation Rental Business Plan
  • Choose the Legal Structure for Your Vacation Rental Business
  • Secure Startup Funding for Vacation Rental Business (If Needed)
  • Secure a Location for Your Business
  • Register Your Vacation Rental Business with the IRS
  • Open a Business Bank Account
  • Get a Business Credit Card
  • Get the Required Business Licenses and Permits
  • Get Business Insurance for Your Vacation Rental Business
  • Buy or Lease the Right Vacation Rental Business Equipment
  • Develop Your Vacation Rental Business Marketing Materials
  • Purchase and Setup the Software Needed to Run Your Vacation Rental Business
  • Open for Business

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How to start a vacation rental business

By Nechama Rausman | Updated: March 05, 2023

vacation property business plan

Considering starting a vacation rental business? If so, it’s important to do your research beforehand to make sure you are set up to succeed. First, you need to look at the current state of the industry to establish reasonable goals to formulate your plan. So we will start with a look at the most recent industry forecast.

starting_a_vacation_rental

Over the past few years, the short-term and vacation rental industry has seen significant gains in demand and the length of guests’ stay, contributing to an average overall increase in revenue for hosts and property managers. Yet it has also reached all-time highs in the number of listings on the market, making competition fierce. 

Most projections see a continued increase in the supply, demand and total revenue for the short-term rental industry, Predictions for the industry are expected to reach $96.85bn in revenue in 2023 and to continue to rise on target with an annual growth rate of 2.69% ( Statista ).

Under the right circumstances, a short-term rental business can become a relatively passive stream of income, but these results don’t come from simply purchasing a property or two and listing them on Airbnb. 

Running a successful vacation rental business requires a business plan, marketing and a financial strategy. It requires research, planning, financial investment and significant time and commitment. It also requires a number of tools that allow you to run your rentals effectively and to grow them into a thriving business – at whichever scale you hope to achieve.

In this article we will cover the basics of how to start a vacation rental business:

  • Researching and planning your vacation rental business
  • Options for investing in your short-term rental property
  • Designing, renting out and maintaining your property 
  • Insights into tools that help you run and scale your business effectively. 

Let’s start with the basics.

How to starts a vacation rental business

What is a vacation rental business?

Short-term rentals (STRs) refer to private properties that are rented out for short-term use (typically from a number of days to weeks). They may be used by travelers, business professionals, nomadic workers or anyone looking to relocate temporarily.  Short-term or vacation rentals differ from hotels in that they generally offer more facilities (ie. kitchens, appliances, private outdoor areas etc.), more privacy, and sometimes greater access to authentic, local culture or a unique lodging experience. 

A short-term rental business involves acquiring, maintaining, marketing and renting out these properties to guests. Running a vacation rental business may mean that you own your own properties or that you rent and manage the properties for the owner. A short-term rental business can be specifically focused on vacation rentals or leisure properties, which are usually situated in geographic locations that are tourist destinations, or they can be urban rentals that are likely to attract both tourists and corporate travelers. Depending on which population you want to serve, the amenities you provide, your seasonal budgets, your nightly rates and your business plan will need to be adjusted accordingly. 

While there are some differences in how one would run a vacation rental as opposed to a short-term rental that is used for other purposes, this doesn’t really affect how you would start the process.  Therefore, for the sake of consistency in this article we will be using the term “vacation rental” but the tips here are relevant for getting started with any “short-term rental”.

If you have already acquired a vacation rental and are looking to increase your bookings check out these recent articles for the next steps in your journey:

  • The Ultimate Airbnb Host Checklist to Secure More Bookings
  • Reducing Double Bookings on Airbnb and Other Channels
  • Sustainability Matters: 8 Ways to Make Your Vacation Rentals More Eco-Friendly.

guesty vacation rental tips

How much profit can I make from vacation rental properties?

 According to data from Mashvisor from August 2022, the median monthly Airbnb rental income in the US reached $3,196 per property (vs $1,787 for a traditional rental income). These numbers can, of course, fluctuate based on the quality of the property, the level of service provided and the efficiency and effectiveness of internal operations.

No matter what kind of property you’re renting, one of the key strategies for maximizing your profit is implementing a dynamic pricing model that reflects dips and rises in demand. Using a dynamic pricing tool, your prices can automatically be adjusted based on market demand, making it effortless to optimize your prices and encourage bookings. This way, your prices will adapt during shoulder seasons (the periods of time between the peak season and the offseason) and will invite the most revenue possible when people are most willing to pay. 

Getting started with vacation rentals

Like any business venture, a vacation rental business requires a multifaceted skill set including savvy in finance, legal, tech, marketing, sales and more. Luckily, the STR community is extensive and there are endless avenues of support available for guidance along the way including online and digital courses, forums, influencers, webinars and in-person events and conferences (check out more of Guesty’s resources for additional tips in each of these areas).  

Let’s walk through the basics of the process to get started on your vacation rental business. 

create_vacation_rental_budget

Step 1: Crunch the numbers and decide how to invest

Before you commit to any property, you want to crunch the numbers to get an estimate of how much income you can potentially make. This depends on a number of factors including the investment requirements and potential returns on the property. You will need to evaluate the particular property (location, value, cost of repairs, size, etc.), loan or payment details, anticipated income projections, and rental expenses. For more information on how to estimate income on a vacation rental property check out this article on Forbes . 

You don’t have to have a large amount of expendable income to start a vacation rental business as there are a number of paths to enter into the industry with or without purchasing a property yourself. When it comes to building a vacation rental business there are a few options; purchasing properties (on your own or with a partner), rental arbitrage or managing properties on behalf of the owners.  Let’s delve into these a bit more. 

Investing in properties of your own

This option requires significant research into market demand, local short-term rental laws, and other factors to determine which locations are ripe for investment and will draw a steady flow of guests. You will need to conduct price comparisons before you purchase as well as research into average nightly rates of similar properties in the area to calculate your ROI. You will also need to look into mortgage options, downpayment requirements and any legalities around owning a property to rent. 

Managing properties on behalf of their owners

These options are less demanding when it comes to start-up costs and may be the way to go – even just initially – if you find yourself lacking the funds necessary to purchase your own units. 

Rental arbitrage

Short-term rental arbitrage is when a renter sub-leases a long-term rental property for short-term increments at higher rates. This option is great for those who don’t have money to invest and are willing to take the responsibility onto themselves to market and maintain the property. 

host_giving_keys_to-vacation_rental_guest

Property management

Becoming a property manager for an owner or number of owners allows you to take on the roll of renting and managing the property without having to invest in the property at all. Still, you will need to put in the work and become well-versed in the operations of vacation rental management if you’re going to convince homeowners they should put their keys – and revenue streams – in your hands. 

Beyond the property itself, there are other business expenses and factors to consider such as legal implications, financing options and budget. You will need to calculate whether you have sufficient cash reserves for projected start-up costs and slow periods, furnishing and decorating if necessary, unexpected repairs and maintenance, and operating expenses such as booking fees to the OTA sites (such as Airbnb, Booking.com, VRBO and any other sites that you find relevant for your audience), utilities, supplies, etc. In short, like any business venture, you need to work the numbers and have a clear strategy in place. 

Once you have the numbers straight, it’s time to further the plan. Determine your budget and use that to plan out your finances, vision and goals. Based on these decisions you can then move on to scoping out your property. 

beautiful_vacation_rental_cabin_in_forest

Step 2: Decide on the location for your short-term rentals

Now it’s time to execute the most important part of your plan – acquiring your vacation rental property. The location for your vacation rental property is one of the most critical decisions you will make in establishing your business. Here are some things to consider when weighing this decision. 

Proximity to your home: The number one consideration to keep in mind when deciding where to base your business is its distance from your home base. Managing a vacation rental property from afar can have its fair share of challenges, but it can be done successfully if you set yourself up correctly.  It is essential to get to know the area and secure reliable professionals to manage, clean and maintain your property. If you are considering running an Airbnb from a distance, speak to some hosts about how they manage their properties from afar. 

Seasonality: If you want a venture that churns a consistent profit all year, you’re going to want to open your doors in an urban location or an evergreen vacation resort that draws guests year-round. Alternatively, if you want a seasonal business that sees slower months during which you can catch your breath and work on business strategy or rental maintenance, you can consider remote locations that have more appeal during certain times of the year.

Demand: Choosing a location that draws in a steady and reliable stream of travelers is critical. Do your research to ensure you’re investing in an area with ample attractions and a flourishing tourist scene. You may also consider a location that draws corporate or business travelers or a quieter getaway vibe in a beautiful setting.  

Supply: On the other end of the spectrum, you’ll want to make note of the volume of existing vacation rental options in the area. Although most tourist-heavy locations will be swarming with vacation properties, you can zero in on types of rentals that are less common (like villas or apartments) and try to identify ways to differentiate your rental from the current offering. 

handing_over_keys_to_vacation_rental

Step 3: Secure your vacation rental property

Once you’ve determined how and where you are going to obtain your vacation rental property it’s time to act on it! Get to know the market in the area you are seeking and decide on a property using the criteria you’ve identified above. Many hosts start off with property management or rental arbitrage and once they’ve made a little profit, go on to purchasing or co-purchasing a property of their own. Alternatively, they may choose to manage additional properties and build up a business running properties owned by others, which can also be quite lucrative. 

woman_decorating_vacation_rental

Step 4: Getting ready to rent your listing

Once your property is under your management and all of the details are worked out, it’s time to get it ready to rent. It will take some investment to decorate, furnish, and stock your rental but these are key to attracting bookings.  At this stage, it’s a good idea to check out local listings to see what types of amenities your competitors are offering.  When deciding how to stock your property you can use this checklist to attract more bookings to your rental.  

This is the time that you will also need to work out the logistics of your rental including finding any professionals to outsource management services, whether that is cleaning, maintenance, or property management, setting prices and terms of your rental (including any house rules, minimum stays etc.), setting up security (such as cameras and insurance) and any other details that need attending prior to rental. 

During this stage there are a few additional decisions to consider:

Do I need to hire staff for my property?

An important decision you’ll need to make is whether or not to outsource operations or hire in-house for tasks like cleaning and maintenance. You may also find you’d like assistance with managerial responsibilities and will therefore need to take time to assemble a committed and capable team. Of course, solo vacation rental managers can do very well for themselves as long as they have the right tools to aid them, which brings us to our next step.

What software is available for vacation rental management?

The rising expectations of guests coupled with the increasingly complex operations of vacation rental property management make implementing technological solutions into your business model a must. 

Before you open for business, you’ll want to settle on reliable software that can help you both facilitate efficient operations, like managing listings on multiple booking platforms , and managing your staff . It can also help you deliver quality service and experiences to your guests through automated messages , home automation, custom guidebooks and more . 

If you are looking to eventually scale your business, short-term rental property management tools will become an essential part of your operations saving you hours of time and money by automating and streamlining your management. 

taking_photos_of_vacation_rental

Step 5: List on OTAs and market your Airbnb properties

Once you have taken care of all the setup, the next step is listing your property on all the relevant channels and diving headfirst into the marketing game. There are many booking sites out there and each has its own benefits.  The more distribution channels you use to promote your rentals the more visibility you will have and the more bookings you will get. On the other hand, the more booking channels you use, the more organized you have to be to keep on top of your calendar and inbox to avoid double bookings and maintain good response rates. This is where a property management platform becomes critical.

There is an art to listing your property which includes obtaining high-quality photos and well-crafted titles and descriptions to attract bookings. As you can see, each step of this process involves careful consideration and knowledge to ensure success. 

Plan_vacation_rental_business

Like any new venture, starting a vacation rental business is no simple endeavor. With the market only climbing in revenue, however, you’ll likely find the reward is well-worth the effort, as long as you take the time to do it right!

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Complete guide on how to start a vacation rental business

Alina Seredenko

When we were planning this article, everything was different: planes were flying, people – moving freely and the hospitality industry – flourishing.

The global lockdown due to COVID-19 has turned the world upside down and made governments introduce travel restrictions for 96% of all travel destinations , which has already led to huge losses and a growing number of unemployed people.

Unfortunately, now the travel industry ecosystem is down with a great negative impact on the global economy.

However, every cloud has a silver lining. The unprecedented situation and COVID-19 stress-test have already hospitality agents to join efforts and develop post-crisis programs.

Currently, they’re transforming properties to meet new demands, improve accommodations, enhance the quality of services provided, spur eco-friendly and local tourism.

And while we all hope for the better (which will definitely come), let’s talk about how to start a vacation rental business. You have to be prepared for the bright post-pandemic future, anyway 🙂

What is a vacation rental business?

Vacation rentals are various kinds of property offered for renting out short-term or long-term for travellers. Houses and flats are located in favourite tourist destinations, large cities and rural areas.

On Airbnb, you may even find some unusual hosts like snow igloos, castles or even a hobbit hole.

how-to-build-a-vacation-rental-platform-1-1100x743-1 Complete guide on how to start a vacation rental business

Find out the advanced features to help you cater to younger tenants and learn what it costs to build a property management system tailored exactly to your business requirements.

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The Complete Guide to Writing a Vacation Rental Business Plan [+Free Template]

A well-thought-out vacation rental business plan is key to upgrading your business and ensuring your success as a host. As you are starting a vacation rental business or increasing the number of Airbnb properties in your possession, such a plan will help you stay on top of all your business requirements.

With a thoroughly detailed business plan, you will be able to secure the funds from lenders or investors that you need to develop your business. Furthermore, creating a viable strategic plan for your vacation rental business will help to identify potential risks before others start investing in your business. 

What Is a Vacation Rental Business Plan? 

Vacation rental business Summary

A business plan is a set of rules and practices, frameworks, and goals that you can rely on when you need to make decisions for your business. The most valuable contribution comes from doing the groundwork. Thus, it is of great importance for your business success to have an elaborate business plan on hand. 

It helps you define your complete business strategy for running a successful vacation home rental. It also helps you identify risks and chances for success. Furthermore, it is a useful resource to remind yourself of your business goals and ensure you’re going in the right direction.

What to Include in Your Vacation Rental Business Plan? 

For those who are just starting out , it can be a bit confusing to identify what needs to be included in a vacation rental business plan. We composed the following list to guide you through the whole process. Discover 12 essentials that every well-thought-out business plan should have.

Business Goals

Business goals are an important part of your vacation rental business plan. Specify your goals and key milestones to draw up an action plan. This will help you identify steps you need to take as well as track the progress of your business and keep an eye on the ultimate goal.

Make your goals specific by writing them down in detail. If they are too vague, it will be much harder for you to achieve them. It would be good to create some sort of a deadline, but be sure to give yourself enough time to accomplish what you’ve planned.

The following are great examples of milestones you can set:

  • The amount of money you want to make each month.
  • The number of guests you wish to host during each of the four quarters.
  • The number of returning guests you wish to host each year.

The Executive Summary

The executive summary outlines the history of your vacation rental business, including your prior successes and accomplishments. With it, you can cover future goals for your business, as well as include information about your current properties, employees, and third-party vendors.

When potential lenders or investors read your business executive summary, they’ll be able to know what your business has to offer and why it is worth investing in. The following suggestions will help you outline what information to include.

Property location:

  • Is it located by the seaside?
  • Is it nestled in the city center within a short walking distance from tourist attractions?
  • Is it located in the countryside in a secluded area?

Property type:

  • Is your rental family-friendly (i.e. made for family holidays)?
  • Is it small and intended to cater to business travelers on short trips?
  • Is it large and located nearby an attractive beach – a perfect summer rental?

Target audience:

  • Do you want to attract families?
  • Is your rental perfect for couples?
  • Is it suitable for large groups of people?

Peak rental season and weekdays:

  • Is it designed as a summer or winter rental?
  • Is it suitable for all-year-round renting?
  • Are there any festivals or events making it a desirable place for certain dates in the year?
  • Is it intended for business people on business trips?

Your Value Proposition

The company’s value proposition spells out the unique selling points (USPs) of the business. It provides an in-depth analysis of the unique offerings that your business brings to the rental market.

You should find characteristics that make your vacation rental stand out. By knowing your strengths, you will be able to show them in the best light and, thus, attract more guests. Find out how your property is different from the competitors’ properties by asking yourself the following questions:

  • Does my property have a unique/convenient location? For example, is it close to the beach or a famous landmark? Does it offer access to such facilities such as public transport, shopping centers, grocery stores, etc.?
  • Do I have any unique amenities, such as a swimming pool, hot tub, free parking, etc. on offer?
  • Can I offer any additional services, such as breakfast, transportation to the airport, or bike rental?
  • Does my property stand out in terms of design? Has it recently been renovated?
  • Is my property fairly priced?

