The short term rental market is a rapidly growing industry. AirDNA showed that in 2022, more than one million homes were listed for rent on a short-term basis on various platforms. The demand was expected to grow by 5.5% in 2023, a quarter of what it did in 2022.
There are many reasons why people are turning to Airbnb and other online platforms to rent their homes to travelers. For some people, it’s an added source of income that helps pay their mortgage or rent. For others, it can be a way to make extra money while they’re out of town for vacation or business trips.
And for many homeowners, it’s simply a fun way to meet new people. Also, they want to explore different parts of the country which they might otherwise never see if they didn’t travel.
No matter what your reason is for entering this industry, a solid strategy is essential to building a successful short term rental business.
How to Build a Successful Short Term Rental Business
Short term rental investments can be an excellent source of income, but it’s also a competitive market. To succeed in this business, you must first understand the basics of starting a short-term rental business. Then, consider the following strategies for building a booming short-term rental business.
- Choose the Right Location
If you live in a popular vacation destination, you may already have access to many potential customers. But even if you’re not in a tourist hotspot, you can still find ways to attract guests worldwide. For example, you can offer discounts on fishing gear and supplies if you live near a beach or lake where people go for fishing or boating.
You can also market your short term rental property as an alternative place to stay if tourists want to avoid driving back to town after dark (or during rush hour). For example, if there is a concert near your place on a Friday night, all the hotels might be sold out.
Guests may prefer to stay somewhere nearby rather than drive all night only to arrive exhausted and cranky with no time for fun activities before going back to work on Monday morning.
- Create a Business Plan
A thorough business plan will help you identify and calculate the risks, set goals, and measure success. It also enables you to make smart decisions about using your time and money.
It’s essential to have a comprehensive business plan when starting your short term rental investment because it will serve as a guide for the first few years of your business. This should include a description of your rental business, information about your target market and competition, financial projections, and more.
- Set Up Your Online Presence
Create a website or blog to promote your rental property investment, share photos and videos of your place, and accept reservations. The website should include information about the property, location, and amenities. It should also include contact information of the property manager or owner and directions to the property.
Check local regulations and laws before setting up your website or blog so that you won’t face any legal issues later.
- Make Your Image Resonate With Guests
Your website should have a vital visual element that will draw people in and make them want to visit your short term rental property or stay there again. This includes photos of the property and any available amenities, such as a gym or swimming pool.
Also, consider using images of your property with the previous guests enjoying themselves. This will help create an emotional connection between potential guests and the place they want to visit the next time they travel.
- Provide Free Access to Amenities and Facilities
Offer amenities and facilities that will attract guests and make them want to stay longer. This includes free Wi-Fi, cable TV, and kitchen access complete with pots and pans, dishware, utensils, and appliances.
If there are available amenities in your short term rental, it makes it easier for you to keep your guests happy and satisfied. Hence, they won’t want to leave as soon as possible.
- Offer a Competitive Price
Pricing is one of the most critical factors in a successful rental property investment. If your price is too high, guests will not book your place. If the price is too low, you won’t earn money in the long run.
One of the most reliable ways to find the right price for your property is to look at the other rental properties that offer the same services and facilities and see how much they’re charging. You can search for similar properties in your area on sites like Airbnb or HomeAway.com. Use these as benchmarks for pricing your property, so it’s competitive with other offerings on the market.
- Create an Attractive Listing
Online rental listing is the most effective way to advertise your short term rental investment. They are also the first thing that potential guests and tenants see when looking for a place to stay.
Make sure your listing is up-to-date, accurate, and searchable for renters. You can list your business on websites like Airbnb, VRBO, HomeAway, and other websites that allow people to rent their homes for short period. Here are some information that should be available on each of your listings.
- Photos of your property.
- Descriptions of the amenities and facilities that they can access.
- Any special offerings or promotions.
- Email address and phone number of the person in charge.
- Leverage Existing Network
One of the best things about rental property investments is that they are built on relationships. When someone stays in one of your properties, you become part of their story, and they want to share it with their friends and family.
If you have friends or family coming in the area of your rental business, ask them if they’d like to stay at your property.
If you also have connections through work, ask if any of your co-workers would be interested in staying at your property while on business travel. This works exceptionally well for professionals who travel frequently.
- Get Insurance Coverage
If you’re a property owner and want to rent out your home, condo, or apartments for rent in Sunnyvale on a short term rental basis, there are extra considerations regarding insurance. The best way to protect yourself as a short-term rental owner is by shopping around for an insurance policy. Here are some the best types of insurance you need for your rental business.
Property Insurance: This type of coverage will pay for the repair or replace your property if it is damaged or destroyed by fire or other natural disasters. It may also cover liability if someone is injured on your property and sues you for damages.
Property insurance may include coverage for extra living expenses if you have to temporarily move out while repairs are being made following an incident that causes damage to your property.
Liability Insurance: This type of coverage can help pay legal fees associated with lawsuits against you due to injuries or damage sustained while staying in your rental property. Liability policies typically limit how much they will pay per incident per year. It’s essential to consider how much coverage you need before getting any liability policy.
The short term rental investment is booming. It’s a growing hospitality industry sector, and you can gain passive income from rental property.
If you want to succeed in this business, you need a strategy that works for you. You need to know what works best, what doesn’t, and how to use your time and effort effectively.
With effective strategic planning, you can build a short-term rental property investment that will grow with the economy and take advantage of new opportunities.