Vacation Rental

What Is A Vacation Rental Business?

In short, a vacation rental property is a private property that is used for the purpose of providing a vacation home for travelers on a short-term, rental basis. They are a great alternative to hotels, and give renters a great opportunity to get an authentic experience to whatever place they may find themselves in. Further, vacation rental properties are a solid investment for those looking to invest into properties and real estate. 

Vacation rental property businesses are all the foundational functions and processes behind maintaining the properties to a standard that is profitable and sustainable—such functions that go into these types of businesses are financial, acquiring property, property maintenance, marketing and advertising, and property management systems. 

Are Vacation Rentals Profitable?

There are quite a few benefits that come with starting a vacation rental property business. Before we get into these benefits, it must be stated that in order to see positive turnout, there must be wise investment, lots of consideration/thorough research, and having a solid plan. Some other things to consider before you go all-in on a vacation rental property business, is the location you wish to establish your properties on, demand, returns on investments (ROIs), and seasonality. 


  • Extra income: Vacation rental properties are a great source for extra income and according to AirDNA, revenues from these businesses rose to about $56,000 on average, in 2021. If you own a vacation rental home, for 15 you can rent it out without having to report the income to the IRS, which is another nice benefit. 
  • Wide market: Virtually anywhere you go, there is a need for vacation rental properties, or in the very least, a place for travelers to stay. You would be hard-pressed to find a vacation rental property performing low, if you do the right research and make the best well-informed business decisions regarding your investment. 
  • Real Estate Appreciation: It is widely known that real estate is one of the best investments you can make, as real estate typically appreciates over time and not depreciate, such as the case with cars or other investments. 
  • Flexibility: You will hardly ever find yourself needing to rent out a vacation rental home for an annual period of time. They come with the flexibility to rent it out for no longer than a couple of months at a time, and no less than a few days at a time. There is a lot of opportunity for flexibility with such properties. 
  • Recession-dependable: Vacation rental homes generally are known to be resistant to the hardships of recessions. During recessions, driveable and more available type of vacations perform well, as they are accessible to a wide variety of people and families. This means that your vacation home will always be needed and sought after by people looking to vacation, despite a market indicative of a recession. 
  • Tax benefits: Vacation rental properties benefit from certain tax exemptions and write-offs that other businesses and real estate investors are offered. 

How Much Money Should I Invest?

It is encouraged by many vacation rental property investors to supply a 10% down payment on your property. 

Your monthly mortgage payment is usually going to be your biggest expense. Additionally, vacation rental homes require a more expensive homeowners insurance rate, than that of your main residence. With that in mind, you will also have to factor in property taxes for your vacation rental home. This will vary by your state and even your city, so make sure you do thorough research on this. As for maintenance, experts recommend budgeting 1% of how much your property is worth for its maintenance. For example, let’s say you have a home you purchased for $500,000—you would set aside $5,000 annually for maintenance. This is for things such as repainting, fixing floors, plumbing, lighting and everything in between. 

Lastly, the answer to this question varies widely depending on the factors above, however if you budget accordingly for these things, you can find just how much you might need. It is always smart to think you need more than you do, due to the market changes that fluctuate. 

Where Should I Buy Vacation Rental Property?

While the market for vacation rental property homes changes quite often, there is one thing certain for the upcoming trends in vacationing—people are more eager to venture out into more recluse, rural, and outdoorsy escapes and adventures. What does this mean for you? Well, perhaps this means you should try to find vacation rental properties that are elemental to these trends. Some places to consider for 2023: 

  • Gatlinburg, Tennessee: If you’ve been doing your own research, you may have seen Gatlinburg appear on your radar a few times. That is because this city is ever-growing and is also an entryway to the Great Smokey Mountains–one of the best outdoors getaways in the United States. Cabin-homes that range from cozy to luxury are a great investment for places such as Gatlinburg. 
  • The Poconos, Pennsylvania: The Poconos is a great place to invest in a vacation rental property home, due to the market value and also the location providing travelers year-round activities and entertainment, which means year-round profit. Additionally, it is close to New York and other popular cities in Pennsylvania. 
  • Cle Elum, Washington: Cle Elum is located in the heart of the Cascades, and is a hidden gem in the Pacific Northwest. With a lot of historic value in this town, Cle Elum provides vacation goers with a wide variety of outdoor activities, as well as some luxury vacation time. It is close to Seattle and other popular hiking and state parks. 
  • Lake Anna, Virginia: Lake Anna offers homeowners decent rates of about 12.2%, which already makes it a really great location to think about investing in. Further, the location is right on the second largest lake in Virginia, with sparkling waters and soft beaches that go for miles. This place is great for the summertime as well as for Spring and Fall fun. 
  • Palm Coast, Florida: Florida, while a great and well-popularized place for vacationing amongst people all across the country, the rates can sometimes get really expensive. However, Palm Coast gives a happy medium for both investors and vacationers alike. There is a high opportunity for some positive ROIs and sustainable profits in this place, and of course the beautiful beaches and nice weather are a plus. 