Doing thorough research on your key selling points will help you position your property in the right way. Moreover, you’ll be able to come up with a couple of more ideas on how to improve your offerings to achieve maximum occupancy rate and profitability in your business.

Management Structure for Your Vacation Rental Business

This section of your vacation rental business plan should explain your business management structure. A sound management structure will improve productivity and ensure that all members of your organization can achieve their true potential.

Is the structure of your company, as a partnership or ownership by a single individual, living up to its potential? Spell out the management structure of your business in its current state, including any property management services you use.

Operations Plan

The operations plan will help you make decisions regarding hiring, company standards, and the way you will keep up with the day-to-day activities of running your business.

Daily tasks include managing all the business aspects of your properties, such as taxes , insurance, reservations, payment processing, maintenance, and related administrative tasks.

Think about how your current setup has worked so far… Are there any improvements that can be made as you expand your business?

vacation rental business plan

At this juncture, you’ll also need to decide what role you want to play in your vacation rental business in the future. Do you want to continue to play a key role or would you like to bring in additional staff to help spread out the responsibilities?

If you manage multiple properties, you might want to outsource some of your daily operations. Here are the areas you might consider to get assistance with:

  • Managing reservations, updating calendars
  • Cleaning and laundry
  • Maintenance
  • Marketing and advertising
  • Property management (meeting guests, dealing with complaints, etc.)

Financial Plan

In this section, you should cover the financial history of your business. You can do this by discussing all of your prior successes and how they have led to the state of your business today. You will also need to create a detailed financial plan and projections .

Your financial plan should include

  • 12-month profit and loss projection
  • 5-year financial growth plan
  • Cash flow projection
  • Estimated balance sheet of expenditures for your business
  • Cost analysis

For this part of the vacation rental business plan, it is a good idea to work with an accountant. This will ensure that your documents meet the financial reporting standards required by commercial lenders.

Customer Analysis

A customer analysis represents a study of your ideal guest. Knowing your audience and what they want and need will help you run a successful vacation rental business. Here, you’ll describe your target customers, including the types of Airbnb guests that your business attracts or you plan to attract.

Within your business plan, you should create different, detailed buyer personas based on the type of guests, or the ones you aim to attract. Creating such a detailed profile of your ideal guest (including info about their age to their income) will help you grow your business later on.

When creating an ideal guest profile, you should think of a fictional persona. Give him or her a name and age, a vocation, etc. to help know exactly what type of guests to target and how.

These guest profiles you can use time after time, in all aspects of your business to figure out how to get more bookings . With a good customer analysis, you will be able to understand what to expect from your guests, what they will like and dislike about your rental property.

Here’s an example of how to create an ideal guest persona:

  • Give him/her a name
  • Think about his/her profession
  • How old is he/she?
  • Does he/she have a family?

Let’s say your ideal guest is John Smith, an interior designer in his early forties. He is a father of three and often travels with his family. This means that your rental should be family-friendly with a lot of entertainment options for kids. Think of all the amenities such a guest will look for.

Also, your rental should be childproof and free of any sort of clutter. Ensure enough empty space inside and put all the breakable items on higher shelves to avoid damage during the kids’ playtime.

Moreover, since he has a big family, you should also be sure that your rental has enough space to accommodate five people.

Competition Analysis

Carrying out competitor research is of great importance, especially for vacation rental businesses. You need to know who the other local short-term rental owners are. You should find out how they do their work, attract guests, what their pricing strategy is, and whether there are any special services or amenities that they offer, etc.

Do thorough research of the market for vacation rentals to find your direct competitors and analyze them. A competitor analysis will help you understand how your business can thrive and help you win bookings over your competitors. All this will secure your position in the short-term rental industry. Here are some suggestions to help you get started.

  • How much are your competitors charging per night?

This will help you set up the right prices for your area and ensure more bookings. Guests are more likely to choose affordable rentals. Thus, fair prices will encourage more reservations.

  • Do your competitors offer additional services?

If not, this can be a great opportunity for you to take action and offer additional services for guests. For example, transportation services can be a selling point for many guests who want to avoid the hassle of navigating a new city.

  • Do they offer a diversity of amenities and what are they?

By knowing what your competitors offer, you can go the extra mile and provide even more unique amenities to ensure the highest level of guest satisfaction.

Marketing Analysis and Strategy

Your marketing strategy describes the tactics that you will use to achieve bookings and increase the occupancy rate in the future. Use this section of your vacation rental business plan to outline in detail which marketing techniques and tools you are going to implement to promote your property .

Your marketing plan should cover strategies for marketing your vacation rental property to the right audience. It should be diverse and include all relevant methods, including both online and offline marketing. Asking yourself the following questions will help you create a thorough marketing strategy.

  • On which listing sites will you place your property?
  • What social media platforms will you use for promotion?
  • Will you invest in paid advertising?
  • Will you design and print flyers for local tourist boards?
  • Will you have business cards?
  • Will you take advantage of email communication with your past guests?

Also, make sure to create a distribution plan for successful advertising. It should cover the costs for chosen methods and outline how you will handle channel management.

Moreover, the buyer personas you’ve created can help you with building a quality marketing and distribution strategy. Knowing the exact type of guests you are targeting helps you adjust your marketing strategy and market your vacation rental in a way that resonates with them.

In addition to financial documents, you should include more useful information. Indicate anything that can help build the case for the viability of your vacation rental business plan. Here are some ideas for documents to include:

  • Resumes (your own and of your key employees);
  • Permits to demonstrate your willingness to comply with the latest regulations regarding short-term rentals in the jurisdictions where your business operates;
  • Contracts with third-party vendors for property management services;
  • Vacation rental industry studies that you’ve cited in your business plan;
  • Letters of support

Making plans for the future

The vacation rental industry allows a lot of room for change and growth. Thus, it is essential to think about the future of your business and what you can do to expand it further.

vacation rental business plan for hosts

Once you’ve established profitable business and completed your goals, you should have a general idea of what the next steps are. The following are examples of goals you may want to include in your business plan for the future:

  • Increasing the occupancy rate
  • Minimizing expenses
  • Raising net income
  • Adding more properties
  • Offering additional services
  • Providing more amenities
  • Optimizing your daily workflow

Once you complete this set of goals, you should think of the next set to secure progress.

Scaling your business with smart investments

As with all other businesses, investing is essential for your vacation rental business growth. The more effort, time, and money you invest in your business, the more revenue you will generate. Your hard work will pay off very quickly, resulting in a large number of returning guests and increased income.

Investing in digital tools and management software will help you stay in full control of your business at all times. You will be able to automate the key aspects of your business for more efficient management.

Vacation rental software, such as iGMS , can help you put your business on autopilot. By using advanced smart tools, you can streamline your routine operations and manage all your vacation rental properties across various channels.

What’s more, you will be able to reduce costs as iGMS allows you to manage your business without expanding your team.

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Creating A Winning Vacation Rental Business Plan

Conrad O'Connell

  • Last updated: January 6, 2021
  • Posted in: Featured , Marketing

vacation property business plan

Choosing to invest or manage vacation & short term rental properties is a business that can be rewarding and profitable. As with any business idea, developing a business plan is a valuable first step to building a successful business. With a vacation rental business plan, you can see the pros and cons of starting what could be a profitable opportunity. 

Vacation rentals have several expenses , including maintenance, taxes, marketing, utilities, and cleaning costs. Before investing in a vacation rental business, look closely at how the both owning and managing properties will affect your taxes. You should also look closely at how much time you have to give to the business. You should include all of these factors in your vacation rental business plan. 

Taking the time to write and analyze a vacation rental business plan helps you make a smart decision. Starting a business is exciting and stressful, so having some expectations about what can go right and wrong is helpful. Use this guide to develop your plan before you invest in vacation rentals. 

What is a Business Plan?

A business plan is a document that includes the framework, strategies, and goals you have for a business you are considering investing in or building on your own. Investors and banks usually ask to see business plans when deciding whether or not to loan money to new businesses and startups. Each plan should include details about finances, costs, employees, and procedures. 

Before you invest in your first vacation rental property or manage listings for other property owners, you should write your investment plan so you can purposefully envision your future as a vacation rental business owner. 

What To Include In Your Business Plan?

Each business plan follows a similar structure. Depending on the type of business, there could be some different goals or sections that you should expand. For example, a business plan for purchasing rentals might look very different than a plan to manage vacation rental properties for other property owners. This template can help you organize your business model and plan to maximize your chances of success.

Corporate Summary

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Each business plan needs to have a corporate summary. This is the short version of your business plan. It does not require a plethora of details, as those come later in the document. 

As you craft the corporate summary for your vacation rental business, you should ask yourself a few key questions. Most future business owners write the synopsis first or last – after considering the problems in the body of the plan. 

The key questions should answer who, what, when, where, why, and how. 

  • Where will I buy/manage my vacation properties?
  • Who will stay in them? 
  • How will I market them?
  • How much can I charge per day, per week and per month?
  • What is the average demand in my area yearly?
  • What type of properties will I buy?
  • Why do I want to buy these properties?
  • When will people want to stay in them?
  • Will I offer long-term, mid-term or short-term rental stays?

You can always make changes to the summary as you work through the rest of the plan. But, writing the summary and creating questions is an excellent place to start. As you ask yourself questions, pay attention to the other problems that arise in your mind. Write them down, so you don’t forget them. 

Helpful Resources

  • Airdna – Research rates and market demand.
  • Google Trends – Find destinations with expanding search interest.
  • SimilarWeb – Look for local websites with high + growing website traffic.
  • Mashvisor – Calculator tool for measuring the ROI of each property.

Industry Analysis

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Before investing in vacation properties, it is helpful to analyze the rental industry. Vacation rental properties might be in high demand in some communities, but not in others. Look at the prices to buy the properties, what the taxes are, and how much guests are paying to stay in them. Find out how many are sitting empty during busy seasons and when the low seasons occur. 

As you investigate the industry, figure out where you can spend your money wisely. Then ask more questions:

  • How will you stand out from the competition?
  • What makes your properties unique?
  • What attractions are nearby?
  • What onsite activities are available? 
  • What offsite activities are available?
  • How will I advertise?
  • Do renters need a car , or is the property close to public transportation?
  • What central transportation hub is nearby?
  • What restaurants or grocery stores are nearby?
  • Will I adjust my rental rates during different seasons?
  • What is the occupancy in my rental properties? 
  • What rules should I establish for my rental properties? 
  • Do I need to hire a rental management company?
  • What will my pricing strategy be?
  • What competition will I have?

As you write your plan, pick some properties that are already established and successful. Include a few properties in your plan with their rates, amenities, location pros and cons, seasonal occupancy rate, and anything else that applies to your goals for your future business. Then, analyze what your unique selling points will be.

Competitor Analysis

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Knowing the industry matters, and so does knowing your immediate competition. To analyze the competition, choose a part of your plan and analyze the competition on a site like Airbnb, Booking.com, Tripadvisor, or Vrbo (formerly HomeAway). This is like an industry analysis but on a much smaller scale. 

For example, if you plan to buy a cabin in the Rocky Mountains, you will want to look at other nearby rental cabins. You begin by asking questions: 

What are the Other Owners Charging Per Night?

  • Cabin 1: $150
  • Cabin 2: $165
  • Cabin 3: $140

What are the Cabins Like? 

  • Do they have amenities like hot tubs or garages?
  • What kind of views do they offer?
  • How far is the cabin from town?
  • How are the cabins furnished?
  • How many bedrooms do they have?
  • Are the cabins luxurious? Rustic? Somewhere in between?
  • Do they offer WiFi? Laundry? Smart TVs?

How Do the Locations Vary?

  • How long is the drive?
  • Is the cabin close to a city or town?
  • What activities are nearby? (Hiking, canoeing, skiing, off-roading, etc.)
  • How close is the cabin to transportation hubs?

After analyzing the closest competition, you can determine how successful your vacation rental businesses can be.

Guest Analysis

5 13

After you analyze the industry, the next step is to analyze your potential guest demographic. To do this, you should create a buyer persona, which is your ideal guest. Make the potential guests as real as possible with names, careers, education, ages, and vacation goals. You might even decide to market to business travelers. 

Along with these essential components, you should also look at what your ideal guest likes to do while on vacation. Does your guest like to go to the beach or the mountains? Does your guest like to travel with immediate or extended family? You should also consider your ideal guest’s spending habits while on vacation. 

As you are analyzing your guest, consider the locations of the properties you are considering. Some properties do not allow children. Some do not allow people under age 55 to stay there. Some will not allow people under 25 to reserve the property. Other properties do not allow short-term rental business. 

Some vacation rental business plans also include the potential pitfalls of ideal guests. What type of complaints could you envision your guest having? Then, consider what will continue to keep your ideal guest happy, so they return and tell their friends. 

Marketing Plan

6 9

Your vacation rental marketing strategy plays a massive role in your success over the long term. Advertising on vacation rental websites is affordable and is a great way to earn your first 10 bookings for each property, but long term you’ll want to earn direct bookings and be able to drive guests to your properties via the three core pillars: search, social and email marketing.

Your marketing strategy should reflect the guests you expect to stay in your properties. If you are marketing to snowbirds, you will need to advertise in the winter because your properties need leads to thrive and earn bookings. If you are marketing to college students, you may consider using niche listing sites or offering monthly rates on Airbnb to maximize bookings.

Need help generating your vacation rental marketing business plan? Get in touch with our team.

Joining the OTAs

Many vacation rental businesses advertise on online travel agencies (OTAs) like Airbnb, Expedia, or Vrbo. These listing sites charge for ads and rentals. Many vacationers only use these sites, so you could be losing a large rental market if you aren’t on them. 

If you plan to market your property on the OTAs, you will want to research other properties in your market. Look at their rates, amenities, and photos. It is nearly impossible to get renters into an Airbnb if you do not have outstanding photographs. So, you will need to find someone who can take them for you. 

Before you commit to listing on an OTA, ask yourself a few questions:

  • What is the cost? Is it worth it, or does the fee take too much of your profit?
  • How are the fees billed? 
  • Do you have to sign a contract? For how long? 
  • How do renters pay? How do you get paid? 
  • What rules must you follow? 
  • Does the OTA attract your ideal guest? 
  • Is the OTA website intuitive? Or is it too much to manage on your own?
  • Does the OTA make SEO decisions, or do you do that?
  • How much automation is involved on the website?

Services Offered

Your strategic plan should include the type of services you plan to offer. You will have complete control over whether your experience will be basic, full-service, or luxurious. Some Airbnb owners stay on the property and serve as superhosts, while others are completely hands-off and let a property management company take control. 

Included in the services are the amenities and furnishings you provide. If you expect your guests to stay for more than a few days, you should provide a washer and dryer or have nearby laundry services. If your renters only stay for a few days, you will want to have a high-quality cleaning service. 

Your price point should reflect the type of accommodations you are offering . If you have luxurious amenities, you can charge an extravagant price and you should also offer full-time host services. If you don’t have elegant furnishings, then your rates should not be too high for the people who will stay there. 

Operations Plan

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The best vacation homes have a set of rules for the guests. If you are expecting to hire staff, they will also have restrictions. This plan will help you run your properties daily. You will need to have a plan for administrative duties, maintenance expenses, and inventory. This is the opportunity to get your business ideas out of your head and onto paper. 

Even if you only have one small property, you need an operations plan. This will keep your business at a level that you and your guests appreciate. Having a plan makes it easier to expand and still maintain your standards. With an operations plan, you can determine what you can do on your own and what you will need to outsource. 

The location of your property affects how much outsourcing you will need. If the property is far from your home, you will need to hire property managers to take care of:

  • Housekeeping
  • Landscaping, mowing, snowplowing
  • Repairs and maintenance
  • Hosting and local management

Other operations can be done remotely. Those include:

  • Bookings and calendar management
  • Accounting and financial reporting
  • Marketing and advertising
  • Customer & guest service

If you decide to hire staff, you will have to figure out how to hire them, how to pay them, and who will take care of those details. You might be able to hire someone through a local agency or hire a firm to manage the entire property, both inside and outside. You will need to make these decisions and figure out what they will cost. 

Financial Details

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When you decide to invest in vacation properties, the ultimate goal is to make money. An essential part of the vacation rental business plan is the financial plan section, where you look closely at revenue and expenses. 

In this section, you look at where the vacation homes bring in revenue and what expenses exist. When you build this section, you look at the monthly expenses and income. Many startups recognize that they might not turn a profit for the first few months. 

Investors recognize that entrepreneurs have learning curves in their new industries, and they tend to figure them out quickly. However, there are several costs to consider as you determine the financial viability and cash flow of your investment idea. They include:

  • Mortgage payments
  • Taxes – federal, state, local, and lodging/tourism
  • Maintenance expenses
  • Marketing costs
  • Utility bills like water, electricity, gas, cable/satellite, internet, garbage
  • Association expenses
  • Furnishings

Some of these expenses are fixed, so you know exactly how much you will pay each month. But some expenses, like maintenance and utilities, can vary from month to month, so it is helpful to estimate at the high end. 

