Starting a Short-Term or “Vacation Rental” Business: Things for Property Owners to Understand
Frequent vacation rentals of a home is different than renting-out your home one-time each year for a month, or for 6 months, or for a year.
First, if you are using a house or apartment as a source of income from various renters- rather than from a one-time annual or 6 month rental- your property may need to be licensed by your state as a vacation, or “transient”, property.
Also, your local zoning laws have to allow for short-term vacation rentals, or you may need local approval in addition to a state license.
Check with your insurance provider that you are covered for injuries and accidents that result in harm to renters or to your home by vacationers. Homeowners insurance may or may not cover harm in the course of a vacation business (as opposed to residential use) being operated on the property.
If you purchase a house or have decided to use an existing property as a vacation rental, you may want to put the property into an LLC (an existing mortgage holder may not allow this).
Consult with an attorney when setting up a property for frequent rentals- whether they be daily, weekly, or monthly rentals.
Proper management and oversight is necessary to a successful vacation rental business. Potential guests want cohesiveness and responsiveness when planning a vacation. Arrivals, departures, and property preparation for guests must be as detailed as the other vacation properties (and as the hotels) with which you compete in your market. Positive online reviews are vital to keeping your property rented and income flowing. Cleanliness and “liking people” are really important to a vacation rental program. You are handling people’s valuable vacation time and limited spending budget. Guests want to have a good, safe, and easy experience. If you are more interested in the real estate and income aspects of vacation rentals, and don’t have the time or inclination to be in the “hospitality business”, then to create a solid business and get maximum return, you will need a vacation management company to handle all aspects of your vacation program. Call Nightlight Vacations to discuss your needs.