What is a short term rental?
A short term rental is a vacation rental, typically for a period of less than 30 days. In recent years, the short term rental business has taken off.
More and more people are choosing to rent out rooms or properties for short periods of time, instead of using traditional methods such as hotels or bed and breakfasts.
In this blog post, we will discuss how to start a short term rental business!
Check Local Zoning Laws
Checking local zoning laws is one of the first steps you should take when starting a short term rental business.
Whether you are looking to make money with Airbnb or with low-income rentals such as Section 8 arbitrage, there are always certain regulations to follow if you want to make money as a landlord.
Zoning laws can regulate the minimum length of stay for guests, as well as the number of occupants allowed per unit.
They may also place restrictions on the use of common areas, such as pools and hot tubs.
Familiarizing yourself with the local zoning laws will help you to choose a property that is compliant with regulations and avoid any potential problems down the road.
Once you have found a suitable property, be sure to register your business with the city or town clerk’s office.
This will ensure that your business is properly licensed and permitted to operate in the area.
By taking these simple steps, you can ensure that your short term rental business gets off on the right foot.
Consider Forming a Business Entity
If you are wondering how to short term rental, you should consider forming a business entity.
This will protect your personal assets in case your business is sued. You can choose from several different business structures, but the most common for short term rentals are LLCs.
Talk to a lawyer or accountant to help you choose the best structure for your business.
Trend on the Rise
Put an Accessory Dwelling Unit (ADU) in your backyard. This is a smaller living space that can be used as a rental. ADUs are becoming increasingly popular as they offer an affordable way to get started in short-term rentals without having to buy a property.
Create Management Strategy
Before you start your short term rental business, you need to create a management strategy.
This will help you to ensure that your property is well-maintained and that your guests have a positive experience.
There are a few key elements to include in your strategy:
First, you need to develop systems for marketing, cleaning, and maintenance. These cheap ways to boost home value can also increase your rate per night.
You should create a schedule for when you will list your property, and how you will clean between guests.
You should also develop a system for responding to guest inquiries and managing bookings.
Second, you need to establish policies and procedures for your business.
For example, you should decide what type of guests you will accept, what types of damage will result in a security deposit being withheld, and how late arrivals will be handled.
Third, you need to create a budget for your business. This budget should include costs such as marketing, cleaning supplies, and insurance.
It is also important to set aside money for unexpected repairs or maintenance issues.
By taking the time to develop a management strategy, you can help ensure that your short term rental business runs smoothly and successfully so you earn money with your rental property.
Trend on the Rise
Themed rentals. This can include anything from beach-themed apartments to decorating like your favorite TV show. Themed rentals offer guests a unique and memorable experience that they can’t get anywhere else. And with the right marketing, you can attract guests from all over the world.
Find a Great Property and Decorate Appropriately
One of the most important aspects of starting a short term rental business is finding a great property.
The property you choose should be in a desirable location, and it should be well-maintained. It should also have enough space to comfortably accommodate your guests.
Once you’ve found the perfect property, you can start decorating it to appeal to your target market.
If you’re catering to business travelers, for example, you’ll want to make sure that your property has plenty of work space and modern amenities.
If you’re aiming for families, on the other hand, you’ll want to make sure that your property is kid-friendly and has plenty of activities nearby.
By taking the time to find a great property and decorate it appropriately, you can ensure that your business is off to a strong start.
Tactic for Success
Give a small welcome gift to guests upon their arrival. This doesn’t have to be anything expensive – a simple basket of snacks or a bottle of wine can go a long way. By going the extra mile, you can ensure that your guests have a positive experience and are more likely to book with you again.
Price Your Rental
Pricing your rental is an important step. After all, you want to be sure that you’re charging enough to cover your costs and make a profit, but not so much that you’re deterring potential guests.
Here are a few tips when pricing your rental:
- Do your research. Check out similar rentals in the area to get an idea of what they’re charging. This will give you a good starting point for pricing your own rental.
- Consider your costs. Be sure to factor in all of your costs, including advertising, cleaning, utilities, and any other expenses associated with running your business.
- Know your audience. Think about who your target market is and what they’re willing to pay. For instance, if you’re aiming for budget-minded travelers, you’ll want to keep your prices low but if you’re targeting luxury travelers, you can charge a bit more.
- Offer discounts and specials. Offering discounts and special deals can help attract guests and fill up vacant dates.
Just be sure that you don’t discount your prices too much, or you’ll risk losing money.
Tactic for Success
Reduce your rates in the beginning in order to get more bookings and build up your reviews. Reviews build trust by offering competitive rates, you’ll be able to attract more guests and get your business off to a strong start.
Ways to make your home stand out from the rest:
- Stylishly Furnish Your Home – You can do this affordably by shopping at secondhand stores, discount home good stores, or online marketplaces.
- Include Unique Amenities – For instance, you could offer bikes, or a kayak for guests to use on a nearby lake.
- Get Professional Photos Taken – Professional photos will make your rental look more appealing and attract more guests.
- Have a Great Description – Your rental listing should have a great description that accurately represents your property. Be sure to include information about your property’s amenities, location, and anything else unique.
- Partner with Local Businesses – You can make your rental property more appealing to guests by partnering with local businesses. For instance, you could offer discounts to guests for dinner when they book your rental.
Get the Word Out
Once you’ve got your property set up and your management strategy in place, it’s time to start promoting your business.
There are a number of ways to do this, but one of the most effective is through online listing sites.
These sites allow potential guests to search for rentals in their desired location. By creating a listing on one or more of these sites, you can reach a large audience of potential guests.
In addition to online listings, you can also promote your business through word-of-mouth and traditional advertising methods.
If you have friends or family in the area, be sure to tell them about your rental. Join local Facebook groups and post about your rental.
You can also put up flyers or run ads in local publications. By promoting your business in a variety of ways, you can ensure that it gets the exposure it needs to succeed.
Things to increase having a profitable short term rental:
- Select a Great Location – Look for a property that’s in a desirable area with plenty of things to do nearby
- Use Dynamic Pricing – Use dynamic pricing to your advantage by charging more on weekends and during peak travel periods. This will help you maximize your profits while still attracting guests.
- Market Property – Marketing the property will help ensure a steady stream of guests.
- Provide Excellent Customer Service – Providing excellent customer service is essential for keeping guests happy and coming back. Be responsive to their needs and address any issues that come up quickly.
Wrapping Up
Remember, planning and preparation are key when starting any new venture, so make sure you take the time to map out your business plan and set yourself up for success.
With a bit of hard work and some luck, your short-term rental business could soon be thriving!
Tara is a licensed real estate agent in Southwest, FL. She helps buyers and investors find their dream home by educating them about real estate and how they can use it as an investment.