After you figure out how much you have to spend each month, you can establish your daily or weekly rental rate. 

For example, if you have one rental property that costs $2000 for all of your expenses, you will need to charge enough to cover that cost and give you profit. Therefore, you might want to charge at least $150 per night. If you only fill 60% of your potential nights, you will profit from $700 per month. 

Many vacation rental property owners have different rates during the high and low seasons. You might charge more during the peak seasons because properties fill up quickly. But, you might entice vacationers to stay in your property during the slow times by charging an affordable rate. Use the peak rates to cover the quiet times. 

If you are presenting your plan to a financial organization, you will want to include details about finances. You will want to show the financial organization how you will stay open for the first few months. The financial organization will want to see your personal finances to ensure you can afford to run the business before it becomes profitable. 

You will also want to explain what you will do if the business is slow to grow and whether you have a back-up plan. The financial institution will also want to see how you plan to cover unexpected costs, like replacing furnishings. They might also want to know what your next level up will be if you find success in this new business. 

Achieving Your Vacation Rental Business Goals with a Solid Plan

Your plan is the general guide to how you will run your short term rental / vacation rental business to make a profit. This framework will help you organize your thoughts into a working plan so you can actually see your vacation rental property business come to fruition.

Take The Next Step

  • Download the free guide: 17 Ways To Level Up Your Vacation Rental Marketing and get our best tips on how to grow and scale your business.
  • If you want to learn more about how to generate more bookings,  visit our blog   and read our articles.
  • To get started working with us,  visit our contact page , complete the form and schedule a call.
  • If you’ve found this article helpful, please share it with your friends, team or other vacation rental managers you know!

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How To Write a Vacation Rental Business Plan For Your Rental Property

Vacation rental as a business, vacation rental as an investment, what is a vacation rental business plan, why you need a vacation rental business plan, what to include in your business plan, putting your vacation rental business plan into action, free vacation rental business plan sample template.

One of the most common mistakes beginner real estate investors do is to jump in and get in over their heads. In addition, one reason that they fail is that they don’t treat their investment like a business.

A vacation home is more than just listing your rental property on Airbnb and waiting for the money to roll in. It’s a business and, just like any other business, you can’t expect to succeed without a business plan.

Therefore, the first step to starting a vacation rental business is putting together a real estate business plan that outlines your goals and keeps you on track.

Here’s how to write a business plan for a rental property in 2022.

Is a vacation rental considered a business?

Some consider a vacation rental as a business while others think it’s more of an investment. This depends on the nature of your relationship with your vacation rental. Is your vacation rental a business or an investment? Find out below:

Your vacation rental is a business if you own a property, earn a profit off of it, and regularly work at the property.

If you rent out a house to a tenant and you take on the management position where you’ll need to do things like replace a water softener or fix something that’s broken, you’re more likely to be considered a business.

Even if you’re not at the property that often but, hire a property manager and other staff, the property can still be considered a business.

If you have a property that you rent to a tenant and you use the income to pay bills relating to that property, you may find that you have an investment, not a business, according to the IRS.

Also if you have a rental property that has been vacant for a long time or becomes vacant more often than not, that specific property may be considered an investment because you don’t spend a lot of time working on the property or with a tenant that lives there.

Lastly, if you’ve invested in a property for tax purposes and aren’t continuously involved in management duties, the IRS will consider this an investment. This can include limited times partners, real estate investment trusts, and people who own shares in the property.

Read more: How To Start a Vacation Rental Business: Complete Guide

By definition, a business plan is a document that includes the framework, strategies, and goals you have for a business you are considering investing in or building on your own.

As a new business or startup that is seeking funds, you might turn to Investors and banks for that money. Usually, these organizations ask to see business plans when deciding whether or not to loan you money. Each plan should include details about finances, costs, procedures, and more.

Creating a vacation rental business plan is super important because it helps you purposefully envision the future of your business.

A business plan is as important to you as it is to your potential investors. Not only is it a requirement when embarking on certain things like sourcing funds but, it also helps you define your complete business strategy for running a successful vacation home rental.

Beyond making money and strategy, having a business plan for your vacation rental serves as a light in the dark to make sure you’re on the right track, reaching goals, and accurately measuring success.

It also helps you identify risk, remind yourself of your business goals, and have enough data to examine your business and how well you are progressing in the future.

1. The Executive Summary

Your executive summary should briefly explain the purpose of your business. You want to begin by properly introducing your vacation rental business.

It is just a brief overview that sums up your rental business and includes all of the most important information you want to get across to your partners, guests, investors, and others.

This is so that anyone can read the first page of your plan and know, at a glance, what your business entails.

The rest of the business plan will go into great detail, but the summary should give readers a quick idea of why you are from the business and what it will do.

This can be accomplished in just a few paragraphs. You may even want to break your summary into sub-sections, like the ones below.

These are some important questions to be addressed in this section:

Where is my vacation house located?

What crowd does it cater to? Families? Couples? Large groups of friends?

Is it a seasonal rental or all-year-round?

Why do you have this property?

Is this your main form of income?

Of course, you do not need to follow this structure and feel free to add other information you consider important but, make sure to rewrite them to make sure it sounds professional and eye-catching to the reader.

3. Your Value Proposition

Your value proposition means stating why your customers are going to choose your business. Essentially it’s saying what is the value of your business to your customers.

In addition, it’s also an avenue to state why these customers will choose your vacation rental over others in the area. Consider how your vacation rental will provide a guest experience, services, or amenities that the other properties in your area simply can’t provide.

4. Management Structure for Your Vacation Rental Business

This section is where you get to explain what your business management structure is like. Is it a partnership or ownership by a single individual?

Describe the management structure in detail in its current state, including third-party property management services that you may use.

A suitable management structure will enhance productivity and ensure that all members of your organization can achieve their true potential.

5. Operations Plan

This section is where you get to provide an insight into how you are going to run your new business on a day-to-day basis.

Some of these daily operations include tax management, insurance, reservations, payment processing, maintenance, and related administrative tasks.

Here are just a few helpful prompts and examples in case you get stuck:

Are you going to hire any staff?

Will you use a cleaning agency or hire in-house cleaners?

Will you hire an accountant to help me handle the finances of my business?

Who will deal with bookings and customer complaints?

To streamline day-to-day operations, you can also use software such as Booking Ninjas vacation rental PMS which provides a booking system, channel manager tool, accounting tools, and more.

Read more: How To Manage Vacation Rental Property

6. Financial Plan

When thinking of a financial plan for a business, the first thing that comes to mind is ‘How am I going to afford this rental business?’ Do you have options like self-financing, taking out a loan from family and friends? Or bank or investors.

Proper budgeting and planning your finances will prevent any stress in the future, and it will mean that your business is ready to thrive. For this reason, it’s a good idea to work with an accountant on creating your financial plan.

These are some basic information that should be highlighted in your financial plan

12-month profit and loss projection

5-year financial growth plan

Cash flow projection

An estimated balance sheet of expenditures for your business

Cost analysis

7. Customer Analysis

A customer analysis is all about knowing your ideal guest aka your target audience. The idea behind a customer analysis is to create multiple detailed guest personas or profiles and find ways to use these profiles to better cater to them and attract more of these customers to your vacation rental.

In summary, a customer analysis helps you in getting to know your ideal customers, what they want and what they need from a vacation rental property.

Here are some key questions to include in your guest profiles:

What’s their name?

What do they work as?

What age are they?

What is their idea of an ideal vacation?

Do they have a family?

With these details, you can find patterns in spending habits, add-on services a certain customer profile prefers, and more. Creating these profiles is one thing but, keeping up with them and using them to create data that can be analyzed can be difficult. Consider using a PMS or CRM for this.

Read more: Outstanding Vacation Rental Ideas 2022

8. Competition Analysis

One thing is certain - you’re not the first one to start a vacation rental in the area especially if it’s a common vacation spot. So you’re going to have some competition sometimes, a lot.

Carrying out some competitive research is an essential part of your business plan. You need to take a look at your competition and analyze them to see how your business can thrive in such an environment.

With competitive analysis, you want to look at all of the people who may win a booking over you and use what you find to put yourself on top. It’s all about what you can do better, what you can do differently, or what you can replicate.

Here are some questions to get started with:

How much do your competitors charge per night?

Are they basic rentals or high-end, luxurious units?

What extra services do they offer?

Do they offer a wide range of amenities in the house?

Is WIFI included?

9. Marketing Analysis and Strategy

You could have the best vacation rental in the whole state but, be down bookings because nobody knows. This is why having a marketing strategy that works is important.

To achieve maximum bookings, you need to create and explain in detail the strategies you have decided will be best to use when targeting your key markets.

Here are some questions that can help you create your marketing plan:

On which listing sites will you place your property?

What social media platforms will you use for promotion?

Will you invest in paid advertising?

Will you have business cards?

Will you take advantage of email communication with your past guests?

Will you create a Website and utilize SEO?

Asking yourself these questions will help you create a thorough marketing strategy.

Also, make sure to create a distribution plan for successful advertising. It should cover the costs for chosen methods and outline how you will handle channel management.

Read more: Tips On How To Make Your Vacation Rental Stand Out

Revenue Management

There’s a quote by Karen Spencer that sums up what you need to know about revenue management in your business plan. It goes like this -

“Set stretching yet realistic prices. Quality holiday homes can charge more (because they are worth more) than an average place. When it comes to setting your prices, you need to know what it costs you to welcome each set of guests and work up from there, ensuring a healthy profit per booking every time. The more you charge per week, the more revenue per booking, yet your changeover costs, your marketing costs, your time spent, will be the same.” – Karen Spencer

When running a vacation rental business, you need to keep on top of your incomings, outgoings, and general overall finances.

Although this part can be intimidating, the good news is there are a lot of tools and software out there to help. Software like Booking Ninjas provides revenue management tools and analysis tools.

Here are a few questions that help in building the revenue management section of your business plan:

How much will you charge per night?

What level of taxes will you have to pay to the government?

What will your utility bills be?

What will your staff costs be?

10. Appendix

This is where you include any additional documents that you want to use to give your reader a feel for your product, marketing, services, and so on.

In your appendix you should put all of the relevant documents and folders you have for your business, containing the vital information you need to keep things running.

In addition to financial documents, you should include more useful information. Indicate anything that can help build the case for the viability of your vacation rental business plan. Here are some ideas for documents to include:

Resumes (your own and of your key employees);

Permits to demonstrate your willingness to comply with the latest regulations regarding short-term rentals in the jurisdictions where your business operates;

Contracts with third-party vendors for property management services;

Vacation rental industry studies that you’ve cited in your business plan;

Letters of support

11. Making plans for the future

Some people will suggest doing this step first but, sometimes you don’t have a clear vision to write your accurate goals for the future of your business until you have done some of the other steps listed above.

This is where you write down what your plans and goals are for your business, plus what key milestones will help you achieve these targets.

This section will be useful to refer back to and to ensure you’re progressing as you should.

Some milestones you can adopt include:

Monthly financial projections (This answer will be linked to your financial plan)

How many guests do you want per month or quarter

What rate of growth do you want in your bookings year-on-year?

How many returning clients do you want each year?

So you’ve written your business plan and properly gone through all of the things that you would need to succeed in the vacation rental business. What next?

The next thing is to get started. From finding the right location to getting the property, furnishing up the place, adopting a vacation rental system, and more. Don’t worry, we have a comprehensive guide on what to do next after creating your business plan. Find out more in this step-by-step guide on how to start a vacation rental business in 2022.

Need a comprehensive business plan template to help you in creating your ideal business plan? Click here to download our

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Vacation Rental Business Plan Template

Written by Dave Lavinsky

Vacation Rental Business Plan

You’ve come to the right place to create your Vacation Rental business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Vacation Rental companies.

Below is a template to help you create each section of your Vacation Rental business plan.

Executive Summary

Business overview.

Liberty Vacation Rentals is a vacation rental company located in Boston, Massachusetts. We rent residential properties around landmarks and points of interest to provide convenient lodging for travelers. Our accommodations can be rented daily, weekly, or monthly. We also offer bed and breakfast-style rooms in addition to whole-property rentals. No matter how long you visit the exciting and historic city of Boston, you’ll enjoy a luxurious experience that will feel like a home away from home.

Liberty Vacation Rentals is led by Andrew Collins, who is a licensed real estate broker with 20 years of experience. He has spent much of his career working in different real estate agencies where he specialized in rentals for 5 years before specializing in vacation sales for the next 10 years. His skills and experience will make him invaluable to our company’s mission.

Product Offering

Liberty Vacation Rentals will offer luxurious vacation rentals for residents and tourists of the Boston, Massachusetts area. We offer several different property types:

We offer waterfront rental properties as well as properties located near downtown and historical landmarks. We also have bed-and-breakfast-style properties in addition to whole-property rentals.

Customer Focus

Liberty Vacation Rentals will primarily serve tourists and business travelers that visit the Boston area. About 23 million people visit Boston every year, meaning there is an incredible demand for vacation rentals and other accommodations. Many tourists, especially those who are affluent, are looking for lodgings that are comfortable and luxurious. Liberty Vacation Rentals will offer these lodgings so that our properties can feel like a home away from home.

Management Team

Liberty Vacation Rentals’ most valuable asset is the expertise and experience of its founder, Andrew Collins. Andrew has been a licensed real estate broker for over the past 20 years. He has spent much of his career working in different real estate agencies where he specialized in rentals for 5 years before moving to specialize in vacation sales for the next 10 years.

Liberty Vacation Rentals will also employ an experienced assistant to help with various administrative duties around the office and several contractors that will lead the repairs and renovations that need to be done.

Success Factors

Liberty Vacation Rentals will be able to achieve success by offering the following competitive advantages and unique selling points:

  • Location: Liberty Vacation Rentals’ location in the downtown area is central to historical landmarks, tourist attractions, corporate centers, shopping districts, and restaurants.
  • Business Amenities: All of Liberty Vacation Rentals’ vacation properties have basic business amenities including high-speed internet.
  • Management: The management team has years of business and marketing experience that allows the company to market and serve customers in the same manner as its most sophisticated competitors.
  • Relationships: Having lived in the community his whole life, Andrew Collins knows all of the local leaders, as well as many of the area’s newspaper reporters and other influencers. As such, it will be relatively easy to build the Liberty Vacation Rentals brand.

Financial Highlights

Liberty Vacation Rentals is seeking a total funding of $350,000 to launch the business. The capital will be used for funding capital expenditures, salaries, marketing expenses and working capital.

Specifically, these funds will be used as follows:

  • Office space build-out: $50,000
  • Office equipment, supplies, and materials: $50,000
  • Three months of overhead expenses (payroll, rent, utilities): $150,000
  • Marketing costs: $50,000
  • Working capital: $50,000

Vacation Rental Business Plan Template

Company Overview

Who is liberty vacation rentals.

Liberty Vacation Rentals is a vacation rental business located in Boston, Massachusetts. We rent residential properties around landmarks and points of interest to provide convenient lodging for travelers. Our accommodations can be rented daily, weekly, or monthly. We also offer bed and breakfast-style rooms in addition to whole-property rentals. No matter how long you visit the exciting and historic city of Boston, you’ll enjoy a luxurious experience that will feel like a home away from home.

Liberty Vacation Rentals’ History

After working as a real estate broker for 20 years, Andrew decided to start a new company that offers luxurious vacation rentals in the Boston area. He knew that Boston was a prime location for tourism and that there never seems to be enough accommodations to keep up with demand. He scoped out the areas for properties that would be valuable- specifically luxurious properties that are located near historical landmarks and the waterfront.

In March 2023, Andrew Collins incorporated Liberty Vacation Rentals as an S corporation. Since incorporation, the company has achieved the following milestones:

  • Acquired a centrally-located office from which to operate Liberty Vacation Rentals headquarters
  • Began recruiting key employees
  • Acquired rental contracts with 10 different residential properties

Liberty Vacation Rentals Services

We offer waterfront properties as well as properties located near downtown and historical landmarks. We also have bed-and-breakfast-style properties in addition to whole-property rentals.

Industry Analysis

Over the past five years, the Vacation Rental industry has grown steadily, despite the challenges of the COVID pandemic. According to Allied Market Research, this growth is expected to continue as the Vacation Rental industry is expected to grow at a CAGR of 12.4% from now until 2031.

Millennials are the major force in boosting the growth of the vacation rental industry. Rising expenditure on travel, vacations, and accommodation among this generation is fueling the market growth. Travelers in this demographic are more inclined towards vacation rental property over hotels owing to the comfort, low cost, and additional privacy of these accommodations. In addition, many rental properties accept pets for additional fees or a security deposit and feature fenced backyards.

