Starting any kind of business requires a lot of work and advance planning, which is especially true for the hospitality industry. If you’re thinking about turning your home into a vacation rental, there are many important things to keep in mind. Before you start listing your home online as a rental, it’s imperative that you do a bit of well-thought-out planning. Read on to learn how you can transform your home and turn it into a fabulous vacation rental for a successful venture.
Start by doing your research
Before you start investing in a vacation rental, you’ll need to do some research. Here are a few essential things to look into before you jump in.
- Dig deeper into your area and find out if you live in a place that’s in high demand. If you live near a beach or a National Park, you may be in a viable market where many people are looking for a quality vacation rental (check out this U.S. State list if you’re unsure about your VR’s location).
- Sit down and do the math to help determine how much money you can earn. If your rental is seasonal, you might not be pulling in a profit during the off-season. You’ll also need to determine how much money you should invest before the property is suitable for renting to customers.
- Find out if other people near you have a successful vacation rental. Ask them for tips and advice to better understand what to do and expect.
Check your local regulations
Not every state, city, or neighborhood allows private property to be converted to a vacation rental. Ensure that you’re checking with your local jurisdiction to determine the current laws and guidelines. Ask about what you need to do to become a host and what type of permits or other required paperwork. You’ll probably need to complete a range of legal and/or non-legal paperwork before you can get started, so contact your local authorities to find out more.
Get familiar with your market
Just like a real estate agent needs to know their market before selling a home, you’ll want to look into your market to determine what business strategic plan will work best for your rental. Here are a few things to keep in mind:
- Figure out who you’re going to market the rental to in terms of demographics. Whether it’s a romantic getaway for couples, a place for singles to party, or a family-friendly space, it’s vital to determine just who your target market will be.
- Once you narrow down your niche market, writing a business plan will be much easier. You can also make the necessary modifications and upgrades tailored explicitly to your rental guests.
- If you’re located near a major attraction, use that as a highlight and include it in your marketing plan.
Create a solid business plan
Owning a vacation rental is a business, so you must develop a detailed and viable business plan. Keep these tips in mind to devise a plan that works for you.
- Sit down and determine what your business goals are. Include things like your operations plan and do a thorough competition analysis to understand better who is successful in your area.
- Come up with a complete business value proposition that showcases the unique qualities of your rental. This includes things like a hot tub or swimming pool and other extra amenities. The value proposition will serve as a guide to help you position your rental effectively in terms of marketing.
- Draft a financial plan using a profit and loss statement template that shows your projected profit and loss for the following year. The financial plan should also include a cash flow projection, a detailed balance sheet of expenditures, cost analysis, cash flow projection, and a solid five-year economic growth plan.
- Every good business knows its target market. As mentioned earlier, now is the time to determine exactly who you want your target market to be. Once you do this, you can develop an effective and creative marketing strategy. Whether it’s through online ads, local posts in the newspaper, or your own website, the right marketing plan will get you noticed.
- Being a host comes with risks, so make sure that your vacation rental has the proper type of insurance to protect you in the event of liability or if you need to file a damage claim. Weigh the risks vs. your chances of success to determine whether this is worth the risk for you.
- Conduct a competitor analysis and find out how much money they charge per night. Find out how they attract guests and what they do to determine a viable pricing strategy.
- Always make sure that you budget for your rental and consider how much money you have to invest ahead of time. This will help you gauge how much is available to spend now to see a profit later.
- Don’t forget to consider property management for your vacation rental. A property management company can help handle things like communications with customers, service calls, and general management of the property when you’re not there. You can also purchase property management software that will help you keep track of things like expenses, maintenance, utilities, and more.
Important home makeovers and modifications for a vacation rental
After creating a detailed business plan, it’s time to think about what you need to do to your home to make the vacation rental appealing to your target market. Here are a few tips to help you design a beautiful vacation rental.
