While turning your property into a vacation rental is a great way to earn extra income, getting started can feel a little overwhelming. To help you set up your short-term rental for the first time, we’ve created this Vacation Rental Startup Checklist as a guide for new hosts.
If you follow the steps outlined here and check everything off this list, you’ll have successfully set up a thriving vacation rental business.
1. Create Your Business
Before you start setting up your Airbnb or vacation rental, you’ll want to make sure that it’s both legal and profitable to do so in your area. Here are the steps to take.
⃞ Confirm Legal & Tax Requirements
First things first, you’ll want to review any legal requirements for your area. While some local governments are basically a free-for-all, others may require a permit or impose fire code and other regulations. And some cities prohibit short-term rentals completely.
Check with your city office or other local government to make sure it’s legal to have a short-term rental in your area, and what (if any) additional local taxes apply.
⃞ Make a Business Plan
Once you’ve confirmed that it’s legal to run a short-term rental in your area, you’ll want to create a business plan.
Your business plan can be as simple or complex as you want, but you’ll want to get an idea of how profitable your business can be. Do this by estimating your revenue and expenses.
Estimating Revenue – To get an estimate of your property’s revenue potential, look at similar properties in your area on Airbnb. Take note of the average nightly rates (including fees) and number of nights booked, and assume you’ll fall somewhere in this range. You can also check out AirDNA MarketMinder for analytics and data on your area.
Estimating Expenses – There are a lot of expenses that come with setting up and running an Airbnb. Here are some to keep in mind:
- Startup costs – buying furniture, amenities, and supplies – see our inventory spreadsheet for more
- Management costs – everything from repairs to landscaping to keeping your property stocked
- Cleaning costs – depends on if you’re doing turnovers yourself, or outsourcing to a cleaning company
- Taxes – property taxes and any local short-term rental taxes
- Insurance – your homeowner’s insurance usually won’t cover short-term rental activity, so you’ll need short-term rental insurance
To get a better sense of potential profitability, you might also consider consulting with an experienced property management company in your area. Most will have valuable insights into how to create a vacation rental business. But keep in mind that their incentive is to sell you on their management services.
⃞ Form a Business Entity
Once you’ve confirmed that starting a vacation rental business in your area is both legal and potentially profitable, it’s a good idea to form a legal business entity like an LLC or S Corporation. Here’s a helpful guide on how to form an LLC.
2. Prepare Your Property For Guests
With your business and legal requirements taken care of, you can start setting up your property to host short-term guests.
We’re assuming that you already own a property and that it doesn’t need any significant repairs or renovations. If that’s not the case, you’ll have some extra work to do (namely buying and/or renovating a property) before you can move on to these next steps.
⃞ Furnish & Stock Your Property
Our Airbnb host checklist has a list of the furniture, amenities, and supplies you need to set up your property as a vacation rental for the first time. This includes everything you’ll want to have in your kitchen, bedrooms, bathrooms, living areas, and outdoor spaces.
You can download and modify our vacation rental inventory spreadsheet as a great way to get started.
⃞ Plan for Cleaning & Turnovers
Before you take any bookings, you’ll want to have a plan in place for how you’ll handle cleaning your property in between bookings.
You might hire a cleaning company or do it yourself (in which case you’ll need to buy cleaning supplies and create a cleaning/turnover checklist). But either way, you’ll want to be ready to hit the ground running with turnovers as soon as you start taking bookings.
⃞ Purchase Vacation Rental Insurance
Another important step to take before you host any guests is to have an appropriate insurance policy in place. In most cases, your homeowner’s insurance policy won’t cover damage and liability from short-term rental activity. So it’s important to have a vacation rental insurance policy (even if you’re hosting on Airbnb).
We recommend Proper Insurance for their comprehensive protection. You can get an online quote in 5 minutes.
3. List Your Property
Once your property is set up for guests, you’re ready to list your property on Airbnb. Here are the steps to take when listing your property on Airbnb and other vacation rental listing sites.
⃞ Take Quality Photos
This is an important step, as your photos can be the difference between you getting bookings and you getting buried in Airbnb search results. Check out these tips on how to take better listing photos.
⃞ Create Your Airbnb Listing
Once you have some quality photos of your property, you’re ready to create your Airbnb listing. Aside from your photos, your listing title and description is what will sell potential guests on your property. So take the time to write a compelling Airbnb listing title and informative description.
For more tips on listing your property on Airbnb, check out our post on how to optimize your Airbnb listing.
⃞ List on Other Channels
Aside from Airbnb, there are lots of other vacation rental listing sites for even more exposure. Vrbo and Booking.com are two of the biggest ones, and there are many, many other smaller niche listing sites.
If you plan to list on more than just Airbnb, we recommend using a channel manager, which will sync your calendars and make your life much easier. In fact, even if you only plan to list on Airbnb, it’s worth looking into a channel manager for their convenient automation features.
4. Manage & Grow Your Business
Congratulations, you’ve now listed your property on Airbnb! And now the fun begins.
As you start taking your first bookings, here are a few steps you’ll want to take to manage and grow your vacation rental business.
⃞ Respond to Guest Messages
One of the most important things you can do as a host is to be responsive to guest messages on Airbnb. Responding quickly to messages will improve your Airbnb search rankings, and provide a better experience for your guests, which gets you more bookings and better reviews.
If you aren’t prepared to be responding to messages throughout the day, you’ll want to hire a property manager or virtual assistant who can, or use vacation rental management software to take advantage of automated messaging.
⃞ Manage Bookings & Turnovers
This is where your plan for cleaning and turnovers comes into play. However you’re handling turnovers, this will be one of the biggest parts of managing your Airbnb operations. Whether you’re meeting guests in person or using a smart lock, you’ll need to have a system in place to help guests get in and out of your property, and enjoy their stay.
⃞ Optimize Your Pricing
Optimizing your pricing is one of the single best ways to maximize the profits from your Airbnb or vacation rental. Check out these tips how to set your Airbnb rates.
We also strongly recommend using a dynamic pricing tool like Wheelhouse to automatically optimize your pricing.
⃞ Market Your Business
Along with managing your daily operations, marketing your properties and business is another item in this list that is ongoing. Check out our Vacation Rental Marketing Guide for advice about how to market your Airbnb or vacation rental business.
⃞ Get Your Own Booking Website
Last (but not least) is to have your own direct booking website. While listing on Airbnb is a great way to get bookings, having your own website takes your business to the next level.
By allowing guests to book directly through you, you gain some independence from Airbnb and other sites, and maximize your profits by eliminating booking fees.
Plus, it’s really easy to create your own booking website these days. Check out our guide on how create a direct booking website.
Download: Starting an Airbnb Checklist
Here’s a recap of our vacation rental startup checklist for getting your Airbnb or other short-term rental off the ground. Scroll down for an image you can download, save, or print.
- Set up your business
- ⃞ Confirm legal & tax requirements
- ⃞ Make a business plan
- ⃞ Form a business entity
- Prepare your property for guests
- ⃞ Furnish and stock your property
- ⃞ Plan for cleaning and turnovers
- ⃞ Purchase vacation rental insurance
- List your property
- ⃞ Take quality photos
- ⃞ Create your Airbnb listing
- ⃞ List on other channels (with a channel manager)
- Manage & grow your business
- ⃞ Respond to guest messages
- ⃞ Manage bookings & turnovers
- ⃞ Optimize your pricing
- ⃞ Market your business
- ⃞ Get your own booking website