Furthermore, now that the world has moved on from the pandemic and the economy is recovering, people are eager to spend their disposable income on travel. They are more willing than ever before to spend top dollar to have the ultimate travel experience. This includes paying higher costs for more luxurious vacation rental accommodations. Due to all the above factors, the Vacation Rental industry is in a prime position to grow significantly and be highly profitable over the next decade.

Customer Analysis

Demographic profile of target market.

Liberty Vacation Rentals will serve tourists who travel to the Boston area. Many of these travelers are affluent, or at least have enough disposable income to travel to this historic city.

Customer Segmentation

Liberty Vacation Rentals will primarily target the rental market, which consists of the following customer profiles:

  • U.S. tourists
  • International tourists
  • Business travelers

Competitive Analysis

Direct and indirect competitors.

Liberty Vacation Rentals will face competition from other companies with similar business profiles. A description of their direct competitors is below.  

Boston Rentals

Boston Rentals is a luxury vacation rental company nestled just outside of Boston. They have a total of 10 rentals that all offer luxury accommodations. They are conveniently located near the airport, Boston College, and other popular tourist locations. Tourists who rent out these properties can expect elegant amenities, such as walk-in tiled showers with heated floors, soaking tubs, quality linens, fireplaces, outdoor grills, convenience kitchens, original artwork, XM Radio, Direct Dish Satellite, 32″ plasma flat screens, wi-fi, and large furnished screened in porches.  

MA Cottages

Established in 1928, MA Cottages is a collection of individual cabins strewn around Massachusetts. Each one offers a cozy cabin experience but is also equipped with wifi, satellite TV, heating and cooling, and modern bathrooms. Depending on the size, each cottage can accommodate anywhere from 2 to 8 guests. Though many of the cottages are nestled in more rural areas, they still offer easy access to Boston and other historic locations.

Bayside Houses

Bayside Houses is a local vacation rental company that offers house rentals along the bay. The houses can accommodate up to 10 people. Each kitchen is fully equipped and the living rooms have stereo and wifi access. Some houses have pools and other luxurious outdoor amenities. Each home is kept in perfect condition and offers a stunning view of the bay area near Boston.

Competitive Advantage

Liberty Vacation Rentals will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

Liberty Vacation Rentals will offer a unique value proposition to its clientele:

  • Offering rooms and entire residences suited for tourists and business travelers
  • Offering multiple properties for rent in Boston, Massachusetts
  • Providing excellent customer service
  • Offering properties near the waterfront and historical landmarks

Promotions Strategy

The marketing strategy for Liberty Vacation Rentals is as follows:

Advertisement

Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The company will advertise its products in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.

Website & SEO Marketing

The company will utilize the website and SEO to attract new customers. The website will be easy to navigate and provide all the information and pictures needed to show our properties’ amenities. The SEO strategy will also be managed to ensure that anyone searching “vacation rentals near me” or “vacation rentals near Boston” will see our company listed at the top of the Bing or Google search engines.

Social Media Marketing

Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The company will use social media to develop engaging content, such as educational content about Boston and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.

Special Offers

Offers and incentives are an excellent approach to assisting businesses in replenishing the churn in their customer base that they lose each year. The company will introduce special offers to attract new consumers and encourage repeat bookings, which will be quite advantageous in the long run.

The company’s pricing will fluctuate based on the season and occupancy percentages using a computerized yield management system. However, pricing will always place the Liberty Vacation Rentals in the mid-range, below luxury offerings, but above motels and other cheap accommodations in the area. Customers will feel they receive great value when patronizing our vacation rentals.

Operations Plan

The following will be the operations plan for Liberty Vacation Rentals.

Operation Functions:

  • Andrew Collins will be the Owner and President of the company. He will oversee all staff and manage the general operations of the company, as well as property management. Andrew has spent the past year recruiting the following staff:
  • Jacqueline Miller will serve as the Office Manager. She will manage the office administration and accounts payable. She will also handle much of the marketing efforts until the agency becomes large enough to hire a marketing team.
  • John Bell will be the Property Manager and Maintenance Director, who will provide all maintenance at the properties.
  • Maria Hernandez will be the Customer Service Manager. She will manage all customer relations, including confirming bookings and answering questions.
  • Andrew will outsource professionals to handle the accounting and human resources aspects of the business.

Milestones:

Liberty Vacation Rentals expects to achieve the following milestones in the following six months:

5/202X – Finalize purchases of initial vacation rental properties 6/202X – Finish all required maintenance and renovations 7/202X – Kickoff promotional campaign 8/202X – Hire and train initial staff 9/202X – Open Liberty Vacation Rentals 10/202X – Reach break-even

Financial Plan

Key revenue & costs.

Liberty Vacation Rentals’ revenue will come from charging daily fees to customers who rent out our properties. The major costs for the company will include staff salaries, property maintenance, and brand-building. In the initial years, the company’s marketing spending will be high, as it establishes itself in the market.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

  • Annual lease costs: $100,000
  • Average annual property maintenance costs: $50,000
  • Average number of customers per day:

Financial Projections

Income statement, balance sheet, cash flow statement, vacation rental business plan faqs, what is a vacation rental business plan.

A vacation rental business plan is a plan to start and/or grow your vacation rental business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections. You can easily complete your Vacation Rental business plan using our Vacation Rental Business Plan Template here .

What are the Main Types of Vacation Rental Businesses?

There are a number of different kinds of vacation rental businesses, some examples include: AirBnB rentals, Luxury rentals, Beach house rentals, and Cabin rentals.

How Do You Get Funding for Your Vacation Rental Business Plan?

Vacation Rental businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Vacation Rental Business?

Starting a vacation rental business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Vacation Rental Business Plan - The first step in starting a business is to create a detailed vacation rental business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your vacation rental business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your vacation rental business is in compliance with local laws.

3. Register Your Vacation Rental Business - Once you have chosen a legal structure, the next step is to register your vacation rental business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your vacation rental business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Vacation Rental Equipment & Supplies - In order to start your vacation rental business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your vacation rental business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

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How to Create a Vacation Rental Business Plan + Free Template

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Starting a vacation rental business is like a big road trip. Wondering how?

Like in road trips, you need to have a plan—where you’ll stay, what locations you’ll visit, and more; you need a detailed vacation rental business plan to start and make your business a success.

The vacation rentals market is projected to reach $100.20B in 2024, so you’ve made the right choice. now all about writing an investment-ready business plan.

Need help writing? We’ll help.

This vacation rental business plan template will be your reference point, while the guide will help write sections of your plan.

Sounds good? Let’s get started

What is a Vacation Rental Business Plan?

A business plan for vacation rental or any other business is a document that details a company’s goals and how they plan on achieving them. Whether you’re a startup or have an established company, you need a business plan.

Startups can utilize a well-prepared business plan to win potential investors and lenders. In contrast, established businesses can use it to optimize their business operations, track their business goals, and ensure they’re on track and heading in the right direction.

Now that you know what is a business plan and how it can help, let’s head to understanding things you must consider before you start writing your plan.

Things to Consider Before Writing a Vacation Rental Business Plan

So that we’ve already covered the industry outlook part, let’s discuss things you should consider before you write your vacation rental business plan.

1. Understand the vacation rental market

You must understand the market you plan to enter, don’t you? First things first, start researching the vacation rental market.

Your market research may involve gathering and analyzing information about the industry, regulatory environment, market trends, target customers, and market trends.

Understanding the vacation rental market helps you identify your target audience, understand the competitive landscape, key market trends, and consumer demands, and help set competitive yet profitable pricing.

2. Know your competitors

Market research will help you get the information you need about your competitors. Still, a thorough competitor analysis is required to truly understand and know your competition and put it to good use.

How to do it? Identify existing vacation rental properties and analyze their pricing, customer reviews, marketing strategies, seasonal variations, etc.

Knowing your competition will help you identify or develop unique selling points that differentiate your business from others.

3. Get the necessary licenses and permits

Every business has specific legal, tax, safety, zoning, and countless other regulations. Keeping up with regulatory requirements and licensing & permitting requirements can save you time and trouble in the future.

When your business is ready to grow and scale, you want to avoid getting stuck in some paperwork, right? That’s why getting over with the licensing paperwork beforehand makes total sense for seamless business planning and operations.

4. Decide your service offerings

This one’s a no-brainer. Although you’ve decided to start a vacation rental business, there’s more to it regarding products and services.

Finalizing your services helps you get clarity in your business concept, pricing strategy, revenue streams, marketing and branding, and operations planning.

In short, it’s a must for precise business and financial planning.

Now that we discussed the pre-preparations, let’s check out and understand the vacation rental business plan outline.

Vacation Rental Business Plan Outline

Need help planning your rental business plan structure? Look no further. Here’s a detailed outline for a comprehensive rental business plan. You may use it as it is to outline or structure your plan.

Here. Check out this detailed business plan outline to get a high-level overview of your business plan. We will discuss its sections in detail as we follow, so do not worry!

  • Mission Statement
  • Vision Statement
  • Customer Focus
  • Success Factors
  • 3 Year profit forecast
  • Business Structure
  • Startup Cost
  • Funding Required
  • Products and Services
  • Market Trends
  • Target Market
  • SWOT Analysis
  • Phone Prospecting
  • Public Relations
  • Advertising
  • Ongoing Customer Communications
  • Pricing Strategy
  • Important Assumptions
  • Brake-even Analysis
  • Profit Yearly
  • Gross Margin Yearly
  • Projected Cash Flow
  • Projected Balance Sheet
  • Business Ratios

Now, let’s understand how you would write each business plan section in detail.

1. Executive Summary

The executive summary would be the first section for your investors to read, but you will write it at the end when your entire plan is ready.

Reason? It is the first section of your plan that summarizes the entire plan for your readers. However, writing your plan summary would be more convenient when you have the entire doc ready.

Your executive summary may include details about your business concept, types of rental properties, your target customers, competitive landscape and USPs, market opportunity, and financial highlights.

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vacation property business plan

2. Company Overview

We will briefly cover the company overview in the executive summary, but this is your opportunity to present your business concept in detail.

Provide a detailed company overview, starting from business concept and location, followed by vision, mission, legal structure, company founders, and future goals.

This section is critical for readers to understand your business, so make sure it is engaging, to the point, and accurately presents your business.

3. Market Analysis

We talked about market research and analysis earlier in this article, and we’ll now put the research we conducted to use.

Your market analysis section should provide a thorough understanding of your target market, market size & growth potential, competitors, key market trends, and regulatory environment.

Remember, the core purpose of this section is to provide readers with an understanding of the vacation rental industry, competitive landscape, and industry-specific factors affecting business success.

4. Service Offerings

Vacation rental businesses offer various services like property rental, cleaning and maintenance, entertainment, and luxury amenities. This is the section where you should mention all your service offerings.

Here are some of the most common vacation rental service offerings:

  • Property rental—apartments, villas, cottages, etc.
  • Rooms rental—individual rooms within a larger property.
  • Special event hosting
  • Local recommendations & Transportation
  • Cleaning and maintenance

5. Operations Plan

The operations plan section of your plan provides insights into your day-to-day business operations.

For instance, consider including details like how many employees you plan to hire, how will you handle administrative duties, and keep track of inventory.

Consider asking yourself some of these questions to plan this section:

  • Do I need to hire employees?
  • Who will be responsible for managing and tracking inventory?
  • What would be the booking and registration process?
  • Can I handle the business finances or I’d need an accountant?

Answering such questions will help you draft an operational plan with precision.

6. Marketing Plan

This section will provide strategies you’ve decided to market or promote your business. Your strategies may include online and offline marketing or external promotional campaigns.

For instance, your online marketing strategies may include generating bookings through travel websites, personal vacation rental sites, and Google Ads. In contrast, the offline strategies would consist of printing and leaving flyers in local tourist offices, collaborating with local businesses, and providing a referral program.

The marketing plan helps your investors understand how you’ll promote your business and generate bookings, making it essential to consider.

7. Management Team

Strong management is critical to your vacation rental’s success. And, as the name suggests, you would introduce your management team in this section. Introduce vacation rental founders, key executives, the general manager, and the rest of the management.

Explain how each member fits and what responsibilities they will take care of. Consider including a resume-styled summary for each person in your vacation rental business plan.

8. Financial Plan

The financial plan is the most essential section of your vacation rental plan. Generally, your financial plan section should provide a summary of your business’s financial projections for the first few years.

Following are some of the critical statements and reports you should consider including in your financial plan:

  • Profit and loss statement
  • Balance sheet
  • Cash flow statement
  • Break-even analysis

Besides these financial statements, you should also include your financial requirements, startup costs, scenario analysis, and revenue & sales forecasts.

Download Sample Vacation Rental Business Plan

Do a business plan outline but need a sample plan to get started? Here you go, download our sample vacation rental business plan pdf , import data directly into the Upmetrics editor, and start writing your plan.

This ultimate template with step-by-step guidance helps entrepreneurs create investment-ready business plans to secure funding, business loans, and government grants and can help you as well.

The Quickest Way to turn a Business Idea into a Business Plan

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Drafting a comprehensive business plan that draws investors in is no easy feat—it needs some serious work. But, you must take the first step and get ahead of your competitors. Upmetrics could be a great companion in the process.

Upmetrics is a modern and AI-powered business plan software that helps new-age entrepreneurs create comprehensive business plans in no time.

From step-by-step guidance to a financial forecasting tool and business plan builder, Upmetrics has everything to make business planning easier for you.

So what are you waiting for? Start preparing your vacation rental business.

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Frequently asked questions, why do you need a vacation rental business plan.

Having a comprehensive business plan is a must to ensure vacation rental business success. It will be your guide in starting, operating, and marketing. Furthermore, it also plays a crucial role in securing funding for your business.

Is starting a vacation rental business profitable?

The leisure and hospitality industry is recovering and expected to grow at a compound annual growth rate of 4.7% from 2023 to 2030. So, starting a vacation rental business would make a profitable investment.

Furthermore, a 10-20% return on investment from your vacation rental property is considered a good profit margin.

What is the easiest way to write a vacation rental business plan?

Using Upmetrics’ business plan template is the easiest way to write a business plan. Simply export the template into the editor and update it according to your requirements. You can easily finish your plan in just a few hours or less with this AI-powered business planning solution .

What to include in your vacation rental business plan?

These are the key components your vacation rental business plan must include:

  • Executive summary
  • Business Overview
  • Market Analysis
  • Service offerings
  • Sales and marketing strategies
  • Operations plan
  • Management team
  • Financial plan

How is a vacation rental business plan template helpful?

Having a vacation rental business plan template can be incredibly helpful in writing a plan. You can use this as a reference point while writing instead of starting from scratch. All you need to do is—export it to the Upmetrics editor and start making the necessary updates.

About the Author

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Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Vacation Rental Business Plan: A Step-by-Step Guide

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Vacation rental business plans are the strategic foundation for entrepreneurs venturing into the burgeoning world of holiday accommodations. As travelers increasingly seek a unique, home-like guest experience over traditional hotels, the market's potential grows. However, navigating this industry requires a solid roadmap. A robust business plan offers this, encapsulating market analysis, financial forecasts, operational strategies, and marketing approaches .

Continue reading to discover the importance of a vacation rental business plan and how you can put one together yourself.

What is a vacation rental business plan?

A vacation rental business plan is a blueprint for launching and growing a successful enterprise in the rental market. It identifies your target audience, specifics about your vacation home, and marketing tactics. The plan also dives into financial details, highlighting startup expenses, projected income, and routine costs. Operational procedures are laid out, including vacation rental management , customer care, and handling challenges.

Essentially, it’s your guide to understanding the market, ensuring profitability, and navigating any hurdles. By laying down clear goals and strategies, this plan is crucial for anyone serious about the vacation rental business.

vacation property business plan

Why a business plan is crucial for your vacation rental business

Roi expectations.

A rental property business plan is vital for gauging ROI in the vacation rental arena. This strategic document illuminates your initial outlay, ongoing costs, and potential income, offering a clear lens into your venture's profitability and the timeline to recoup investments.

With these insights, you can deftly allocate funds to accommodation enhancements , set dynamic pricing, and determine marketing allocations. A robust business plan ensures you get the best bang for your buck in your vacation rental property business, directing each expenditure towards maximizing returns.

Risk assessment

A well-structured business plan is a cornerstone for the vacation rental industry, primarily due to its role in risk assessment. By pinpointing possible market challenges—from shifts in tourist preferences to evolving regulations—you're better poised to strategize effectively.

