Are you ready to grow your vacation rental business? Scaling a business is no small feat, but it’s absolutely possible with the right tools and systems in place. Below, find 12 helpful tips for scaling your vacation rental business and continuing to grow and succeed as a vacation rental owner.
- 1. Set Goals and Strategies
- 2. Start Local
- 3. Look Into Nearby Markets
- 4. Build a Reliable Team
- 5. Know All Rules and Regulations
- 6. Automate Repetitive Tasks
- 7. Find a PMS that Fits Your Needs
- 8. Hire a Professional Bookkeeper
- 9. Use Dynamic Pricing
- 10. Don’t Forget the Guest Experience
- 11. Get to Know Your Rental Locations
- 12. Maintain Consistent Branding
- Main Takeaways
1. Set Goals and Strategies
The first thing you’ll want to do if you’re thinking about scaling your business is to set specific goals with detailed strategies to achieve them. It’s best to use SMART goals for this purpose.
SMART goals are goals that are Specific, Measurable, Achievable, Relevant, and Time-Bound. Specific means that your goal needs to be very clear. You should be able to explain what you want to achieve, why you want to achieve it, and which resources are involved.
Measurable means that the goal is easy to track and that you can assess your progress toward it. When a goal is measurable, you can answer the questions, “How much?” “How many?” and “How will I know when I’ve accomplished this?”
Achievable means your goal is realistic and attainable, rather than being an impossible dream. Meanwhile, Relevant means that the goal matters to you and aligns with where you are currently. Finally, Time-Bound indicates that your goal has a date by which it should be completed.
Non-SMART Goal: I want to scale my vacation rental business.
SMART Goal: I want to scale my vacation rental business by purchasing two additional vacation rental properties within the next year.
Once you’ve established your goals, it’s beneficial to set up strategies to achieve them. Check out our detailed guide on vacation rental business strategies.
2. Start Local
When scaling your vacation rental business, you’ll want to start locally in the area where your existing vacation rental property is located. Start out with three to five total properties in the same general area. This will be much easier to manage than five properties that are spread hours apart. You’ll be able to stop by the different properties as needed while you’re getting them up off the ground.
With multiple vacation rental properties in the same area, you can also take advantage of the concept of economy of scale. This refers to buying products and services in bulk so that they’re cheaper. For example, consider the cost of hiring one cleaning company to clean your vacation rental in one city and hiring another cleaning company to clean your second vacation rental in another location. This will be much more expensive than hiring one cleaning company to clean two vacation rentals that are located close together.
3. Look Into Nearby Markets
Once you’ve achieved a thriving local business with three to five properties, it’s time to expand into a nearby market. Start off with a single property in this new market until you have it running successfully. It’s best to choose a nearby market because it’s easier to manage multiple properties that are close together, rather than ones that are far apart. In addition, since you’ll already be familiar with the nearby area, it’ll be much easier for you to get to know the new market you’ve expanded into.
4. Build a Reliable Team
While you may want to do everything on your own, it’s just not possible for a single person to successfully scale a vacation rental business. There isn’t enough time in the day for you to complete all the work that will need to be done! That’s why it’s so important to find a team that you can trust and rely on. Typically, this team will consist of a cleaning crew and maintenance personnel. Depending on the size of your vacation rental business, you may also want to hire a property manager to help you out with the day-to-day tasks of running vacation rentals.
5. Know All Rules and Regulations
When you’re scaling your vacation rental business, it’s crucial to research all of the local rules and restrictions regarding vacation rentals. You’ll need to figure out if any permits are required and if there are any homeowners association conflicts as well. This isn’t as frequently discussed as other aspects of scaling your business, but it may be the most important. If you break laws and fail to follow regulations, your vacation rentals can potentially be shut down.
6. Automate Repetitive Tasks
Automation is key when scaling your vacation rental business. When you automate, you save time and effort, freeing up your schedule so that you can focus on the aspects of the business that matter the most. You can automate everything from guest communications, rental cleaning checklists, and various reports to your crew’s schedule. A good property management system can really come in handy since most come with automation tools built-in.
7. Find a PMS that Fits Your Needs
Regardless of their size, all vacation rental businesses can benefit from using a property management system or PMS. This is a type of software that puts all of your bookings in one place. Typically, a PMS also has a unified inbox where all of your guest communications are located. It allows you to create reports and use various accounting tools. It can even control your listings on multiple channels from one central location. There are many different property management systems out there, and they all have different features and costs associated with them. Take the time to do some research and determine which PMS is best for your vacation rental business.
8. Hire a Professional Bookkeeper
Sometimes, a property management system won’t offer all of the data and reports you’ll need to successfully run your growing business and keep track of its progress. This is when it’s helpful to hire a professional accountant or bookkeeper to help you keep track of your cash flow. When you’re keeping track of everything yourself, there’s a larger margin for error, but a professional bookkeeper will have the education and experience to do everything correctly and keep your finances well-organized.
9. Use Dynamic Pricing
When scaling your business, you can increase your revenue by using a dynamic pricing strategy. This means that your prices will change based on changes in demand in the area. Tools like AirDNA are very helpful in automatically adjusting your vacation rental pricing and helping you make the most of your vacation rental business.
10. Don’t Forget the Guest Experience
When you’re scaling your business, it’s easy to become much more focused on the business aspect of things, rather than the guest experience. However, this is exactly what you don’t want to do, since the guest experience is essential to earning positive reviews that will bring in more bookings. The real success lies in providing an amazing experience to your guests, rather than focusing on all the behind-the-scenes factors that go into the vacation rental business. Strive to find a good balance between running the business and ensuring your guests have a great time. If you’re struggling to find this balance, then hiring a property manager might be a wise choice for you. That way, they can focus on your guests while you can put your energy into continuing to scale your vacation rental business.
11. Get to Know Your Rental Locations
When scaling your vacation rental business, it’s essential to get to know every area where you have vacation rentals. Guests love the “live like a local” experience and are sure to ask you for recommendations. It’s important to know the area well so that you can offer them reliable suggestions and so you can put together a comprehensive welcome binder filled with local restaurants, entertainment, and more. To become a successful rental owner you must keep your guests satisfied.
If you’re utterly clueless about the area, that can reflect negatively on you and your vacation rental business as a whole, even if the property itself is excellent.
12. Maintain Consistent Branding
Branding is key to your success when you’re scaling your vacation rental business. Keep your branding consistent across your vacation rental websites, social media profiles, and anywhere else your company is online. Branding allows guests to recognize your company. Having a consistent brand can cause guests who have stayed at one of your rentals to be more likely to stay at others because they already know and trust your brand. If you can maintain your rental business branding properly, you will get opportunities of building wealth through rental properties.
Here are our 12 tips for scaling your vacation rental business:
- Set goals and strategies using the SMART goal method.
- Start local with three to five properties before expanding to a new area.
- Look into nearby markets rather than areas that are hours away.
- Build a reliable team that you can depend on.
- Know all rules and regulations for every area where you have a vacation rental.
- Automate repetitive tasks so that you can spend your time on the more critical parts of your business.
- Find a PMS that fits your needs so that you can keep your business organized.
- Hire a professional bookkeeper to keep track of your finances.
- Use dynamic pricing to make the most of your vacation rental properties.
- Don’t forget the guest experience because you’re too focused on the business end of things.
- Get to know your rental locations so that you can offer good recommendations to your guests.
- Maintain consistent branding across your website and social media profiles.