Decorate for your target audience: Choose décor that will appeal to your target market. For example, a fully stocked bar and high-end bedding are great for couples or business people, while colorful artwork and lots of cooking tools (pots, pans, plates, and silverware) are always wise to include if families plan to stay. Use regional décor like coastal-inspired elements if you’re near the beach or rustic, lodge-style décor if you’re nestled among mountains.
Do a deep clean: Always make sure that your vacation rental is clean and sanitary. Wash all towels and beddings, and perform a deep cleaning to make sure that the floors, bathrooms, and the kitchen are pristine and as clean as possible for your guests.
Refurnish: You don’t have to buy all new furniture for your rental, but new beds and mattresses are recommended. If your sofa is worn out, consider purchasing a new one, too. Add accent pieces like a recliner or a comfortable bench to make the space cozy and inviting. A fresh coat of paint on the walls is another easy way to refresh your property before you rent it out.
Consider hiring professional cleaning services: You won’t always have the time, resources, or energy to clean your vacation rental. Consider hiring some pros to come and clean it in-between rentals to ensure that everything is up to standard. Look for a cleaning company that follows the latest cleaning and disinfecting guidelines. Look into hygiene and emergency cleaning regulations so you’re following them as closely as possible.
Hire some help: If you can’t DIY things like painting the walls or doing repairs, consider hiring a handyman to help. They can help you make modifications to your property so that it’s safe and ready to be rented.
Home inspection: Whether you own an apartment building in Austin, rent your home to tenants in Pittsburgh, or temporarily offer your property to vacationers in San Diego, it’s essential to conduct a thorough rental property inspection.
Start advertising your vacation rental
Now you’re ready to start advertising for your vacation rental. Be sure to take crisp, clear photos of the property, including all of the rooms inside as well as the exterior. You can hire a professional photographer for awesome pictures and drone footage if you choose. It’s also a good idea to hire a professional marketing expert or a community manager who can help you advertise through various social media outlets like Facebook and Instagram.
Decide if you want to use a vacation rental platform, such as Airbnb, Vrbo, or Booking.com. You can also choose to market and advertise everything yourself if you prefer. If you decide to use a platform, keep the additional costs and fees in mind when looking at your profitability; you can use an Airbnb calculator to get a forecast. If you choose not to use a platform, remember it will require more work on your part to reach new customers. Allow customer reviews to be posted on your website so that others can see how previous guests enjoyed their stay.
One effective strategy to make a vacation rental stand out is by including 2D floor plans. According to the NAR (2021) survey, a floor plan is the single most desired data asset on a listing by consumers, following standard photos and listing data. Typically, real estate professionals and business owners use scanning apps to create floor plans with their phones. Real estate marketing expert Anastasia Corjan explains in this article how to create professional house layouts in just 5 minutes.
Do things that add value
If you want to entice guests to stay at your vacation rental, make sure you create an awesome first impression by offering a clean, tidy space and an easy, positive check-in experience. Offer free Wi-Fi that has a stable connection so guests can be online any time they want during their stay. Provide your customers with some information about great places to visit. You can include pamphlets and brochures or post a sign somewhere in the home with a list of great things to do. Make the experience fun by adding some extra details like a few fun board games and quality amenities.
Offer a welcome basket, a small basket full of snacks, have plenty of fresh, clean towels available, and include small toiletries in the bathroom for guests to use. Little details like a comfortable bench or porch swing, a grill, and a quality coffee maker add a nice finishing touch that brings added value to your rental. By creating a solid brand, you will also ensure your guest will never forget about your rental and will even recommend you to their acquaintances.
Keeping your vacation rental in top shape
Pro vacation rental tips
Here are a few extra pro tips that may enhance the appeal of your rental and improve the guest experience.
- Be honest with your guests about any odd home features, such as windows that stick or hot water that takes a while to warm up.
- If possible, be flexible with your check-in and check-out times. This gives your guests peace of mind knowing they won’t have to rush out of there at a certain time on check-out day.
- Go the extra mile and ensure that your guests have everything they need for an enjoyable stay. If you’re able to, give out your cell phone number so they can reach out to you with questions or concerns.