This proactive approach means you can devise plans to counteract these challenges, manage resources efficiently, and set up safety nets for unforeseen downturns. A comprehensive business plan empowers you to sail through the vacation rental industry's complexities, armed with insight and readiness.

Securing investments

A robust business plan is a linchpin for vacation rental ventures, particularly when attracting investors. Such a plan lays out a coherent vision, demonstrating the potential for profit and strategies to mitigate risks. It assures investors of your market savvy, readiness for challenges, and dedication to the venture's success.

This clarity and foresight not only builds trust but also enhances your appeal to potential funders. An effective business plan can be the difference between securing crucial capital and facing missed opportunities in the competitive vacation rental space.

vacation property business plan

Components of a vacation rental business plan

Use this basic rental business plan template, including all the following components:

Executive summary

The executive summary serves as the gateway to your short-term rental business plan. This section offers a succinct glimpse into your business, encompassing its essence, goals, and the property's prime location details. Key financial expectations are also touched upon.

Designed to pique the interest of potential investors or partners, it paints a vivid picture of your venture's promise and direction. Think of the executive summary as your business's elevator pitch, encapsulating its most compelling aspects in a brief, engaging manner.

Market research and analysis

The market research and analysis section is a foundational pillar of a vacation rental business plan. This segment dives deep into the industry's landscape, pinpointing key demographics and evaluating the ebb and flow of demand.

By exploring elements like travel trends, customer inclinations, and competitor benchmarks, businesses can uncover unique market niches and opportunities. Armed with this knowledge, short-term rentals can craft offerings that resonate with potential guests while differentiating from rivals. In short, this section equips the business with the tools to carve a distinct, successful niche in the bustling vacation rental market.

Business model

The business model section is very important in a vacation rental business plan. Here, the plan demystifies how the venture functions and turns a profit. It charts out details from property acquisition—whether owned or leased—to how pricing is determined.

The strategy for filling rooms, be it through direct customer engagement, digital platforms, or agencies, is laid out. It also shines a light on diverse revenue avenues, factoring in seasonal surges or special promotions. This segment offers a transparent view of the operational gears and revenue pathways of the vacation rental endeavor.

Marketing and sales strategy

The marketing and sales strategy section of a vacation rental business plan charts the course for drawing guests and securing bookings. This part highlights the mix of promotional methods, from digital efforts like social media blitzes and SEO to traditional approaches like flyers and community collaborations. It delves into pricing methods, special deals, and schemes to reward loyal guests.

By targeting specific audiences, spotlighting unique offerings, and selecting the most effective sales channels, this section offers a clear blueprint for building brand visibility and fostering customer loyalty in the vacation rental market.

Financial projections

In a vacation rental business plan, financial projections serve as a compass, pointing to the venture's anticipated financial health over the next 3-5 years. This section sketches out expected revenues, balances them against forecasted expenses, and hints at potential profitability.

With insights into factors like anticipated occupancy, seasonal rate adjustments, startup costs, and ongoing upkeep, stakeholders can discern the business's potential. In essence, these projections illuminate the path to profitability, giving stakeholders a clear snapshot of financial prospects and guiding sound investment choices.

Funding requirements and strategy

In a vacation rental business plan, the section on funding requirements and strategy highlights the capital necessary for the business's ambitions. It breaks down the amount needed, categorizing expenses such as property purchases, refurbishments, promotional activities, or daily operations.

Beyond just stating the needs, this section also presents how the business intends to gather the capital, be it via loans, partnering with investors, tapping into crowdfunding, or utilizing personal funds. This key segment paints a clear picture for potential backers, detailing how their funds will be employed and the overarching financial game plan of the venture.

vacation property business plan

Creating your vacation rental business plan

Once you have your vacation rental company business plan outline, you can start putting together the real thing:

Conduct a SWOT analysis

Drafting a vacation rental business plan necessitates a keen understanding of your venture's standing, achieved effectively through a SWOT analysis.

  • Strengths: Pinpoint your standout features. Maybe it's a coveted property location, distinctive amenities, or ties with local attractions. These strengths shape your unique selling proposition.
  • Weaknesses: Identify potential pitfalls or areas needing improvement. Perhaps it's a nascent marketing strategy, over-reliance on peak tourist seasons, or looming regulatory hurdles.
  • Opportunities: Spot external growth avenues. This could involve capitalizing on rising market trends, forging new local partnerships, or tapping into niche traveler segments.
  • Threats: Gauge external challenges. Consider factors like burgeoning competitors, shifting local tourism policies, or broader economic factors affecting travel.

By mapping out these elements, the SWOT analysis offers a holistic insight into your business, paving the way for informed planning and foresight.

Determine your unique selling proposition (USP)

To set your vacation rental apart, identifying a clear unique selling proposition (USP) is key.

  • Reflection: Start with introspection. What's unique about your property? It could be its prime location, its rich history, or the bespoke services you offer.
  • Competitive Insight: Research rival offerings. Spot what they might be missing and consider how your property fills that void or offers something superior.
  • Guest Insights: Harness customer reviews from previous guests. Their praises can hint at what sets you apart and should be accentuated in your USP.
  • Simplicity: Distill your USP into a concise, impactful statement. It should instantly convey your property's edge to potential guests.
  • Branding Consistency: Your USP should thread through every marketing piece and communication to ensure a cohesive brand image.

A well-defined USP can be your property management compass, guiding your marketing efforts and appealing directly to your desired audience, giving you a competitive advantage.

Create financial models

Constructing a robust pricing strategy is pivotal for your vacation rental business plan, guiding its fiscal journey.

  • Initial Outlay: Start by tallying the upfront costs. This encompasses property purchases, refurbishments, and initial administrative expenses such as permits.
  • Ongoing Expenses: List regular outflows like utilities, maintenance, staffing, and promotions.
  • Income Estimations: Anticipate your income by considering factors like rental prices, expected occupancy rates, and ancillary revenue sources, such as special events.
  • Reaching Profitability: Identify the point where revenues surpass expenses, signifying the break-even mark.
  • Safety Net: Strategize for unforeseen expenditures or revenue slumps, ensuring you’re financially cushioned against uncertainties.
  • Financial Forecast: Offer a synthesized view of projected financial health, usually spanning 3-5 years.

With this fiscal framework in place, you anchor your venture in economic reality, allowing for proactive responses to potential financial scenarios.

Design an operational plan

Creating an operational plan is fundamental to the efficiency of your vacation rental business.

  • Management Choices: Choose between self-management or employing a property manager/using a property management software like Hospiria for tasks like bookings, communications, and maintenance.
  • Routine Upkeep: Plan consistent maintenance activities, from cleaning to landscaping, to ensure the property remains inviting.
  • Team Assembly: Define required roles, from housekeeping to guest relations. Outline hiring criteria, training initiatives, and staff retention strategies.
  • Tech Deployment: Pick out essential software and digital tools for tasks such as reservations, feedback management, and promotional activities.
  • Vendor Relations: Identify dependable suppliers for essentials like linens or amenities. Explore opportunities for discounts or partnership deals.
  • Crisis Management: Formulate action plans for unforeseen challenges, be it property damages or guest-related issues.

With a structured operational blueprint, you lay the groundwork for seamless operations, guaranteeing guest satisfaction and optimizing business performance.

Write an executive summary

The executive summary is the gateway to your vacation rental business plan, offering a snapshot that draws in readers.

  • Opening: Start with a brief introduction to your business, its vision, and the unique proposition it offers to the market.
  • Operational Blueprint: In a nutshell, describe how the business functions, from services to revenue streams.
  • Market Potential: Highlight the specific market niche you're targeting and why there's a demand for your offering.
  • Core Advantages: Emphasize standout features, be it a unique location, top-tier amenities, or unmatched guest satisfaction.
  • Financial Overview: Give a brief insight into expected revenues, projected costs, and when you anticipate breaking even.
  • Closing Thoughts: Reaffirm the promising prospects of your venture and your dedication to making it thrive.

When done right, the executive summary piques interest, prompting readers to explore the finer details of your business strategy.

vacation property business plan

Mistakes to avoid in your vacation rental business plan

Lack of research.

The foundation of a successful vacation rental business plan can be significantly weakened by a lack of research.

Understanding market dynamics is fundamental. By not diving deep into the needs and wants of the target market, there's a risk of misaligning the services offered. Similarly, without a detailed look at the competition, one may overlook potential challenges or fail to distinguish their rental in a saturated market.

Economic trends play a pivotal role in shaping travel habits. Being unaware of these patterns, especially during financial downturns, might result in reduced patronage. Equally important is knowledge of local regulations. Failing to adhere to area-specific rules can lead to unforeseen legal issues and potential fines.

Lastly, staying attuned to the evolving expectations of guests is crucial. An outdated property or an ill-conceived pricing model could lead to decreased bookings and diminished returns. In essence, thorough research is the backbone of any robust vacation rental business plan.

Overestimating revenue

In the realm of vacation rental business planning, overestimating revenue is a frequently encountered misstep with significant repercussions.

It's natural for entrepreneurs to approach a new venture with enthusiasm, but when this translates into unrealistically high revenue forecasts, problems arise. Setting rates beyond market demand or counting on overly optimistic occupancy rates can lead to a cycle of unoccupied properties or recurrent price adjustments, negatively impacting profits.

Such overblown revenue expectations can also prompt overspending, anchored on projected earnings that may never materialize. This financial misalignment leaves businesses vulnerable during slow seasons or unforeseen setbacks.

Moreover, stakeholders and investors depend on accurate financial forecasting. If actual earnings consistently fall short of projections, their confidence may wane.

While optimism is commendable, it's vital to base revenue predictions on comprehensive market analysis and realistic assumptions, fostering both financial stability and credibility.

Underestimating costs

A major pitfall in vacation rental business planning is underestimating costs, an error that can set a venture on shaky financial ground.

At first glance, launching a vacation rental might seem simple. Yet, beneath the surface lie several often-overlooked expenses. These aren't just the obvious ones like routine maintenance. There are unpredictable repair bills, costs for periodic accommodation enhancements, and even seasonal upticks in utility bills.

Added to these are regulatory expenses. From licensing fees to local tourism levies, the tally can rise quickly if not thoroughly accounted for. And let's not forget the initial outlay for marketing, listing fees on an online booking platform, and the often-underestimated costs of acquiring guests.

Misjudging these expenses can throw off financial projections, endangering the business's early stages. Moreover, stakeholders value precise financial foresight, and repeated budgeting errors can diminish their confidence.

vacation property business plan

Tools and resources for building your plan

When creating a business plan, including one for a vacation rental, utilizing the right tools and resources can streamline the process and enhance the quality of your plan. Here are some tools and resources to consider:

  • LivePlan: Offers step-by-step guidance and financial forecasting.
  • Bizplan: Breaks down your plan into manageable tasks with progress tracking.
  • Statista: Provides statistics on various industries, including travel and tourism.
  • Google Trends: Offers insights into search trends relevant to vacation rentals.
  • Microsoft Excel or Google Sheets: Both have templates for financial projections.
  • Quicken: Helps in managing and projecting cash flow.
  • Trello: Useful for task management and tracking progress.
  • Asana: Enables you to break down tasks and assign responsibilities.
  • Bplans: Offers free sample business plans and guides.
  • SCORE: Provides mentorship and has a library of free templates and tools.
  • Local Chambers of Commerce: May provide data on local tourism and travel trends.
  • Local Libraries: Often have access to market research databases.
  • LegalZoom or Rocket Lawyer: Offer resources and services for setting up the legal structure of your business.
  • Local government websites: Provide information on regulations, permits, and licenses.
  • PeerSpace or Meetup: Connect with local business groups or entrepreneur meetups to get feedback.
  • Local universities: Business schools might offer consulting projects where students review business plans.
  • SEMrush or Ahrefs: Offer competitive analysis tools for digital marketing strategy.
  • SurveyMonkey: Useful for conducting market research surveys.

Crafting a comprehensive vacation rental business plan is essential. Acting as a guiding blueprint, it encompasses in-depth research and astute financial forecasting, positioning the business for success. Such a plan not only paves the way for informed decisions but also attracts potential investors, offering a competitive edge in the bustling rental industry.

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A Powerful Vacation Rental Business Plan (12 Tips for Growth)

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Are you ready to grow your vacation rental business? Scaling a business is no small feat, but it’s absolutely possible with the right tools and systems in place. Below, find 12 helpful tips for scaling your vacation rental business and continuing to grow and succeed as a vacation rental owner.

1.  Set Goals and Strategies

2.  start local, 3.  look into nearby markets, 4.  build a reliable team, 5.  know all rules and regulations, 6.  automate repetitive tasks, 7.  find a pms that fits your needs, 8.  hire a professional bookkeeper, 9.  use dynamic pricing, 10.  don’t forget the guest experience, 11.  get to know your rental locations, 12.  maintain consistent branding, main takeaways.

The first thing you’ll want to do if you’re thinking about scaling your business is to set specific goals with detailed strategies to achieve them. It’s best to use SMART goals for this purpose.

SMART goals are goals that are Specific, Measurable, Achievable, Relevant, and Time-Bound. Specific means that your goal needs to be very clear. You should be able to explain what you want to achieve, why you want to achieve it, and which resources are involved.

Measurable means that the goal is easy to track and that you can assess your progress toward it. When a goal is measurable, you can answer the questions, “How much?” “How many?” and “How will I know when I’ve accomplished this?”

Achievable means your goal is realistic and attainable, rather than being an impossible dream. Meanwhile, Relevant means that the goal matters to you and aligns with where you are currently. Finally, Time-Bound indicates that your goal has a date by which it should be completed.

Non-SMART Goal: I want to scale my vacation rental business.

SMART Goal: I want to scale my vacation rental business by purchasing two additional vacation rental properties within the next year.

Once you’ve established your goals, it’s beneficial to set up strategies to achieve them. Check out our detailed guide on vacation rental business strategies .

When scaling your vacation rental business, you’ll want to start locally in the area where your existing vacation rental property is located. Start out with three to five total properties in the same general area. This will be much easier to manage than five properties that are spread hours apart. You’ll be able to stop by the different properties as needed while you’re getting them up off the ground.

Start Local

With multiple vacation rental properties in the same area, you can also take advantage of the concept of economy of scale. This refers to buying products and services in bulk so that they’re cheaper. For example, consider the cost of hiring one cleaning company to clean your vacation rental in one city and hiring another cleaning company to clean your second vacation rental in another location. This will be much more expensive than hiring one cleaning company to clean two vacation rentals that are located close together.

Once you’ve achieved a thriving local business with three to five properties, it’s time to expand into a nearby market. Start off with a single property in this new market until you have it running successfully. It’s best to choose a nearby market because it’s easier to manage multiple properties that are close together, rather than ones that are far apart. In addition, since you’ll already be familiar with the nearby area, it’ll be much easier for you to get to know the new market you’ve expanded into.

While you may want to do everything on your own, it’s just not possible for a single person to successfully scale a vacation rental business. There isn’t enough time in the day for you to complete all the work that will need to be done! That’s why it’s so important to find a team that you can trust and rely on. Typically, this team will consist of a cleaning crew and maintenance personnel. Depending on the size of your vacation rental business, you may also want to hire a property manager to help you out with the day-to-day tasks of running vacation rentals.

When you’re scaling your vacation rental business, it’s crucial to research all of the local rules and restrictions regarding vacation rentals. You’ll need to figure out if any permits are required and if there are any homeowners association conflicts as well. This isn’t as frequently discussed as other aspects of scaling your business, but it may be the most important. If you break laws and fail to follow regulations, your vacation rentals can potentially be shut down.

Automate Repetitive Tasks

Automation is key when scaling your vacation rental business. When you automate, you save time and effort, freeing up your schedule so that you can focus on the aspects of the business that matter the most. You can automate everything from guest communications, rental cleaning checklists , and various reports to your crew’s schedule. A good property management system can really come in handy since most come with automation tools built-in.

Regardless of their size, all vacation rental businesses can benefit from using a property management system or PMS. This is a type of software that puts all of your bookings in one place. Typically, a PMS also has a unified inbox where all of your guest communications are located. It allows you to create reports and use various accounting tools. It can even control your listings on multiple channels from one central location. There are many different property management systems out there, and they all have different features and costs associated with them. Take the time to do some research and determine which PMS is best for your vacation rental business.

Sometimes, a property management system won’t offer all of the data and reports you’ll need to successfully run your growing business and keep track of its progress. This is when it’s helpful to hire a professional accountant or bookkeeper to help you keep track of your cash flow. When you’re keeping track of everything yourself, there’s a larger margin for error, but a professional bookkeeper will have the education and experience to do everything correctly and keep your finances well-organized.

When scaling your business, you can increase your revenue by using a dynamic pricing strategy. This means that your prices will change based on changes in demand in the area. Tools like AirDNA are very helpful in automatically adjusting your vacation rental pricing and helping you make the most of your vacation rental business.

