Online Vacation Rental Service
Startup Costs: Under $2,000
Home Based: Can be operated from home.
Part Time: Can be operated part-time.
Franchises Available? No
Online Operation? Yes
In 2021, the global vacation rental market size was valued at $74.64 billion, according to Grand View Research, and is set to grow at a compound annual growth rate of 5.3% until at least 2030. By designing and posting a “Vacation Homes for Rent” website, you will be tapping into this fast-growing sector by assisting people in finding the perfect vacation destination. This type of online venture can be expanded to include every major tourist area within the United States and Canada, and its growth can be fueled using low-cost conventional print advertising platforms.
Ask the Expert: Allison Jackson, Owner of Cape May Condo
What is the first step to getting started in the online vacation rental industry?
Begin by researching areas with both high levels of tourism and with homes in a suitable price range. Think about the places where you've vacationed and which you know intimately. For example, we've vacationed in Cape May, New Jersey for the past 20-plus years and have extensive knowledge of the market.
One of the key aspects of this business is to seek out owners of vacation homes who wish to rent them as a method to perhaps help finance the home’s purchase or offset other costs of ownership. The longer your company operates, and the larger its list of homes becomes, the more successful you will be.
Is the industry growing?
With VRBO and Airbnb, yes, this is an industry that’s expanding quickly. I slowly increase my rental rates and build a foundation of repeat vacationers, so I would say conservatively that you could grow at a rate of 3% to 5% each year.
What are the current trends in online vacation rentals and what type of person is a great fit to try this?
Short-term rentals tend to be fairly recession-proof. However, given the current real estate market, it can be incredibly difficult to get a foot in the door without a substantial amount of cash. The right candidate is someone who is organized and resilient. It's tough to get started, but once you have a system in place, it gets easier.
How much money can a person expect to make in the first year and in five years?
The first year we broke even, then in years two to four started generating $10,000 to $15,000 per year. It really depends upon the market and how many rentals you have each season.
What kind of experience/training do you need?
Having some real estate and financial knowledge can be helpful, but no special training is required… although being a real estate agent in the area you're looking to buy would be highly advantageous.
What do you wish you’d known when you were starting out?
The importance of getting in early, buying more and having the right partners in place (realtors, property managers, mortgage brokers, etc.).
Who are your customers?
Families/travelers within a three- to four-hour drive of Cape May. We find our customers from platforms like VRBO and Facebook, as well as local realtors and friends/family.
The goal is to persuade people to list their vacation home for rent on your site, which should be indexed by geographic location and type of rental accommodation for search purposes. You can do this persuading yourself, or employ sales consultants across the country to solicit listings. In exchange for an annual listing fee, vacation homeowners would receive a bold heading that links to a page within the site that gives details and contact information including photographs about their vacation home for rent.
Promote the site by placing low-cost classified advertisements in community newspapers under the “vacation properties for rent” section. Your ad could read, “Thousands of vacation homes for rent. Check them out at…” There are sales programs available that will enable your ad to be featured in as many as 1,500 newspapers per month for less than $1,000, so contact your local community newspaper for details.