Are you thinking of turning your home into a short term rental but have no idea where to start? Then you’ve come to the right place. Our step-by-step guide will take you through the details of how to make your home a vacation rental, from checking local regulations, all the way to providing great hospitality services to guests. Becoming a host and making money from Airbnb might be easier than you think.
The easiest way is to hand off your property to a truly full-service airbnb management company. A company like Summer can evaluate, design, furnish and operate your vacation rental on your behalf. In fact, if you want to operate, Summer can plug-in and hand the property back to you at any stage.
Here’s a step-by-step guide to turn your home into a vacation rental:
1. Check Local Vacation Rental Laws and Regulations
Before starting prepping your home to be a vacation rental, you have to make sure that running an Airbnb process is legal in your market. Many US states, counties, and cities have imposed various types and degrees of short term rental regulations in an attempt to control the wild spread of the vacation rental industry and to protect local communities.
These rules vary from requiring business registration and licensing to prohibiting renting out non-owner occupied properties altogether.
The key with vacation rental regulations and laws is that they can be very different from one market to another, including neighboring cities. That’s why it’s important to check out the rules that apply to your specific location.
To find local Airbnb laws and regulations, check out:
- Local government websites: The most reliable source of this information are the websites of the state, county, and city/municipal authorities governing your market. They provide detailed definitions of what constitutes a vacation rental, what requirements it needs to meet, and what limitations it needs to comply with. These websites usually provide contact information where additional information can be obtained if needed.
- Local zoning laws: Many tourist destinations limit vacation rentals to certain zones (commercial) while prohibiting them in other zones (residential), so you need to check out the website of the local zoning authorities for a detailed map of where Airbnb is legal and where it is not. This is crucial for confirming that your area allows this type of rental activities.
- The Airbnb Help Center: While Airbnb does not aim to provide legal advice, their Help Center has a summary of the general vacation rental rules in major markets. In addition, they offer links to official sources where you can get more details.
- Vacation rental investing blogs and forums: Many real estate investing websites publish articles guiding readers through the Airbnb laws in various US markets. However, you should be careful with this source as information might be incomplete or outdated. Still, blog posts can be a good starting point of your research and guide you to the right official sources.
- Local vacation rental property managers: You can talk to Airbnb managers in the area and ask about the regulations. They can be particularly helpful if you intend to hire a professional to manage your home once you’ve made it a vacation rental.
- Local hosts: Similarly, you can consult with hosts who are currently operating in the market as they are likely to know the rules or at least where to find them. You shouldn’t rely too heavily on hosts though as they might not have researched the topic well enough or might have chosen to not follow all applicable rules in order to boost profits.
- Summer’s short term rental laws by state: You can check out our summary of the vacation rental rules in all US states for a quick and easy reference.
Regulations can be diverse to meet the specific needs of each market, but there are some common elements that you should look out for.
These common short term rental regulations include:
- Business registration: Many cities require Airbnb hosts to register their rental business, just like any other business. Some states, like Florida, have this requirement at the state level.
- Short term rental permits and licenses: Most markets demand from hosts to obtain specific licenses or permits and to renew them every 6 months, year, or 2 years.
- Zoning regulations: In hot Airbnb markets, vacation rentals are frequently limited to commercial-use zones and prohibited in residential-use neighborhoods to protect local residents.
- Owner occupancy: In some cities, only owner-occupied short term rentals are allowed, while non-owner occupied rentals are strictly prohibited. This means that the homeowner needs to be present on site during all guest stays.
- Restrictions on entire properties: Some locations allow only parts of properties to be rented out on a short term basis.
- Restrictions on occupancy: The majority of local authorities limit the number of adult guests allowed per bedroom and per property to ensure guest safety, especially in case of fire, and to prevent illegal parties.
- Restrictions on days rented: Certain locations limit the number of days per calendar year for which a property can be rented out on a nightly basis. The limit can be between 14 and 120 days, depending on the market. This practice is very common in major cities in California.
