Come up with a plan
Before embarking on any business, you must have a plan! A detailed, well-thought out plan can be the difference between failure and growth of your business. A good short term business plan includes:
- A brief summary
- A description detailing business information and competitive advantages
- A description of how your company will be structured and organized and the people responsible
- A market analysis investigating the industry outlook, target market, and competition
- A financial plan
- A marketing strategy
To protect your business and assets, consider forming a limited liability company or investing in business insurance.
Consider laws and rules
Before deciding to rent a property, you must ensure that it is zoned for short-term rental; certain places have regulations concerning rentals. Certain cities have different definitions of “short-term” ranging anywhere from a maximum of 30 to 180 nights per year. Zoning regulations also potentially limit the number of guests staying at a time. You also must consider the presence of Homeowner’s Associations, which may place regulations on the number of guests and/or pets at the property.
Short-term rentals are required to register, collect, and remit sales and lodging taxes. So, you must register your business for tax purposes. Your guests pay rental tax, but you must remit that tax to the correct the agency to avoid penalties and interest. Property management companies and online booking platforms will often automatically collect and pay the lodging taxes.
You must also ensure that you have a general business license and a short-term rental license. The business license is required of any business owner, and the short-term rental license proves your property complies with health and safety regulations.
Invest in security
Home security ensures the safety of your guests and property. Various security technologies like doorbell cameras not only catch suspicious activity, but help deter it altogether.
You want to be competitive while also covering all of your expenses. When setting your rate, consider:
- Mortgage and rent
- License and permit fees
- Insurance premiums
- Cleaning services
- Listing fees
- Landscaping and yard-work
- Homeowner’s association fees
Having a high guest turnover can make staying organized difficult and tedious. Online reservations, contactless and keyless checkin, reviews, tax remittance, and payment processing save a lot of time.
List, list, list!
There are endless options for listing your property, like the popular AirBnB and VRBO. Listing on as many places as possible helps expand your reach. Creating your own property website allows you to have more control over your listing and won’t require third-party service fees.
Social media is also a fantastic tool for not just listing your rental, but for posting updates, pictures, and promotions, and for engaging with potential and past guests.