It is always exciting to start new things that provide income and you can enjoy doing.
If you are ready to meet new people and learn new things starting a vacation rental business can be a way to go and this episode will show you how.
Welcome to another edition of Hospitality Property School.
I am your instructor, Gerry MacPherson.
.
Today’s episode, Starting a Vacation Rental Business: Your 101 Guide, is going to be a little different. It is a guest post written by Courtney Rosenfeld.
.
Renting out vacation homes to travellers has become an incredibly lucrative business venture in recent years. Since the arrival of websites like Airbnb, homeowners and real estate investors are seeing the value in renting out second homes to people looking for comfortable alternatives to traditional hotel stays. Many entrepreneurs have turned this passive side hustle into a full-time business, and you can too! Here’s what you need to know about starting a vacation rental business of your own.
The Pros and Cons of Investing in Rental Properties
First, make sure building a vacation rental business is the right move for you. There are several other ways to invest in real estate, including renting to long-term tenants, buying fix-and-flip properties, and investing in real estate investment trusts. Each option has its pros and cons. Rental properties, for example, offer an opportunity to generate passive income relatively consistently, but property management can become complex as you continue adding additional properties to your portfolio. Make sure you understand the advantages and disadvantages of each real estate investment strategy so you can make the best decision.
.
.
Create a Business Plan
When you’re ready to move forward with your vacation rental business, start by writing up a business plan. This is a great opportunity to establish your goals and the steps you need to take to get there. Not sure where to start? Keystone Hospitality Property Development can help you establish a clear vision for your property, set up your organization structure, and create a branding plan. If you’re new to real estate investing or rental property management, working with a professional is always a smart idea.
.
.
Keep Your Finances Organized
Good Financial organization will play a key role in the success of your business. When your finances are well organized, you’ll be able to spot trends in your income or expenses, so you can monitor your cash flow and ensure your company stays out of the red. The last thing you want is to take on more debt! Get set up with a reliable accounting system that offers features like cash flow monitoring, bill management, and expense tracking. The right accounting software will make it easy to manage your income and expenses so you can remain compliant and make better business decisions.
.
While you’re at it, open up a separate bank account for your business. This will allow you to keep your finances separate, making it easier to track your finances and do your taxes. You may even want to open a separate bank account for each of your rental properties so you can keep your financial history organized. Keep in mind you will need to register your business and obtain an EIN (Federal Employer Identification Number) before opening a dedicated business bank account.
Familiarize Yourself with Laws and Regulations
Violating rental property laws and regulations can put your business at risk. You may receive a hefty fine or face other legal repercussions. Some cities have imposed very strict laws on vacation rental properties, so be sure to do your research! You may need certain permits and licenses to operate a rental in your city and state. It’s also important to research building standards, zoning laws, HOA rules, landlord-tenant laws, and tax regulations governing short-term rentals.
.
Keep in mind that short-term rentals may be banned in certain cities or regions. For example, iGMS reports that Los Angeles and New York have imposed strict legal requirements on vacation rentals, including bans on rentals for periods of less than 30 days unless certain conditions are met.
.
.
Build a Unique Website
Even if you intend to list your hospitality property on a vacation rental marketplace like Airbnb, you should also build a unique website for your business. A website will make your rental business appear legitimate and professional. You can even use your property rental website to accept direct bookings from guests! As a result, you’ll be able to avoid fees charged by booking platforms and put more money back into your business. Guests will use your website to learn more about the rental property, view your availability, and pay securely online. Collecting contact information from website visitors and rental guests will make it easy to market your rental during slow periods and keep people coming back!
.
.
If you are a member of the Hospitality Property School Group, as a bonus, I will share a downloadable vacation rental business checklist pdf.
.
.
In conclusion
If you’re looking for ways to invest in real estate, purchasing a second home and turning it into a vacation rental is a great way to get started! Over time, you can purchase more properties and expand your business into a full-fledged vacation rental company. Take it one step at a time and make sure you don’t miss any important legal steps along the way!
.
.
“Courtney started Gig Spark to be a resource and the first step for people who are looking to join the gig economy, either to supplement their income or as a way to fulfill their dreams of becoming an entrepreneur.”
.
Are you thinking of starting a vacation rental business?
Let me know in the comments.
.
.
We cover more on organizational structure in “The Guide to Owning & Operating a Hospitality Property – Successfully” book & course. You find more information at KeystoneHPD.com
You will have access to this episode for as long as you would like but if you would like to see all the bonuses you would have access to as a member of the Hospitality Property School Group, check out the short video in this episode post-show notes.
.
.
In the next episode, I will talk with Travis “T-Bone” Talbot, a food and drink industry specialist.
.
That’s it for today’s episode,
Until next time, have a fun day.
.
If you haven’t done so yet, make sure up sign up for the INNsider Tips, say hi on social and join one of our groups. And make sure you get your free copy of the “How to Improve Your Hospitality Properties Success”.
.
You can find all the links in the show notes.
.
⇒ TO READ OR LISTEN TO THIS EPISODE ON KEYSTONE HOSPITALITY PROPERTY DEVELOPMENT:
https://keystonehpd.com/starting-a-vacation-rental-business-your-101-guide-296
.
..
.
Did you get your copy of the “How to Improve Your Hospitality Properties Success” ebook?
KeystoneHPD.com/How-to-Improve-Your-Hospitality-Properties-Success
.
.
.
Get Your INNsider Tips
.
.
Join one of your private groups
https://keystonehpd.com/private-groups
.
.
Say hi on social
Facebook: https://www.facebook.com/KeystoneHPD
.
Twitter: https://twitter.com/KeystoneHPD
.
LinkedIn: https://www.linkedin.com/company/keystone-hospitality-development
.
.
Listen to The Hospitality Property School PODCAST here
keystonehpd.com/hospitality-property-school-podcasts
.
.
YouTube
.
.
A Division of Keystone Hospitality Property Development
.
