15 Strategies To Make Your Home Rental Business Successful

Whether it’s a full house, an apartment or even one (tiny!) room, the vacation rental and home rental business is getting larger and larger by the day. Between Airbnb, HomeAway, and FlipKey alone, there are nearly 4 million listings worldwide.

Perhaps you see an opportunity for yourself to start a home rental business. Go for it!! We did, eight years ago now, and we’ve been happy with the results.

We approached marketing our condominium by applying the same principles we teach to small business owners:

1. Target: Who do we want to appeal to and, by definition, who could we not serve well?
2. Product: What do we want to provide in terms of amenities?
3. Pricing: How much to charge, under what terms and conditions and payment options?
4. Channels: Which reservation services do we select? (e.g., HomeAway, Airbnb, local tourism platform)
5. Marketing and Message: How do we promote ourselves to distinguish us from the competition?

Here are some basic strategies and tips we’ve learned since starting our home rental business:

• Do your homework first. What kinds of travelers come to your area? How long do they typically stay? What activities and attractions are most frequently visited? What is the competition in your area offering and charging? Tap your local tourism board and also check out the major booking sites (like HomeAway, Trivago and Airbnb) to help you get the answers to these questions.

• Deciding who to target was not super easy, as we felt that everyone would like to stay at our place. Sound familiar? But we knew we couldn’t be all things to all people and still offer the experience we felt was necessary. So, after researching the market in our area, we chose to focus on international travelers attending the nearby convention center and also couples.

• We chose to compete by offering as many features as we could afford. For example, we provide high quality linens, plush towels, coffee, teas, spices, bathroom & laundry supplies, professional grade clothes steamer and free phone calls. Please note that things like high speed internet are assumed by the customer.

• We are not the lowest priced by any means. But, we do need to be competitive; otherwise, we don’t get a reservation. Every day the place is not rented is a lost opportunity forever. How are you going to differentiate your rental property from the competition?

• There are so many ways to market your property, including social media and local organizations whose job it is to generate tourism in your area. We chose to go with HomeAway mainly because we are targeting international business travelers and couples who are vacationing together.

• Take great pictures. You will be competing with so many others, you have to show off what you’ve got on the home page of your listing.

• Take your cleaning seriously! We have a checklist so we don’t forget anything, including mopping under the beds. You’d be surprised by some of the things we’ve found!

• We have many days where a guest is checking out in the morning and another guest is arriving in the afternoon. We do a lot of the cleaning and set up ourselves, but we also need help. We decided to pay a higher rate for the assistance than is typical for our area. It’s been worth it. We’re less frantic when the new guests arrive and the unit sparkles, like we promised the guest.

• Prepare a notebook on how things operate in your unit, plus local hospitals/clinics/pharmacies that tourists may not be familiar with. While we go through most of the important things with our guests, we can’t cover it all. They’re interested in starting their vacation, not in talking to us. We DO NOT include recommendations on restaurants any longer. We’ve found that there can be quite a bit of turnover of cooking and wait staffs and so the experience can vary. So, instead, we recommend they look at the most up-to-the minute reviews on Trip Advisor.

• Provide a guest book. We find folks like to share their experiences and we know that previous guests are always checking what others have said too. We also gain insights on what might be missing from what we offer. One guest last year wrote that it would be nice to have a cooler to take to the beach. Great idea. We went out and bought it immediately.

• Secure yourself and your guests by ensuring you have a license (if required in your town), recently inspected fire extinguisher/smoke detectors, non-slip mats and safe wiring. We find that each person has at least 2 devices that need powering up-so be sure you’re set up for this. We also upgraded our home owner’s policy to a commercial one. It gives us that extra protection should someone get injured in any way. Stuff happens!

• Develop a rental agreement, a basic email confirmation, and a receipt. There are many sources for sample agreements on the web. Confirm what is legally acceptable in your area. Ensure the rental agreement is part of the reservation process, which should include your cancellation policy and basic do’s and don’ts (for example, in our case, no pets or smoking allowed.) Remember to get the renter’s signature, otherwise you may not be protected. We provide a copy of what we use in the checklist download.

• On the receipt, we add a reminder to please rate us. We find everyone is looking at these to decide whether to make an inquiry or not on our place.

• Be patient. There are always things that may happen that delay your guests’ arrival. So keep your schedule flexible on the day of arrival and keep in communication as much as possible. Most of our guests text us when they are getting close to arriving; this makes it easy for us to be ready with a smile.

• Probably the thing most commented on when guests walk into our place is the handwritten Welcome Sign and bottle of local wine! We do not promote this, so it comes as a special little surprise. We customize it with each person’s name in the party. Nothing fancy: we use an erasable small white board. A chalk board works well too!

Certainly horror stories are written every day about renting a private place. There are risks for both the renter and to you. We like to think about this business as less about making money (although yes we do) but about having guests enjoy their stay with us. It helps us stay grounded on what we need to do… which is to provide a great experience for them.

You can download a free copy of the Booking Confirmation & Rental Agreement we use and 15 renting tips in a PDF here. Disclaimer: this guide is for informational purposes only and does not provide legal advice.

All the best if you decide to go into starting a home rental business, or if you’re already doing it, have a great season! Please feel free to share your tips!