The short-term rental industry seems to be growing exponentially post-COVID. A survey shows that this industry earned a revenue worth more than $13 billion in America in 2021. In places like St. George, UT, a 75% spike in tourism revenue was observed. Therefore, if you own a quaint property near southern Utah, it’s time to turn it into an outstanding business asset. This article will tell you how to go about that:
1. Research the market
Conducting proper research is necessary to get into the vacation rental business. It means visiting relevant platforms, such as Vrbo and Airbnb. Read online reviews, study booking rates for each season, and look into the amenities other hosts offer their guests to stay in business.
Research the most profitable STR markets in southern Utah. For instance, St. George was regarded as one of the best places for buying a vacation rental. Southern Utah is already famous for its distinct red rock formations that attract travelers from all over the country. The region is also known for its proximity to Las Vegas, Zion National Park, and other vacation spots worth exploring.
Contact the Red Rock Real Estate team to join southern Utah’s vacation rental industry. Work with experienced brokers and realtors to co-own a luxury home in a prime location.
2. Form an LLC for your business
Creating an LLC helps you separate personal liabilities from business ones. So, if you get sued by the guest – or sued for your guest’s actions, such as damaging a neighboring property – the plaintiff can only go after your business assets. Protect your private assets from business-related lawsuits.
3. Analyze the ROI from rentals
Evaluate the money-making potential of your vacation rental property. Determine how much revenue you can generate by investing in a property and measure the income by using these factors:
- Average Daily Rate (ADR): Divide gross income by the number of days the cabin was booked
- Revenue Per Available Room (RevPAR): Divide gross annual revenue by how many days your cabin was available
Vacation rentals also incur some operating expenses as well. For instance, you will pay for the booking fees paid to the listing sites, different utilities, and other necessary supplies. Don’t forget about all the costs of cleaning and maintaining your vacation rentals. That’s how you calculate the expected final ROI.
4. Choose the right apps and tools
Like any other Airbnb host, you need to invest in the right tech tools to properly manage your vacation rental business, especially if you have more than two listings. With these unique apps, you can streamline operations, manage your finances, market your listings, communicate with customers, and maintain your rentals properly. Consider the following tech tools to run a successful Airbnb business:
- Screen your guests by using Autohost
- Use Operto to make self-check-in easier for guests
- Accept every booking request automatically with Instant Book
- AirDNA lets you optimize your listings across multiple channels
- Use QuickBooks to manage your finances and track expenses
5. Set up the appropriate pricing
Utah’s tourism industry has rebounded after the pandemic, and thanks to its five national parks in the state, it has received 11 million visitors in 2023. But that doesn’t mean tourists are okay with overpriced vacation rentals. Charging too much can deter business success in this industry, so you should set up the pricing by considering these factors:
- Set your price based on supply and demand
- Base the pricing on seasonality (lower for off-season)
- Use tools like PriceLabs to set up the price appropriately
- Do some research on how much competitors are charging
- Take into account local events, festivals, and approaching holidays
6. Obtain licenses and permits
Unless you team up with experienced realtors working in the real estate industry, be mindful of the local laws when getting into the vacation rental business. Some municipalities forbid homeowners from using their properties as vacation rentals. Also, some homeowner associations may limit how many guests you can host.
Make sure you have a business license to operate. Get another license to collect occupancy tax from your guests. Get liability insurance and additional coverage for your vacation rental property.
7. List and market your property
All that’s left now is to create a listing on the most popular STR sites out there. Market your vacation rental/s across different platforms, such as Airbnb and Vacasa. It’ll help you cover more ground, get more exposure, and attract more tourists heading to Utah.
Market your property by coming up with an attention-grabbing title. Describe your property in detail with pictures attached. Write a few helpful house rules and offer some extra amenities.
Owning a vacation rental can be a good source of income. But to get started in this business, you must research your market, form an LLC, purchase the right tech tools, and list your property on different websites. Track your income and expenses properly while optimizing the prices as per different factors in the market.