Starting a business in any industry is a big leap, but venturing into the short-term rental sector can feel like a different ball game. There is clearly money to be made; demand for short-term rentals is already 10% higher than pre-pandemic and the industry is generating 40% more revenue than before, with the total number of vacation rental users expected to amount to 57 million by 2023.
However, the short-term rental space is competitive. In January alone, 58,000 new short-term rentals were added in the US, bringing the total short-term rental supply to more than 1.5 million for the first time ever. 14,000 new hosts are joining Airbnb each month in 2022, and the sector is set for a solid recovery.
So, in a crowded market, how do you drive bookings and make sure your short-term rentals stand out? Whether you’re considering investing in short-term properties for the first time or you’ve already got a small Airbnb portfolio under your belt, here are our top tips for starting a successful short-term rental business:
One of the most common reasons new property managers fail is because they don’t treat their short-term rentals as a business from the start. In order to succeed, every vacation rental business needs a strategic plan in place - ideally before anyone sets foot in the property.
What does a short-term rental business plan look like? Your business plan will be a key tool that you constantly refer back to, in order to drive business decisions and make sure you’re headed in the right direction. It will detail your business goals, value proposition, unique selling points and some industry analysis - including trends and expectations - to set the scene of the sector you are entering. AirDNA and AllTheRooms can be useful tools for this insight and analysis.
As a property manager, your time and money are of the essence. The end of each month can be a stressful period for short-term rental owners. With various payments, bills, mortgages and expenses waiting to be paid and collected, one missed expense can hugely impact budget, potentially resulting in less cash flow than anticipated.
Using a short-term rental accounting spreadsheet to track your income and expenses will help prevent unexpected financial issues down the line.
In addition to expected costs in the rental industry - such as taxes, insurance, maintenance and property management - short-term rental businesses have other unique expenses to consider too. From booking fees for listing platforms to monthly utilities, supplies and cleaning costs, there’s plenty to account for.
Creating one easy-to-use accounting spreadsheet will prevent financial headaches down the line, save you time and help you understand your vacation rental growth.
It’s safe to say the short-term rental industry is healthy in competition. Therefore, your properties need to stand out if you want them booked up.
High-quality pictures and basic amenities should be standard, but going the extra mile will give your properties an advantage. Work out who your rental best caters to - this could be business travelers or families - and get to work creating a space that meets their needs. For instance, a business traveler may require a desk for work or fast wifi, whereas families may expect extra equipment for children and more space.
Whether it’s an attractive location or unique amenities, be sure to highlight these selling points in your property listing. All listings should include a detailed description that is informative yet enticing. To encourage guests to click on your property, try mentioning a special feature or unique amenity in the listing title.
As your portfolio grows, you’ll likely find yourself juggling multiple channels and listings, which can be difficult to keep track of. You need to communicate with guests, manage property changeovers, collect deposits, handle bookings and keep on top of reviews - in other words, a lot of work.
With 63% of homeowners replying to travelers within just 60 minutes of receiving their inquiry, it’s crucial that you’re ahead of the game and able to compete. This means fast communication and a seamless booking process - something that can be difficult to achieve if you’re running a business by yourself.
Investing in short-term rental software is a great way to reduce inefficiencies and boost the guest experience. From synchronizing your listings across channels to automatically messaging guests, vacation rental software can help you provide a streamlined, efficient service that drives more bookings.
Armed with these tips and tricks, we’re confident you’ll get your short-term rental business off to the best start possible. Here are some success stories for inspiration.
Uplisting is a short-term rental property and channel management software built specifically for helping managers scale their businesses.
We’ve built an all-in-one property, channel management and automation tool to help property managers scale seamlessly.