Don’t Forget the Guest Experience

When you’re scaling your business, it’s easy to become much more focused on the business aspect of things, rather than the guest experience. However, this is exactly what you don’t want to do, since the guest experience is essential to earning positive reviews that will bring in more bookings. The real success lies in providing an amazing experience to your guests, rather than focusing on all the behind-the-scenes factors that go into the vacation rental business. Strive to find a good balance between running the business and ensuring your guests have a great time. If you’re struggling to find this balance, then hiring a property manager might be a wise choice for you. That way, they can focus on your guests while you can put your energy into continuing to scale your vacation rental business.

When scaling your vacation rental business, it’s essential to get to know every area where you have vacation rentals. Guests love the “live like a local” experience and are sure to ask you for recommendations. It’s important to know the area well so that you can offer them reliable suggestions and so you can put together a comprehensive welcome binder filled with local restaurants, entertainment, and more. To become a successful rental owner you must keep your guests satisfied. 

If you’re utterly clueless about the area, that can reflect negatively on you and your vacation rental business as a whole, even if the property itself is excellent.

Branding is key to your success when you’re scaling your vacation rental business. Keep your branding consistent across your vacation rental websites, social media profiles, and anywhere else your company is online. Branding allows guests to recognize your company. Having a consistent brand can cause guests who have stayed at one of your rentals to be more likely to stay at others because they already know and trust your brand. If you can maintain your rental business branding properly, you will get opportunities of building wealth through rental properties .

Here are our 12 tips for scaling your vacation rental business:

  • Set goals and strategies using the SMART goal method.
  • Start local with three to five properties before expanding to a new area.
  • Look into nearby markets rather than areas that are hours away.
  • Build a reliable team that you can depend on.
  • Know all rules and regulations for every area where you have a vacation rental.
  • Automate repetitive tasks so that you can spend your time on the more critical parts of your business.
  • Find a PMS that fits your needs so that you can keep your business organized.
  • Hire a professional bookkeeper to keep track of your finances.
  • Use dynamic pricing to make the most of your vacation rental properties.
  • Don’t forget the guest experience because you’re too focused on the business end of things.
  • Get to know your rental locations so that you can offer good recommendations to your guests.
  • Maintain consistent branding across your website and social media profiles.

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Vacation Rental Business Plan: Step by Step Guide

Vacation Rental Business Plan: Step by Step Guide

Are you thinking of investing in a vacation rental or maybe owning a property you’d like to use for vacation rentals? Well, before taking a huge leap into buying a property or investing in this fast-paced and booming business, it is important to take a step back and consider that there are many factors to take into account. As much as it is great to invest in a vacation rental business- decisions are not made overnight.

First and foremost, it is crucial to develop a vacation rental business plan that will allow you to identify potential risks beforehand. Take note, a well-thought-out vacation plan is a key to ensuring and determining the chances of achieving success as a host and in your business. More so, a strategic business plan will help secure funds from investors to develop your business.

Without further ado, let’s dive in:

  • What is a vacation rental business plan?

Why is it needed?

  • A recipe to a good vacation rental business plan
  • Common mistakes to avoid in a vacation rental business plan
  • Steps to building a vacation rental business plan

What is a Vacation Rental Business Plan?

In simple words, a vacation rental business plan is a set of rules and practices, goals, and frameworks that will help you make intelligent decisions beforehand ensuring your business is on the right path.

And not only is it a useful tool to refer back time and time again, but it also helps to rely upon and identify risks, plan and strategize on how to run your vacation rental business guaranteeing it’s worth the revenue.

It’s thrilling and exciting when buying your first property especially to property investors - who wouldn’t? They are eagerly ready to hit the ground and get the business up and running. However, keep in mind, before diving in, the vacation rental business plan is what’s going to ensure that you maximize your profits, set measurable goals, keep you on the right track, and accurately measure success.

Think about it - Without a business plan, it is like jumping into a pool of unpredictable risks and losses. A business plan is what keeps your business in place. For example, how do you know if your average daily rate is too low or whether you are spending too much on marketing? Remember, with a good vacation rental plan, your business will blossom and earnings will be tenfold than expected.

A Recipe to a Good Vacation Rental Business Plan

The secret to any good business is timing. Honestly, who wants to be in a mountain of debt? Nobody! Running a vacation rental is no small project. It takes a lot of effort, research, and process. Therefore, before jumping into the deep end, it is highly recommended that you draw up a business plan to truly judge whether your investment is worth the while.

Apart from that, ask for experts’ advice; those who have clearly proven success and have experience in the vacation rental market. Remember, a well-thought-out business plan is what justifies your means as well as guarantees a secure and blossoming investment.

Common Mistakes to Avoid in a Vacation Rental Business Plan

Targeting everyone.

As your first business venture, it is common and understandable to want to welcome as many types of guests as possible but expect that you might not attract everyone.

Keep in mind, your vacation rental is not everyone’s cup of tea and that is perfectly alright. It’s better to narrow down your target niche and focus on that because you add more value to your vacation rental than having to attract none.

Ignoring the competition

Do not be overconfident that your vacation rental is the best value in the area. Be aware, other competitors in the market feel the same way and just might be better in price, style, availability, uniqueness, and might as well be everything; in comparison to your short-term rental. Therefore, try to assess your rivals and strategize on how you can outdo other vacation rentals that put you at an edge in the market.

Unrealistic financial plan

When venturing into your first business, it is common to dream big and want to make millions but take note, it will not happen overnight and neither in the first year of the business.

As great as it is to think positive and aim high, keep in mind when it comes to money, you need to be realistic. It is important to not overestimate your overall profits and underestimate your budget.

Steps to Building a Vacation Rental Business Plan

1. executive summary.

The title may sound intimidating but don’t let that fool you. An executive summary is an overall glimpse of what your business has to offer and why it is worth the investment. To put it simply, your executive summary is the cherry on top of the icing.

In simple words, it sums up what your vacation rental business plan is - which includes information about your properties, employees, future goals, prior success and accomplishments, and third-party vendors.

More importantly, the trick to outlining your summary is asking yourself the 5W’s and 1H (who, what, where, when, how, and why).

Property location:

  • Is it by the seaside?
  • It is located in the city center, a short walking distance from tourist charms?
  • Is it located in the countryside?

Property type:

  • Is the vacation rental family-friendly? Pet-Friendly?
  • Is it a bachelor pad or intended to cater to business travelers?
  • Is it a large, beach cottage- summer rental, or tent cabin?
  • Is it Eco friendly?

Target audience:

  • Is it targeted to attract families?
  • Perfect for couples?
  • Is your vacation rental suited for large groups?

Peak season and weekdays:

  • Is it designed for summer or winter?
  • Suitable all year round?
  • Any festivals or events?
  • Is it suited for business trips?

Reasons for the source of income:

  • Is it for the extra income?
  • Is it for your future pension when retiring?
  • The main source of income?

2. Business Goals

Business goals are indicators of what success in your business appears like. Are you happy with the number of return guests? Are you content with a few bookings of the month?

Goals are what help identify steps and track the progress of your business. More importantly, business goals motivate you to achieve the ultimate which is a significant role in your vacation rental business plan. But for that to happen, business goals must be written realistically and detailed. Take note, an unclear goal is harder to achieve. Other than that, it’s ideal to give goals some sort of a deadline to accomplish what you aim for.

3. Value Proposition

Think about what makes your vacation rental different, who and what type of target guests you hope to attract, and how the business stands out from the other rental properties in the market.

In simple terms, the value proposition is the unique selling point of the business by knowing what are the strengths and using them to highlight to your advantage. Doing so will attract more guests and maximize your occupancy though keep in mind to do a thorough in-depth analysis beforehand that will help improve your unique offerings and achieve a profitable business.

4. Management Structure

Business management structure ideally explains the structure of the company whether it is a partnership or single owned individual, living up to its potential. Adding on, what is the current state of the business, and what property management services will you use?

To sum up and simplify, this section describes the business management structure that will help improve productivity as well as ensure all the members of the company accomplish their true capabilities.

5. Operations Plan

In this section, your operations plan is an insight into how your business will run. It is a simple part of your business plan as you most probably have even already planned it in your head.

More so, day-to-day activities include hiring new staff- do you need to outsource additional staff to help spread out responsibilities especially if you are having multiple properties, or do you want to take a role in being heavily involved in the business? How to keep track of your inventory or manage guest services? What about maintenance and cleaning , administrative duties, managing taxes, insurance , licenses, and third-party services such as property management software , etc.?

These are just a few questions to keep in mind when operating your vacation rental business. Additionally, think about how your current setup is and whether you require more improvements needed as you expand the business.

6. Financial Plan

In this section, think about how do you plan to finance the business ? Are you self-financing it or taking it out on a loan? Also, consider what the interest is like or what level of monthly payments can you manage?

Either way, the financial section outlines all the financial aspects of your business as well the history by discussing all of your previous success and how today it led to the state of your business.

Additionally, when creating a detailed financial plan and projections, it also includes:

  • 12-month profit and loss projections
  • 5-year financial growth
  • An estimated balance sheet of expenditures
  • Cost analysis

Take note, when acquiring funds or investors, it’s more ideal to work with an accountant to ensure that your documents meet the financial reporting standards required by the commercial lenders.

7. Marketing Strategy & Distribution Plan

This section plays an important role in your business plan, especially for all new hosts. Take note, the presence of OTAS’s and listing sites like TripAdvisor , Booking.com , Airbnb are quite essential for your business. Therefore, your distribution plan should consider which channels will you be advertising, how much they cost, how will you handle channel management , and when you get a booking, what are the terms of payment- is it PayPal, bank transfer, or cash/card? Note that, your distribution plan will benefit you from understanding how you will advertise your business in order to generate bookings .

More so, your marketing strategy should cover tactics on how will you market your vacation rental to key targets which include both online and offline marketing such as what social media platforms will you use, will you design and print flyers for local tourist boards, invest in paid advertising, etc. Doing so will help you achieve booking and increase the occupancy rate in the future.

8. Revenue Management Plan

When running a vacation rental business, you need to be on top of your ongoing expenses, incoming profits, and not to forget the overall finances of your business. Apart from that, you also have to include details of rates you aim to charge per night along with yield management and pricing tools you aim to use.

More so, remember to also include taxes, utility bills, staff costs, and your target monthly income in your revenue management plan. It might sound overwhelming to think about it but fear not as there are software tools such as QuickBooks to help with your revenue management plan.

9. Customer Analysis

How your business makes money is through your guests or customers. Without a doubt, it is significant to understand and know your audience, as well as their wants/needs, to help run a successful short-term rental business.

With that said, in this section, customer analysis is really where you describe and identify your ideal guest including creating different buyer personas based on the types of guests or customers that your business attracts or aims to attract.

More so, when building a detailed profile of ideal guests include information such as their names (fictional names), age, income, profession, or whether they are a family or not? These are just a few get-to-know information that will help you understand what type of guests to target and how.

Take note, to achieve more bookings, these guest profiles created can be used time after time in all aspects of your business. And with good customer analysis, you will identify and understand what to expect from your guests, their likes/dislikes about your vacation rental property.

10. Competitive Analysis

Other than understanding your own business and market, it is also important to carry out competitor research for your vacation rental business in order to thrive and help win booking over the competition.

Investigate and do thorough research of who the other local short-term owners are and how they do their work. Apart from that, find out and analyze what is the pricing strategy of the other competitors, who their target customers are, what additional services and amenities do they offer and if so, what are they? And also, what type of OTAs do they use for booking and marketing?

By doing a competitive analysis, you will understand and strategize on finding opportunities for your business to be on the top of the game. More so, there are some great software tools to help out in data analysis.

11. Milestones

Think about the future of your vacation rental business and how you can expand it further. More so, what are the plans and goals as well as key milestones in accomplishing these targets such as how much do you want to take a month or how many guests do you plan to host in the first quarter, and so forth.? You may also want to include:

  • Optimizing your daily workflow
  • Offering more amenities and services
  • Increasing net income
  • Minimizing expenses
  • Increase occupancy rate
  • Expanding more properties

With that said, key milestones and goals are a useful tool to refer back and keep track of the progress as well as ensure you're in the right direction. After all, it is easy to remain where you are if no goals are set.

12. Appendix

To help keep things running in a business, only the most vital information must be included in your business plan that is valuable to your business. More so, add an appendix for any supporting documents or information needed so that you do not require to look around when it is required such as tax information, or contacts when maintenance is required. This also includes:

  • Contracts with third-party vendors
  • Receipts and/or records of business purchases
  • Tax registration details
  • Information for maintenance and cleaning services, etc.
  • Letters of support
  • Vacation rental studies that you’ve cited in your business plan

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BusinessPlanTemplate.com - The World's Leading Business Plan Template Directory

Vacation Rental Business Plan Template [Updated 2024]

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Vacation Rental Business Plan Template

If you want to start a new Vacation Rental business or expand your current Vacation Rentals business, you need a business plan.

The following Vacation Rental business plan template gives you the key elements to include in a successful Vacation Rental business plan. It can be used to create a short term rental business plan, a long term rental business plan or a plan for any kind of vacation properties.

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

Below are links to each of the key sections of a business plan for vacation rental businesses. Once you create your plan, download it to PDF to show banks and investors.

I. Executive Summary – The Executive Summary provides a brief overview of your vacation rental property and your value proposition.

II. Company Overview – The company analysis includes a detailed overview of your business venture including your legal structure and vacation rental properties.

III. Industry Analysis – This section will include market research that provide insights into market trends and the vacation rental industry.

IV. Customer Analysis – The customer analysis provides an overview of your target customers and rental market.

V. Competitive Analysis – The competitive analysis will identify your direct competitors and highlight your competitive advantage and unique selling points.

VI. Marketing Plan – The marketing plan includes your marketing strategy and advertising tactics.

VII. Operations Plan – The Operations Plan will include information on your property management services, processes, business goals and milestones.

VIII. Management Team – The management team section includes your team’s backgrounds, qualifications, and responsibilities.

IX. Financial Plan – The financial plan includes financial projections, a cash flow statement, profit and loss statement and balance sheet.

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Vacation Rental Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan

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The Most Profitable Places to Own a Short-Term Rental

The housing market remains tight, but the price of entry is surprisingly low in many profitable vacation areas.

By Michael Kolomatsky

Finding a home has been so difficult lately. Is it worth buying one as a short-term rental? Yes — but not everywhere — suggests a report from AirDNA.

Revenues for short-term rentals faded in 2023 after two years of intense growth, but researchers at AirDNA expect those revenues to grow again in 2024. To locate the 25 best places in the country to buy a short-term rental, they created an “updated index” of Airbnb and Vrbo rental data for full single-family homes (the source of this week’s chart).

What may surprise you is that vacation homes in profitable areas are not always expensive. The typical home price (derived from the Zillow Home Value Index in December 2023) was found to be about $160,000 or less in two of the 25 areas on the list; under $250,000 in seven; and under December’s national median home price (roughly $418,000) in 17.

“A big piece of this is the big run-up of home values in the more traditional vacation rental markets that were also very attractive for people to live and work remotely during the pandemic,” said Jamie Lane, chief economist at AirDNA. In other words, higher demand in the most coveted vacation areas drove up home prices, cutting into rental profits.

As a result, he said, smaller cities “where we haven’t seen this much home-value appreciation” are reaping higher profits from short-term rentals.

Indeed, pricey areas that are popular as second-home and vacation destinations — Mr. Lane cited Joshua Tree, Calif., Breckenridge, Colo., and California’s Coachella Valley as examples — are conspicuously absent from this year’s list.

The study only considered markets with 500 or more listings. Areas with laws prohibiting short-term rentals were also omitted. To rank each market, 2023 rental demand and revenue growth since 2022 made up half of the score; the other half was based on an “investability” score largely derived by comparing typical home values relative to potential short-term rental profits.

Profitable Vacation Homes

The 25 cities best for investing in a short-term rental and the typical home price in each. Rankings were based on an AirDNA analysis of profits relative to home values, annual revenue growth and rental demand.

vacation property business plan

Columbus, Ga.

Ellsworth, Maine

Logan, Ohio

Spring Hill, Fla.

Sneads Ferry, N.C.

Winter Haven, Fla.

Stanton, Ky.

Port Angeles, Wash.

Akron, Ohio

Fairbanks, Alaska

Mineral, Va.

Fernandina Beach, Fla.

Anaheim, Calif.

Beaufort, S.C.

North Myrtle Beach, S.C.

Fennville, Mich.

North Las Vegas, Nev.

Wisconsin Dells, Wis.

Oneonta, N.Y.

Huddleston, Va.

