The vacation rental concept is exploding in popularity. In the ‘70’s, luxury hotels, in the ‘80s, bed & breakfasts in the ‘90’s, time-shares and in the new millennium, vacation rentals.
The vacation rental has been a mainstay with European vacationers for decades and now it’s coming into its own in the United States.
Even in this dismal economy, there is potential income from renting your second home to vacationers. If you’re lucky enough to own a property in an area considered a tourist destination or an area that you can promote as a tourist destination, vacation rental is a significant opportunity for you to augment your income or even pay-off that mortgage monkey on your back!
I hope the insights I share with you here about this burgeoning business, will provide you a starting point, a few ideas, and a reason to explore further.
I’m going to ask you to look at this as something akin to a business plan, so I’ll use this format to walk you through this. Let’s begin with…
A description of your business
Renting your second property to clients seeking vacation accommodations.
The business and owner’s background information
Perhaps you have a background in real estate, property management, the hotel industry, the tourism industry or leisure business. Said experience is not necessary, but any business experience is a plus.
The proposed resources to be used
Not to be the master of the obvious, but your second home, your vacation home or even your time-share can provide accommodations to vacationers.
The business strategy
Utilizing the services of one or more Internet based distribution and revenue management platforms for specialty lodging suppliers; you will rent your second home to vacationers for a set time period and fee.
Trends on your business and the industry it will operate within
As discussed earlier in this article, the trend in vacation rentals is exploding in the United States.
How your business will operate
Many vacation rental property owners choose to rent direct. This means marketing, web site development, legal help with drafting rental contracts, etc. You must decide, based on these and many other factors, how you want to proceed.
Who will manage and work within it
This is the ideal family operated business, if circumstances and geography allow for that.
What other businesses operate in the same market/industry
You will be in competition with local hotels, motels, travel lodges, bed and breakfasts and probably other vacation rental owners.
How you will market/ sell your product or service
Most rely on 3rd party services to list and rent their property, as discussed earlier, but many choose to rent direct.
The results expected
Naturally, the objective is to make a profit. You will need to balance your rental fees against those of your competitors in the market. You will need to determine your costs, such as maintenance, mortgage payment and property taxes and charge a fee high enough to cover those costs while still allowing a reasonable profit. Maybe profit isn’t going to be your main motivation. You may deem it adequate to have the outside assistance in paying taxes and mortgage payments.
A summary of its feasibility
If you own a second property located in a tourist destination, this is certainly achievable.
This ramble is intended to offer up some ideas you may not have previously considered with respect to your second home. It is by no means complete, but if the concept captures your interest, there are many sites on the Internet to help you in pursuing additional information.