- Be willing to give new renters without any reviews on platforms a chance. You never know if you’ve found the perfect guest until you provide them with an opportunity to shine.
- Send a personalized email to your guests a week before they arrive. Let them know you’re excited about their visit and provide your contact information so they can get in touch with any questions before check-in.
- If you can be there on arrival, greet your guests personally and give them a quick guided tour of the property.
- Small touches like fresh flowers, a gift basket with snacks, and nice travel-sized toiletries always make a good impression.
- Leave notes on appliances and electronics with instructions to make it easier for guests to figure out how to use them.
How to turn your home into a B&B
Converting your home into a bed and breakfast is both straightforward and complex. The infrastructure required by a small Bed & Breakfast is less than that needed for a large hotel. Still, it is not possible to simply open your doors to the paying public without making some modifications to your property.
A bed and breakfast is a hybrid of a boutique hotel and a private residence. Typically, the service is very personalized. The manager may live on-site, and it’s not uncommon for the manager and guests to interact.
You must plan ahead of time before even considering opening a bed and breakfast. Before you start your business, you must prepare. When it comes to running a bed and breakfast, having a clear roadmap of what to do in different situations makes things a lot easier.
In addition to the legal requirements for starting a bed and breakfast, here is a shortlist of some of the changes you will need to make if you are setting up a bed and breakfast in your home:
Hygiene in the Kitchen: A food poisoning outbreak could spell the end of your B&B dream, so keep the kitchen clean. Your B&B is a business. As such, you need to be aware of the laws and regulations in your country.
Your local Environmental Health office should be your first port of call, but you’ll need color-coded chopping boards, a food hygiene diary, and a food hygiene certification to get started.
Fire Regulation: You’ll need to conduct a fire risk assessment to determine what kind of fire extinguishers you’ll require and where they should be placed and the number and location of fire blankets and smoke and fire alarms. After that, your local fire department member will inspect your home and certify you.
A B&B places a strong emphasis on interacting with other guests. This is accomplished through the use of shared spaces. The following are examples of shared spaces:
Bathrooms – Some historic B&Bs do not provide private bathrooms in each room. You might find yourself reverting to your childhood, standing in line for a shower and hoping there is still hot water!
Community breakfast– The best part about staying at a B&B is the complimentary breakfast. The majority of bed and breakfast establishments will have a daily schedule of activities, including breakfast. Some B&Bs provide breakfast in the form of a buffet or a large dining room. The majority of B&Bs will customize breakfast to accommodate any dietary restrictions.
Living room – B&Bs are designed so that if you decide to relax on the property, you may interact with other travelers. If you choose to read your book in the living room, you should expect other guests to join you and engage in conversation with you.
Activities – Your B&B may offer excursions to local attractions and performances. If you decide to participate, you will be sharing the experience with the other travelers staying at the B&B.
You must create a concept that works for your customers and yourself to run a successful B&B. This is the primary reason visitors choose your B&B over a hotel as a hospitality business.
First and foremost, is your B&B open all year or only during certain seasons? This is determined by the location of your property and your personal preferences. For example, if your property is in an area with more tourists in the summer and fewer in the winter, a seasonal B&B makes the most sense.
You must also decide what services you will provide. For example, do you have access to a pool? Do you have special nights or weekends with a theme? Are you a wedding venue? Or do you provide recreational activities such as horseback riding or tennis?
You must also determine how many meals you will serve per day. For example, a B&B usually includes breakfast as well as some complimentary snacks and drinks. Do you want to charge extra for dinner on one or more nights of the week? Perhaps something unique, such as picnic baskets that guests can take to a nearby beach?
If you’ve always dreamt of turning your home into a vacation rental or B&B, it’s possible to become successful with the right plan in place. Remember to develop a solid business plan that will help you with budgeting, rules and regulations, and market analysis, and don’t forget to hire a property management company if needed. It’s well worth it to invest in a good plan so that you can have great results and enjoy the benefits of owning a successful vacation property.