Cocoa Beach, Fla.

Bradenton, Fla.

Largo, Fla.

Ashford, Wash.

vacation property business plan

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How to Buy a Home

With careful research and determination, the keys to that dream house can be yours..

Start by organizing your finances  and asking the right questions: Is homeownership right for you ? And can you afford to buy a house ?

Should you buy real estate with a friend? It might seem risky, but it could pay off .

Are you confused by all the new mortgage gimmicks being offered by lenders? Don’t worry, our guide can help .

Is it possible to buy a house in your 20s? The path to homeownership often involves a mix of diligent saving combined with help from family or government loans and programs .

Buying a vacant lot offers the chance to build a home on your own terms. Here is what to know if you choose that option .

To those looking to buy property as an investment, a tenant-occupied apartment can be appealing. Weigh the pros and cons carefully .

Bad credit? No savings? There are still ways for you to buy a home .

FinanceBuzz

FinanceBuzz

9 Hidden Costs of Owning a Vacation Rental (That Might Make You Want to Sell)

Posted: June 16, 2023 | Last updated: June 17, 2023

<p> Owning a vacation home is one way to <a href="https://financebuzz.com/lazy-money-moves-55mp?utm_source=msn&utm_medium=feed&synd_slide=1&synd_postid=10183&synd_backlink_title=make+extra+money+without+going+to+work&synd_backlink_position=1&synd_slug=lazy-money-moves-55mp">make extra money without going to work</a> every day. If you have the money to invest and do so wisely, vacation rentals can provide passive income. But too many people don’t fully understand all the costs involved with owning a vacation home, leaving them with unpleasant and costly surprises. And since the last thing you want to do when investing in a new business is lose money, knowing every cost can help you make the most of your investment.</p><p>  <p class=""><b>Read more:</b></p> <ul> <li><a href="https://www.financebuzz.com/shopper-hacks-Costco-55mp?utm_source=msn&utm_medium=feed&synd_slide=1&synd_postid=10183&synd_backlink_title=Learn+these+6+genius+hacks+all+Costco+shoppers+should+know.&synd_backlink_position=2&synd_slug=shopper-hacks-Costco-55mp">Learn these 6 genius hacks all Costco shoppers should know.</a></li> <li><a href="https://financebuzz.com/best-match-auto-insurance?utm_source=msn&utm_medium=feed&synd_slide=1&synd_postid=10183&synd_backlink_title=See+if+you%27re+overpaying+for+auto+insurance.&synd_backlink_position=3&synd_slug=best-match-auto-insurance">See if you're overpaying for auto insurance.</a></li> <li><a href="https://financebuzz.com/retire-early-quiz?utm_source=msn&utm_medium=feed&synd_slide=1&synd_postid=10183&synd_backlink_title=Check+out+these+legit+ways+to+make+extra+cash.&synd_backlink_position=4&synd_slug=retire-early-quiz">Check out these legit ways to make extra cash.</a></li></ul>  </p>

If you have the money to invest and do so wisely, owning a vacation home is one way to make extra money without going to work every day.

But too many people don’t fully understand all the costs of owning a vacation home, leaving them with unpleasant and costly surprises. 

Since the last thing you want to do when investing in a new business is lose money, knowing the following costs can help you make the most of your investment.

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<p> A vacation property is an investment just as your primary home is. You won’t want to skip the initial inspection. It helps you avoid unwanted surprises that could require a lot of money to fix. </p> <p> It’s also a good idea to have home inspections performed periodically. You’ll want to ensure your property is up to local and state codes, especially since you rent it to guests.  </p>

Home inspections

Just as your primary home is, a vacation property is an investment. You won’t want to skip the initial inspection. It helps you avoid unwanted surprises that could require a lot of money to fix.

It’s also a good idea to have home inspections performed periodically. You’ll want to ensure your property is up to local and state codes, especially since you rent it to guests.

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<p> Trying to battle a terrible landlord alone is tough. So, it’s better to get help from the beginning. Look for local resources that are well-versed in the rental laws of your state.  </p> <p> Not all landlords are going to tell you outrageous lies and try to keep your security deposit. However, knowing how far the bad landlords can go can help you ask the right questions, preventing costly mistakes in the first place.  </p> <p> Keep these lies in mind the next time you get ready to rent, and you’ll be well on your way to <a href="https://financebuzz.com/financial-stress-55mp?utm_source=msn&utm_medium=feed&synd_slide=12&synd_postid=8742&synd_backlink_title=eliminating+unnecessary+money+stress&synd_backlink_position=6&synd_slug=financial-stress-55mp">eliminating unnecessary money stress</a> worrying about things your landlord cannot do.  </p> <p>  <p class=""><b>More from FinanceBuzz:</b></p><ul> <li><a href="https://www.financebuzz.com/shopper-hacks-Costco-55mp?utm_source=msn&utm_medium=feed&synd_slide=12&synd_postid=8742&synd_backlink_title=6+genius+hacks+Costco+shoppers+should+know&synd_backlink_position=7&synd_slug=shopper-hacks-Costco-55mp">6 genius hacks Costco shoppers should know</a></li><li><a href="https://financebuzz.com/grocery-inflation-55mp?utm_source=msn&utm_medium=feed&synd_slide=12&synd_postid=8742&synd_backlink_title=Paying+more+for+groceries%3F+6+ways+to+fight+inflation&synd_backlink_position=8&synd_slug=grocery-inflation-55mp">Paying more for groceries? 6 ways to fight inflation</a></li><li><a href="https://financebuzz.com/retire-early-quiz?utm_source=msn&utm_medium=feed&synd_slide=12&synd_postid=8742&synd_backlink_title=Can+you+retire+early%3F+Take+this+quiz+and+find+out.&synd_backlink_position=9&synd_slug=retire-early-quiz">Can you retire early? Take this quiz and find out.</a></li> </ul>  </p> <p> <i>FinanceBuzz is reader-supported. We may receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about <a href="https://financebuzz.com/advertising-policy?utm_source=msn&utm_medium=feed&synd_slide=12&synd_postid=8742&synd_backlink_title=how+we+make+money&synd_slug=advertising-policy">how we make money</a> and <a href="https://financebuzz.com/editorial-policy?utm_source=msn&utm_medium=feed&synd_slide=12&synd_postid=8742&synd_backlink_title=our+editorial+policies&synd_slug=editorial-policy">our editorial policies</a>.</i> </p>

Closing costs

Closing costs accompany all property purchases, including vacation rentals, so don’t forget to include these in your budget. 

Closing costs might include title transfer fees, escrow fees, and processing fees. You may also face other fees in addition to your down payment and mortgage.

You can expect to pay between 2% and 5% of your loan amount in closing costs. So if your loan is for $200,000, anticipate closing costs between $4,000 and $10,000.

<p> Vacation rentals come with the same utility bills you have at your primary residence. And since you rent for short intervals of time, the responsibility of paying them will likely fall to you.  </p> <p> You’ll encounter basic utilities such as electricity, water and sewer, and heat, but your guests won’t be thinking about keeping the costs down the way you would in your own home, so those bills may surprise you. Most guests will expect free wifi and might also expect a landline telephone. And you will still need to pay these bills when the vacation home is empty. </p>

Utility bills

Vacation rentals come with the same utility bills you have at your primary residence. And since you rent for short intervals, paying them will likely fall on you.

You’ll encounter basic utilities such as electricity, water and sewer, and heat. Your guests won’t be thinking about keeping the costs down the way you would in your own home, so those bills may surprise you. 

Most guests will expect free Wi-Fi and might also expect a landline telephone. And you will still need to pay these bills when the vacation home is empty.

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<p> Carrying debt can impact your credit score, but it also affects your debt-to-income ratio. Mortgage lenders use this ratio to determine if and how large of a mortgage you can afford. </p> <p> If your debts are too high compared to your income, a lender might offer or lower mortgage. They could also deny you a loan entirely.  </p> <p> Lenders will also consider expenses such as other mortgage payments, loans, credit card debt, and even child support obligations.  </p> <p>  <p class=""><a href="https://financebuzz.com/clever-debt-payoff-55mp?utm_source=msn&utm_medium=feed&synd_slide=3&synd_postid=9514&synd_backlink_title=6+Clever+Ways+To+Crush+Your+Debt+Today&synd_backlink_position=3&synd_slug=clever-debt-payoff-55mp">6 Clever Ways To Crush Your Debt Today</a></p>  </p>

You will likely need to pay property taxes on your vacation rental; how much depends on various factors, such as the location and assessed value. 

Since you’ll need to invest in a rental where people want to vacation, you’ll have fewer options for choosing a low-tax state. The good news is that property taxes are fairly low in states like Hawaii and California; the bad news is that home prices in these states are not.

You may also need to pay tax on your rental income. To avoid unnecessary tax burdens, you’ll want to keep detailed records of all your expenses related to the property. 

Hiring an experienced accountant can help protect you from making mistakes that cost you more money or missing out on significant deductions.

<p> There are all the usual expenses like lawn care, pest control, and battery and filter replacements. But things can break down and wear out in vacation rentals as in any other home. These problems will need addressing before they result in larger issues.  </p> <p> You will need to maintain the property, like new, to keep it attractive as a rental: curb appeal is important. You also have to maintain the property when it’s not in use. If it’s a seasonal rental, there may be extra expenses in closing and re-opening the property between seasons.  </p>

Property maintenance and repairs

There are all the usual expenses like lawn care, pest control, and battery and filter replacements. But things can break down and wear out in vacation rentals, as in any other home. These problems will need addressing before they result in larger issues.

Curb appeal is important. You must maintain the property to keep it attractive as a rental. You also have to maintain the property when it’s not in use. 

If it’s a seasonal rental, there may be extra expenses in closing and re-opening the property between seasons.

<p> In order to successfully rent the property, you will probably need to advertise it, and, of course, advertising costs money. There are many types of advertising available, including paid ads. Many property owners choose to list on popular vacation rental platforms, such as Airbnb, which takes a percentage of your earnings. </p> <p> You may need to experiment with marketing to see which types provide the best results. This could get expensive very quickly, especially if the strategy is not effective. </p>

Advertising

To successfully rent the property, you will probably need to advertise it, and, of course, advertising costs money. 

Many property owners choose to list on popular vacation rental platforms, such as Airbnb, which takes a percentage of your earnings.

You may need to experiment with marketing to see which types provide the best results. This could get expensive very quickly, especially if the strategy is ineffective.

7 savvy moves when you have $1,000 in the bank

<p> A vacation rental needs to be fully furnished. Cheaper furniture is more likely to become damaged or broken and may not appeal to high-paying guests.  </p> <p> But expensive furniture is costly to replace and, often, more difficult to clean and maintain. Guests will not want to rent the vacation home if the sofa is full of stains or the mattresses are lumpy. </p>

Furnishings

A vacation rental needs to be fully furnished. Cheaper furniture is more likely to become damaged or broken and may not appeal to high-paying guests.

But expensive furniture is costly to replace and, often, more difficult to clean and maintain. Guests will not want to rent the vacation home if the sofa is full of stains or the mattresses are lumpy.

<p> In addition to furniture, you may need to purchase household furnishings and items for your guests to use during their stay. You can purchase some infrequently, such as curtains, blankets, and kitchen utensils. But others will need to be replenished regularly, such as bathroom supplies such as toilet paper, basic cleaning supplies, and toiletries, and kitchen staples such as coffee, tea, salt, pepper, sugar, etc. If you provide sheets and towels, there will also be laundry to do when guests leave. </p> <p> Depending on the location, you may want to provide other conveniences at the rental, such as firewood or a beach umbrella, or even puzzles and board games. </p> <p> You should also factor in replacement costs for theft and/or breakage; you could find towels or other items missing once a guest leaves. And there’s the cost of cleaning and re-stocking between visits. If you don’t live close to the vacation home or don’t want to do it yourself, you’ll need to pay someone to manage the property between guests. </p>

Household and personal items

In addition to furniture, you may need to purchase household furnishings and items for your guests to use during their stay. 

You can purchase some infrequently, such as curtains, blankets, and kitchen utensils. But others will need to be replenished regularly, such as bathroom supplies such as toilet paper, basic cleaning supplies, toiletries, and kitchen staples. If you provide sheets and towels, there will also be laundry to do when guests leave.

Depending on the location, you may want to provide other conveniences at the rental, such as firewood, a beach umbrella, or even puzzles and board games.

You should also factor in replacement costs for theft and breakage; you could find towels or other items missing once a guest leaves. And there’s the cost of cleaning and re-stocking between visits. 

Also, if you don’t live close to the vacation home or don’t want to do it yourself, you’ll need to pay someone to manage the property between guests.

<p> If your vacation rental is a community that requires HOA fees, those fees will be an added cost. HOA fees can be costly, at as much as thousands of dollars per month. However, you can expect lower fees in many areas. And, if the HOA also offers attractive amenities, such as a community pool or golf course, that could increase your rental income and be well worth the fees. </p> <p> To ensure the vacation home is affordable and a good investment, determine how much the HOA fees are before you buy, and remember that you will need to pay them whether or not the property is occupied.</p><p>  <p class="">Earn rewards and travel more while spending less with these <a href="https://financebuzz.com/top-travel-credit-cards?utm_source=msn&utm_medium=feed&synd_slide=10&synd_postid=10183&synd_backlink_title=top+travel+credit+cards&synd_backlink_position=6&synd_slug=top-travel-credit-cards">top travel credit cards</a>.</p>  </p>

Homeowners association (HOA) fees

If your vacation rental is in a community that requires HOA fees, those fees will be an added cost. 

HOA fees can cost as much as thousands of dollars per month. However, you can expect lower fees in many areas. And if the HOA also offers attractive amenities, such as a community pool or golf course, that could increase your rental income and be well worth the fees.

To ensure the vacation home is affordable and a good investment, determine how much the HOA fees are before you buy, and remember that you will need to pay them whether or not the property is occupied.

9 Things You Must Do Before The Next Recession

<p> Owning a vacation rental may sound great, and it can be, but the actual costs can be a big surprise. You can minimize expenses by comparing lenders, considering vacation rental locations, and gathering all of the necessary information before deciding on a purchase. It pays to <a href="https://financebuzz.com/5k-a-month-moves-55mp?utm_source=msn&utm_medium=feed&synd_slide=11&synd_postid=10183&synd_backlink_title=make+smart+money+moves&synd_backlink_position=7&synd_slug=5k-a-month-moves-55mp">make smart money moves</a> when you invest your hard-earned money.  </p> <p> Owning and renting out a vacation property can be lucrative, but be sure to consider all the costs, including the work that may fall to you to clean, maintain, and prepare the property for the next guest. The last thing you want is for any unexpected costs to eat into your profits, or for your “passive” income to become a full-time job. </p> <p>  <p class=""><b>More from FinanceBuzz:</b></p> <ul> <li><a href="https://www.financebuzz.com/shopper-hacks-Costco-55mp?utm_source=msn&utm_medium=feed&synd_slide=11&synd_postid=10183&synd_backlink_title=6+genius+hacks+Costco+shoppers+should+know&synd_backlink_position=8&synd_slug=shopper-hacks-Costco-55mp">6 genius hacks Costco shoppers should know</a></li> <li><a href="https://financebuzz.com/recession-coming-55mp?utm_source=msn&utm_medium=feed&synd_slide=11&synd_postid=10183&synd_backlink_title=9+things+you+must+do+before+the+next+recession.&synd_backlink_position=9&synd_slug=recession-coming-55mp">9 things you must do before the next recession.</a></li> <li><a href="https://financebuzz.com/retire-early-quiz?utm_source=msn&utm_medium=feed&synd_slide=11&synd_postid=10183&synd_backlink_title=Can+you+retire+early%3F+Take+this+quiz+and+find+out.&synd_backlink_position=10&synd_slug=retire-early-quiz">Can you retire early? Take this quiz and find out.</a></li><li><a href="https://financebuzz.com/extra-newsletter-signup-testimonials-synd?utm_source=msn&utm_medium=feed&synd_slide=11&synd_postid=10183&synd_backlink_title=9+simple+ways+to+make+up+to+an+extra+%24200%2Fday&synd_backlink_position=11&synd_slug=extra-newsletter-signup-testimonials-synd">9 simple ways to make up to an extra $200/day</a></li></ul>  </p> <p> <i>We may receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about <a href="https://financebuzz.com/advertising-policy?utm_source=msn&utm_medium=feed&synd_slide=11&synd_postid=10183&synd_backlink_title=how+we+make+money&synd_slug=advertising-policy">how we make money</a> and <a href="https://financebuzz.com/editorial-policy?utm_source=msn&utm_medium=feed&synd_slide=11&synd_postid=10183&synd_backlink_title=our+editorial+policies&synd_slug=editorial-policy">our editorial policies</a>.</i> </p>

Bottom line

Owning a vacation rental may sound great, and it can be, but the actual costs can be a big surprise. It pays to make smart money moves when you invest your hard-earned money.

