Rental Business
Rental Business

The vacation rental industry has never been more alive than in 2024. It was the most successful year for the industry as a whole. It may have been better for some of the more prominent websites than they would have liked due to new competitors coming in, but as a whole, the industry has grown exponentially. For anyone looking to start a vacation rental business, this is a great time to get into this line of work.

See how much any address can earn as a short-term rental using this tool created by Rabbu.

Why Are Vacation Rental Businesses Becoming So Popular?

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

Higher Daily Income than Yearly Contracts

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

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

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

Property Is Usually a Safe Investment

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

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

The Industry Has Low Barriers to Entry

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

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

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

Find out more about barrier to entry here.
 

You Can Run a Vacation Rental Business Online

One of the most attractive aspects of vacation rentals is that you do not need an office. If you list your property or properties on a vacation rental website, and this is where all your bookings are coming from, you effectively have an online business.
  • Running an online business can allow you to work from anywhere. There are plenty of vacation rental business owners that run their businesses virtually.
  • The business has offline aspects, such as managing cleaners and maintenance people local to your property. Most vacation rental owners will have the filter or a local person hand the keys over to new guests, meaning the owner does not have to physically be at any of the properties.

How Can I Start My Own Vacation Rental Business?

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