How To Create A Business Plan

Before you jump head first into buying and starting a vacation rental property, it is smart to come up with a detailed plan that will get you to where you want to go, successfully. 

Although a vacation rental home property may seem like a personal investment, one should treat it as a business—this mindset will, in turn, lend you the most profitable returns. 

Finding Property

When in the hunt for the perfect property for your vacation rental, there are two components to keep in mind. The first is–you should do your research about the local laws such as HOAs and zoning laws, in the area you would like to start a vacation rental business in. This can make or break your engagements and goals for your property, as some areas are more strict about STR (Short-term Rental) leasings. 

Consider Financing & Certification Options

When it comes to starting your vacation rental business, getting your finances in order should be one of the first things you do. It is important to do the following: 

  • Obtain a license. Many states and cities require certain business licenses to operate and collect taxes/revenues from clients. 
  • Open a business banking account. Avoid joining your business finances with your personal finances. This makes things messy, and can get confusing when you need to submit taxes, forms and anything in between. 
  • Get the necessary permits. In order to get more insurance coverage on your properties, certain home sharing and real estate endorsements and permits may be required depending where you live. It is important to get these things in order before you launch your business. 

Furnish Your Vacation Rental

In order to market your vacation rental property, it must look appealing. Furnishing and staging for your rental home is a great way to bring in business, and should be taken seriously. Let Valta help you furnish your property to look its absolute best. Valta’s furnishing services are done by industry experts, and will combine both your tastes and the best styling choices based on market trends to your vacation rental, which is proven to increase clientele. 

Property Management

Hiring a property management company is a great way at maintaining your properties to a high degree. It also saves you a lot of time and money in the long run. While services will cost you some money, the benefits surely outweigh the cost. A professional property management company will take care of cleaning your vacation rental, making sure bookings are going accordingly, making sure your listings are up to par on all digital fronts, will keep guests satisfied, and will keep your property looking great year round. These are the small details of the vacation rental property business that sometimes get overlooked. It’s smart to hire professionals to do these things, especially if you have other responsibilities on your plate.

Setting Prices

Pricing your vacation rental property can be a tricky task. You want to make sure you are competitive with other similar properties, but you also want to make sure you are making a profit. Here are a few things to consider when pricing your vacation rental property: 

  • Location: Is your property in a popular vacation destination? If so, you can likely charge a higher price. 
  • Size: Is your property large enough to comfortably accommodate a family or group of friends? If so, you can also charge a higher price. 
  • Amenities: Does your property have any special amenities that will appeal to vacationers? If so, you can factor this into your pricing. 
  • Compare Similar Properties: Take a look at similar properties in your area and see what they are charging. This will give you a good idea of what the going rate is for a vacation rental property. 
  • Set a Fair Price: Once you have considered all of the above factors, you can set a fair price for your vacation rental property.

Listing Your Properties

Listing your vacation rental property the right way is crucial if you want your profits to be high and not the alternative (breaking even). 

You’re going to want to list your property on Airbnb, VRBO, and Vacasa, with the following characteristics: 

  • Take really nice listing photos for your properties, highlighting all of its best features. 
  • Write a detailed description of said property, with honesty and colorful descriptors. 
  • Always make sure your reservation booking systems are up to date and accurate. You never want to double book. 
  • Include extra amenities that will encourage guests to give your listing a shot. 
  • Write an eye-catching title for your vacation rental property that will make it stand out. 


With a little bit of planning and some basic knowledge, starting a vacation rental business can be a relatively smooth process. There are a few key things to keep in mind, such as understanding the local market, having a well-appointed property, and marketing your listing effectively. By following these tips, you can be on your way to becoming a successful vacation rental entrepreneur.