You can minimize expenses by comparing lenders, considering vacation rental locations, and gathering the necessary information before deciding on a purchase.

Owning and renting out a vacation property can be lucrative, but be sure to consider all the costs, including the work that may fall to you to clean, maintain, and prepare the property for the next guest. The last thing you want is for unexpected costs to eat into your profits — or for your “passive” income to become a full-time job.

More from FinanceBuzz:

  • 6 genius hacks Costco shoppers should know
  • 9 things you must do before the next recession.
  • Can you retire early? Take this quiz and find out.
  • 9 simple ways to make up to an extra $200/day

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Vacation Rentals in Elektrostal

Elektrostal vacation rental travel info, other types of properties in elektrostal you may be interested in.

Everything you need to know about Elektrostal vacation rentals

Whether you’re excited for the perfect family vacation, a romantic getaway for two, or the ultimate city break, we’ve got the Elektrostal vacation rental for you. At Expedia, you can take your pick from private vacation homes, apartments, condos, resorts, cabins, villas, motels. The list goes on, and on …and on.

There’s just as wide a choice of amenities, too. Maybe you’re dreaming of your own pool, long evenings in a hot tub, or watching the kids laugh through the day at a waterpark. Maybe you just want a quiet retreat in a pet-friendly apartment. Well, we can help you find it. Hunt out the perfect Elektrostal vacation rental for you by simply entering your desired dates. Then check your favorite filters to narrow down your search.

Elektrostal vacation rentals: An excellent choice for every season

Whenever you want to travel, a warm welcome awaits you in Elektrostal. If you’re looking for a little peace, consider booking during the quieter low season months. For more hustle and bustle, you may prefer to visit Elektrostal in high season.

Prices vary throughout the year. Your chosen location, property type, and amenities will impact the cost of your trip, too. The selection of properties we have chosen for you start as low as per night. Rates vary depending on your travel dates, location, and amenities so make a search and you might find even better deals!

How to find incredible deals on Elektrostal rentals

At Expedia, we put the best Elektrostal vacation rentals in one place. All you need to do is take your pick. And as we offer book now, pay later options, as well as free cancellation on some properties, you can plan your trip with total peace of mind. You’ll always find a great deal with Expedia.

To find some top Elektrostal rental deals, enter your travel dates, and sort your search results by price. You can also filter by budget, so you only see accommodation in your ballpark. Next, add any filters you want—and just like that, you’ve built your dream Elektrostal vacation.

If you’re looking for a little inspiration, browse our latest incredible offers, or use the map to view all accommodation in and around Elektrostal. And to unlock even more fantastic deals, bundle your accommodation, flights, and car rental together to save and book with Expedia in complete confidence.

Frequently asked questions

Yes, we give you a choice of vacation rentals near popular attractions in Elektrostal, or you can choose a more remote option if you'd like a relaxing place to stay. Elektrostal is known for its museums.

Explore the area and cultural attractions such as Electrostal History and Art Museum, or visit a family-friendly sight such as Yuri Gagarin Cosmonaut Training Center. History of Russian Scarfs and Shawls Museum and Central Museum of the Air Forces at Monino are a couple of places you'll find in the larger area.

A vacation rental is a private property where you can stay for a couple of days or more in Elektrostal. Vacation rentals provide amenities such as patios, hot tubs, and fire pits so you'll have a home away from home. If you're concerned about cleanliness, a vacation rental can provide a sense of seclusion away from shared hotel elevators and lobbies packed with people while still allowing you to travel. You'll also get more space in a vacation rental than in a standard hotel, which makes a vacation rental a great choice for family trips.

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I refused to let my travel dreams die when I became a mom. Here's how I budget to keep my family of 4 traveling the world full-time.

  • Beth McCarter and her husband pulled their kids out of school to try "worldschooling" three years ago.
  • They maintain a modest budget by renting out their home, spending less, and embracing slow travel.
  • She gets criticized by her in-laws but has no plans to stop homeschooling and traveling the world.

Insider Today

"Look, kids, the shark is right under the boat!" I shout, pointing at the disappearing fin. My 7-year-old pinches her nose and dives in.

"Wheee!" my 5-year-old screams, already halfway down the boat's ladder. I snap a quick pic and scramble after them. I'm just as eager to see the shark up close.

It's Tuesday, and technically, we're "at school." Instead of drawing out different ecosystems while sitting in a classroom, today's lesson plan includes snorkeling off the coast of Tahiti to observe black tip reef sharks in their natural habitat.

Although not your average school day, that's been the usual fair since I left my teaching job to homeschool my kids over three years ago. We've since traveled across Europe, Mexico, French Polynesia, and most of the southern United States, all on a modest budget.

Traveling was always in the plan

Our transition to worldschooling was a long time coming.

Back in college, before I got married, I told my now-husband I'd never be happy with settling down . "Alright, let's travel the world!" he said.

Travel did not begin right away, as we took a few years off to have kids and get started in our careers. But after teaching in Texas for 7 years, gun violence and the school system's disregard for staff's well-being prompted me to speed up what had always been my plan.

After my husband landed a job that allowed him to work online, I quit my job, we pulled the kids out of school, rented out our house, and moved to France for three months.

Adjusting our lifestyle

We learned the hard way that financing worldschooling is easier when you don't have much debt. Our first trip was planned without tackling this issue, as at the time buying plane tickets sounded much more appealing than paying off old credit cards.

These days, we look out for the the best travel deals before deciding on a plan. Our biggest find was when we paid less than $200 a piece for tickets to France from the US, including our pets.

To enjoy worldschooling without the stress of worrying about money, we have to balance being financially responsible against our desire to travel.

We began downsizing early on and have tried to embrace minimalism whenever the kids let us.

Choosing what to do with our car and house was another big piece of the puzzle. Now, we rent out our house so that we can still accrue equity while someone else pays the mortgage. We keep our car at my parents' house and also bunk with them when we're in town in exchange for helping out on the farm.

These days, our family is constantly on the move. We take road trips around the US and make it a point to venture abroad at least once a year. We homeschool and work full-time from our laptops on the road.

To keep our lifestyle sustainable, we're constantly tweaking our budget. Back when we were teachers, we used to go to the mall and end up blowing our budget. Now, we know how much we enjoy having travel experiences over mindless shopping and eating out. We thrift whenever possible, and we're always looking for ways to increase our income online.

We've found that balancing frugal living and quality of life is key to living out our worldschooling dreams while maintaining financial stability.

Our new strategy

Our ability to keep traveling hinges on a combination of strategic choices.

We embrace slow travel . This means spending extended periods in each location to minimize transportation costs and taking advantage of long-stay discounts. When we were in Europe, we were surprised that renting a car for a couple of days cost more than an entire month's lodging.

We opt for free pet-sitting opportunities when available. One time, we spent the Christmas holidays in a house next to Disney World for free in exchange for watching a couple of slobbery bulldogs.

When it comes to international travel, we select our next destination based on ticket affordability. While we would love to go back to Asia and Europe, our budget often means we have to explore closer to home for the time being.

A passive income stream, such as selling a digital product, can help. I wish I had learned about passive income earlier. The only downside is that it can take a while to develop. I've put several years of work into this project, but I now earn a small amount of income every month from blog posts I've written about both travel and homeschooling that include links to affiliate products.

Worldschooling isn't a never-ending vacation

There have been a lot of mishaps along the way — my kids both caught COVID-19 in Tahiti and I sprained my ankle in a rabbit hole in rural France. We've also faced criticism for our choice to travel. My in-laws are especially disapproving and are openly against homeschooling.

The biggest setback of worldschooling has been the lack of "adult" time. Finding personal space is hard when you're staying in hotels or small Airbnbs.

I did it for my inner child

Worldschooling, for me, is also about fulfilling my childhood dreams. I travel for my 11-year-old self, who spent countless hours dreaming of traveling and watching "House Hunters International." My current lifestyle is in many ways, a heartfelt celebration of my inner child's dreams.

In that way, it's about setting an example for my children. I believe that it's essential for kids to witness their parents, especially their mothers, pursuing their own happiness and fulfilling their dreams.

My own mother sacrificed everything to be able to homeschool me and my siblings. Since becoming a parent myself, I've realized that giving everything up for the sake of your children is not healthy for you or them. By living out my travel dreams, I'm showing my children, especially my daughter, that your dreams shouldn't die when you become a mom.

Worldschooling isn't just about education and exploration; for me, it's a journey of self-discovery and setting an empowering example for my children.

Beth McCarter is a certified teacher and the creator of The Homeschool Graduate.

Got a personal essay about living abroad or parenting that you want to share? Get in touch with the editor: [email protected] .

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Watch: This mom travels the world with her two kids and they love it

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Orekhovo-Borisovo vacation rentals

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How to get to and around Orekhovo-Borisovo

Fly into Sheremetyevo Intl. Airport (SVO), the closest airport, located 27.1 mi (43.7 km) from the city center. If you can't find a flight that works for your travel itinerary, you could also fly into Moscow (DME-Domodedovo Intl.), which is 15.4 mi (24.8 km) away.

Consider catching a ride on the metro at Domodedovskaya Station or Orekhovo Station to easily get around the city.

Frequently asked questions

Length of stay, property type and time of year are among the factors that can affect the price of a vacation home. Simply click on your travel dates to find the ultimate escape. From comfy cabins to sprawling luxury villas, all Vrbo vacation rentals offer amazing value.

When you travel and the style and size of the property will influence how much you'll pay for your beachside stay. Enter your Orekhovo-Borisovo travel dates to see your options on Vrbo. Can't live without a hot tub? Use our filters to select the features and amenities you want.

There are plenty of awesome things to see and do with the family in Orekhovo-Borisovo, including:

  • Kolomenskoye Historical and Architectural Museum and Reserve
  • Tsaritsyno Museum Reserve

The age limit can differ across properties on Vrbo, so check the rules of the vacation home in Orekhovo-Borisovo you're considering. But normally, it's 16, 18 or 21.

The amount of time you can stay in an Orekhovo-Borisovo vacation rental for depends on the property. Just enter your dates of travel to view options offering extended stays. They come with the things you need to make your extended trip more comfortable and enjoyable, such as kitchens and backyards. Some properties might also offer discounted weekly or monthly prices, so you can stay longer for less money.

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Search Deals on Electrostal History and Art Museum Vacation Packages

Book the perfect getaway to Electrostal History and Art Museum

With Hotwire, booking your next trip to Elektrostal is a breeze. When it comes to planning a show-stopping vacay, you’re the reigning champion of doing it on a dime. You love to plan exciting destination adventures while saving money on a budget.

Hotwire is here to help you plan a smooth sailing trip to Electrostal History and Art Museum while saving some major cash. Doubling up on vacation expenses like hotel and car rentals and fun-filled excursions can save you money—especially when you book one of Hotwire’s vacation packages.

If your trip to is spur-of-the-moment and you’re leaving soon, Hotwire can save you up to 60% off your rentals with Hotwire Hot Rate deals. Book with Hotwire to grab a stellar Electrostal History and Art Museum flight and hotel package for as low as .

Living it up in Elektrostal means getting there in style and staying in a hotel that matches your mood. Book one of Hotwire’s Electrostal History and Art Museum, Elektrostal vacation packages to enjoy the best of both worlds. Flight and hotel packages typically include roundtrip non-stop flights and multi-day hotel stays. Packages are priced per person and are perfect for flying solo or traveling with a group of friends or family. Conveniently choose from Hotwire’s inventory of hotels in Electrostal History and Art Museum for some of the best accommodations and flight deals.

FAQs about cheap Electrostal History and Art Museum packages:

How to get cheap vacation deals to electrostal history and art museum.

Save up to 60% off vacation deals with Hotwire Hot Rates. Just plug in your general preferences and let Hotwire choose matching hotels for as low as .

How much are Electrostal History and Art Museum packages?

Vacation packages to Electrostal History and Art Museum vary in price. They are priced per person and include discounted hotel and flight costs. With Hotwire, you can score a vacation package for as low as .

How to find cheap car rentals near Electrostal History and Art Museum?

Hotwire partners with some of the most reliable car rental companies in Elektrostal to bring you the best car rental deals in Electrostal History and Art Museum for as low as . Select a rental from Hotwire’s extensive inventory of cars for every travel style. If you plan on bringing friends or family along, opt for a spacious SUV. If you’re visiting on business but still plan to make time for off-the-clock adventures, Hotwire offers sleek luxury and convertible rentals.

Is it safe to travel to Electrostal History and Art Museum now?

With recent COVID-19 closures and reopenings, many people are wondering, “Is it safe to travel to Electrostal History and Art Museum right now?” When it’s time to book your vacation, check out the most up-to-date information on all safety measures, any restrictions, and  guidance on traveling during the coronavirus  pandemic.

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Jeff bezos bags $8.5b after selling 50 million amazon shares over 2 weeks.

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Jeff Bezos has sold a total of 50 million Amazon shares during the past two weeks, bagging roughly $8.5 billion in cash, according to securities filings.

The 60-year-old e-tailing tycoon unloaded more than 14 million shares on Tuesday for about $2.37 billion — after selling 36 million Amazon shares in three transactions last week , according to a Securities and Exchange Commission filing earlier reported on by CNBC .

The four sales were executed under a prearranged trading plan that Bezos disclosed earlier this month, which said that he could sell up to 50 million Amazon shares before Jan. 31, 2025.

Amazon founder and executive chairman Jeff Bezos sold more than 14 million shares of his company on Tuesday, copleting his grand plan to unload 50 million shares by Jan. 31, 2025.

The selling spree marks the first time that Bezos has sold his stock in the e-commerce behemoth since May 2021, the year he stepped down as Amazon’s CEO and assumed the sole role of executive chairman.

It’s unclear what Bezos plans to do with his handsome windfall, which he will get a tax break on thanks to his recent Seattle-to-Miami move.

Bezos — also the founder of space company Blue Origin and the owner of The Washington Post — announced that he was leaving his longtime Seattle home in November, triggering a flurry of questions about whether the world’s second-richest person was looking to skirt higher tariffs.

Washington state imposed a 7% levy on capital gains on stocks or bonds upwards of $250,000 in 2022. Florida, however, has no such tax.

Had Bezos stayed in Emerald City — where he built a multimillion-dollar compound less than 10 miles from Amazon’s Seattle headquarters — he would’ve had to cough up $595 million to satisfy that capital gains tax.

The figure surpasses the $500 million Bezos doled out to purchase his superyacht, named Koru, which features a helicopter landing pad, swimming pool and a mermaid resembling his fiancée, Lauren Sanchez, adorning the prow.

Thanks to his Seattle-to-Miami move, Bezos does not hae the pay the 7% levy on capital gains Washington state imposed in 2022. Florida has no such tax, and requiers less in property taxes.

Aside from the capital gains tax breaks he’ll get, Bezos is also poised to save on property taxes now that he call’s Miami’s exclusive Indian Creek island, also known as “Billionaire Bunker,” home.

Property taxes are 0.89% in the Sunshine State — less than Washington’s real estate tax rate of 0.98%,  according to Rocket Mortgage.

Bezos bought a a $79 million, seven-bedroom, 14-bathroom abode in Miami in October — two months after buying the  three-bedroom, three-bathroom home next door  for $68 million.

Bezos bougha a $79 million seven-bedroom, 14 bathroom mansion on Miami's "Billonaire Bunker"— just weeks after spending $68 million on the property directly adjacent to it.

After scooping up two of only 40 reported waterfront properties on the ultra-exclusive island, Bezos reportedly has plans to bulldoze the $68 million pad and build a single megamansion with its neighboring eight-figure enclave.

It wasn’t immediately clear if he also has plans to tear down the $79 million, 19,064-square-foot home, though he’ll certainly be paying less property taxes than he did on his former primary residence in Seattle, where he executed a similar teardown project after accumulating a 5.3-acre property in the affluent Medina, Wash., neighborhood.

Also in Washington, deep-pocketed residents with assets valued at $2.193 million or more are also obligated to pay an estate tax ranging from 10% to 20% upon their death.

Bezos boat

If Bezos were to keep Seattle as his primary residence and maintain his current net worth, it would mean he’d have to give up as much as $38.8 billion in estate taxes upon his death.

Florida, meanwhile, does not charge residents estate tax, regardless of asset size.

Representatives for Bezos did not immediately respond to The Post’s request for comment.

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Amazon founder and executive chairman Jeff Bezos sold more than 14 million shares of his company on Tuesday, copleting his grand plan to unload 50 million shares by Jan. 31, 2025.

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