Starting a vacation rental business: the keys, step by step

Do you want to buy an apartment or a vacation home or do you already own a property that you want to rent out on a short-term basis? In this practical guide, you will find all the main steps and actions to take to efficiently launch your seasonal rental activity and create an additional source of income. As many rental owners make the same mistakes at the beginning, we have collected for you the main mistakes to avoid.

A vacation rental business: law, taxation and insurance

When can you rent a vacation rental?

In some cities the rental market can be tight and affordable rentals are scarce. In these areas, seasonal rentals are more regulated. In any case, it is best to check directly with the local authorities about the rules in force in your city.

You do not have to take these measures of change of use, registration etc. under penalty of a fine. For more information, see our guide to renting on Airbnb legally.

Tax declaration

Of course, any income received through a tourist rental activity must be declared. We encourage you to consult a tax professional for guidance on taxes that must be paid.

Issuance of invoices

Some travelers may ask you for an invoice. Invoicing is optional, but can provide guests reassurance and enhance credibility. Find out more in our guide dedicated to the invoicing of seasonal rentals.

Holiday rental insurance

As a vacation rental owner, you need to protect yourself in case something goes wrong and purchase insurance. Especially if your vacation rental has a high occupancy rate and you have a lot of travelers coming in all the time. Incidents can happen quickly. And without insurance, it can cost you.

Vacation rental plan: target group & equipment

If you want to rent out a property, you need to think early on about the target group you want to primarily address. The more groups you take into account when designing your accommodation, the more potential travelers you will have. Think of families, couples, digital nomads who are looking for a nice place to telecommute etc.

What are your travelers’ needs?

Always think about your target group when designing and equipping your vacation home. For example, what are the needs of families with children or what does a visitor on a business trip need? Our comprehensive guide to essential amenities will help you to narrow down the main items to include in your rental.

Take a look at your listings & rates

Once your vacation rental is equipped and ready to welcome future tenants, it’s time to create rental listings. Write an attractive ad and present your vacation home in its best light without promising the impossible. Indeed, staying honest is essential in order not to disappoint your guests and not to collect negative reviews.

To prepare your ad on booking sites like Airbnb, Booking.com or Vrbo, discover tips and tricks in our guide dedicated to writing perfect listings.

Pricing of overnight stays

Effective pricing is essential for the profitability of your rental. However, you must be careful: if your prices are too high, potential customers will book with the competition. If your prices are too low, you won’t make a profit and you may even lose money.

Booking websites & rental management

The booking platforms

In order to reach as many potential guests as possible, you should publish your vacation rental on several booking portals. The biggest platforms are Airbnb, Booking.com and Vrbo. There are also other platforms, a selection of which you can find here.

Your own booking website

You should consider creating your own website for your short-term rentals. This makes you independent from the booking portals and allows you to get direct bookings without commission. In addition, your travelers will not have to pay booking fees either. With the Smoobu website builder, you can easily create your own website, without any design or programming knowledge.

A channel manager for vacation rentals

When your vacation rental will be offered on multiple booking channels, you will have more and more work to do to keep the booking schedules on the different sites up to date. You absolutely must stick to it or risk having to deal with double-booking situations. And we could do without these easily avoidable problems.

A Channel Manager can help you manage your reservations and much more. The software synchronizes your calendars in real time across all platforms and also offers you many automation possibilities for communication with your travelers.

Do it yourself or use a real estate agency?

When it comes to renting out vacation apartments, the basic question is whether you will take care of the management yourself or whether you will entrust this task to a management agency. The time needed for management depends on the number of apartments you own. An agency will take some of the work off your hands, but there will be additional costs and you will lose the social aspect of vacation rentals.

If you manage your own vacation rental, you have full control. In addition, a property management system (PMS) can make your job easier and save you many hours of work. These software solutions save you from working with countless Excel spreadsheets and help you manage and accept reservations online with just a few clicks.

Social networks

To get the word out about your rental, build your brand, and generate additional bookings, you can create an Instagram and Facebook page. To learn how to successfully use social media for your vacation rental, check out our guide to social media.

Conclusion: it’s better to be well prepared

There are certainly a lot of boxes to check off in the to-do list before you start renting out your property. But once you’ve prepared the ground and equipped yourself with a Channel Manager to support you on a daily basis in your new activity, renting will be more than a breeze.

Feel free to sign up for a free trial of Smoobu and discover how our rental management solution can help you optimize and simplify your business.

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