Managing short term property rentals is becoming easier and more profitable with every passing year. With technology and automation, this shared-economy business model is both welcoming and lucrative. However, it’s a good bet if you’re reading this, you’re not looking for a side gig or a hobby.
You can make a fortune running a short term property rental business by prepping as much as possible before opening the doors to your first guest. The following are a collection of expert tips and strategy that are guaranteed to help you build and scale your short-term rental empire.
Short-Term Property Management: A Brief Guide
Are you ready to run a business? Turning your real estate into real fortune will require you to be part host part businesswoman/man. One tried and true strategy to entering into business is to learn, then earn. Taking a property management course online is a great place to start.
Courses like this will help in understanding the basics of:
- Anticipate expenses
Like any other business, you’ll want to have a hand on the basics before you put your home on the short term property rental market. Once you’ve got that covered, dig deeper by seeking out an industry mentor or doing as much research as possible. A mentor (or really diligent research) will assist in your approach to:
- Making your home or space short-term rental friendly
- Creating and managing a competitive and descriptive listing
- Stage, photograph, advertise & market your rental
- What to charge according to your location
- How to screen guests and respond to inquiries
- Manage guest arrival and departure
- How to anticipate and handle problems
Asking the right questions early on with save you time and money.
The Cost of a Short Term Property Rental Business
Speaking of money, the cost of a short term rental property is an important factor to consider. How much time and money do you have to put in to win a fortune on short term rentals? You already own the property or space that you’re renting, which is why this market is easy to break into. But, few people anticipate the cost and time investment it requires.
Here are a few areas you can expect to invest in:
- Property management software to streamline the booking and checkout process
- Cleaning, staging, decor
- Insurance – including any homeowners insurance or home warranty coverage
- Short term property rental online fees.
The amounts and percentages of these cost with vary from size and location of your short-term rental property. It will also differ if the rental is your main home or a separate property. Not included on the list is the option of having a team. So, if you’d like a hands-off approach (which eventually most business owners aspire to), hiring a team comes with its additional costs but saves your time.
How Much Money Can You Earn?
Like any investment, the more you put in the more you can seek in return. A short term property rental survey shows that the average owner renting out a second home makes $33,000 or more per year. The average Airbnb operator (in-home renting) makes $11,000 annually. Again, these numbers will vary on the rental, location, business model, and approach to marketing and strategy. Some hosts make $200/month some Airbnb hosts make $10,000/month.
Short-Term Rental Platforms
So, now you know a little bit about what it will take to get started, maintain, and capitalize on your short term property rental. Ready to post your listing? Here are a few of the most competitive short-term rental platforms to help you reach your guests.
- Airbnb – The best in the game and poster child for the industry, Airbnb currently offers travelers 4 million homes away from home. There are no subscription fees to host your listing and manage your property on Airbnb. They have perfected their business model to help you make your fortune using their website, management tools, software and unprecedented reputation.
- Vacation Rentals By Owners (VRBO) – is part of the HomeAway family of vacation rental sites, focuses on providing vacation rentals in the United States. VRBO offers more than 265,000 vacation home rental listings. In order to rent a property on VRBO, hosts pay per booking or an annual subscription of $499 per year. The pay per booking fee ranges from 8% to 10% of the total rental amount.
- HomeAway – HomeAway is a vacation rental giant. Guests stays tend to average longer than Airbnb stays but booking tends to plummet in the off-season. The average earner on this site makes $12,000/year with an annual fee of $349 and feature other subscription opportunities to boost your listing.
Regardless of which platform you choose to place your listing, the real powerhouse behind your short-term rental fortune is you. Anticipate the cost, study and master the market, decide which platform suits you and your guests, and go for it. In the ever-growing multi-million dollar industry, your fortune awaits!