- Insurance requirements: Sometimes authorities require vacation rental owners to have a certain level of liability insurance, especially if they rent out via short term rental websites that do not offer this type of coverage.
- Taxes: In the vast majority of jurisdictions, vacation rentals have to pay specific taxes, such as transient occupancy tax (TOT), lodging tax, and/or sales tax. Other taxes such as rental income tax and property tax also apply.
- Safety rules: Many local authorities specify the type and number of safety devices that need to be installed per room and in common areas. This includes things like smoke detectors, fire alarms, carbon monoxide monitors, and fire extinguishers.
- Other regulations: There are a range of other rules that exist. Some examples include limiting the number of short term rentals per block, determining the minimum space between vacation rentals, prohibiting parties, and restricting the noise level.
Breaking vacation rental regulations can be subject to hefty fines as well as legal actions against your business. Thus, you need to make sure that you can meet all requirements before moving forward with setting up your home as a vacation rental.
2. Research the Local Short Term Rental Market
Once you know you can legally operate a vacation rental business from your home, you should analyze the competition to see what results you can expect and what will be required from your property to outperform local listings.
You can visit Airbnb, Vrbo, Booking.com, and other more niche booking platforms to find listings in your market. It’s best to focus on properties that are similar to your home in terms of type, size, and amenities and are located no more than a few miles away. These are known as short term rental comps.
When scoping out the competition, try to figure out both what they are doing right and what they are doing wrong based on the performance of their listing. There’s a lot to learn as a future host from both.
When researching local short term rental markets, pay close attention to:
- Listing title: Look at a few top-ranking vacation homes and analyze the titles they’ve used in their listings. How long are they? Are they more matter-of-fact or more emotional? Are there common keywords?
- Listing description: See what aspects of the home and the area successful hosts emphasize and unsuccessful hosts fail to mention. Are descriptions formatted as paragraphs or as bullet points? What attractions do they list? What words do they use?
- Amenities: Find out the most important Airbnb amenities in the local vacation rental market. How many amenities do listings have? What type of amenities are offered? How do amenities affect pricing and reviews?
- Photos: Look at the listing photos of comps. How many pictures does an average listing have? What rooms and amenities are highlighted? What are common design themes and decors?
- Pricing: Analyze the vacation rental pricing strategy of competitors. What are the prevailing rates for properties similar to your home? When are prices the highest and when the lowest? What are the main property factors affecting pricing (location, size, amenities, etc.)?
- Availability: Figure out how busy your competition is. Are listings booked for the next month? For the next couple of months? Around popular holidays? What distinguishes homes that are more booked from others?
- Reviews: Check out average ratings and the number of reviews of best-performing and worst-performing listings. What are the average ratings of competitors? How many guest reviews do they have? How do these affect availability and pricing?
- Ranking: Work out the main factors that make listings rank high in Airbnb SEO. What are the commonalities between high-ranking homes? What are the similarities between those at the bottom?
Getting a detailed analysis of all these factors will help you put together a plan of how to prepare your home in the most optimal way for a vacation rental (necessary repairs, amenities, and furniture) and how to list it for renting.
3. Take Steps to Prepare Your Short Term Rental Property
When you’ve learnt your lessons from the competition, it’s time to apply them in practice.
The steps that you need to take in converting your home into a vacation rental are:
- Implement necessary renovations: If your home is worn down, you might need to do some maintenance work to fix it up and make it attractive for short term rental guests. Your vacation rental needs to be in a top condition to attract bookings, provide positive guest experiences, and generate 5-star reviews.
- Design and furnish your home: Designing and furnishing a vacation rental is different from designing and furnishing a home. If you don’t have experience in preparing a short term rental, you might consider hiring one of the best Airbnb design and furnishing companies.
- Add amenities: You should decide whether you need to add more amenities than what’s already available in your home based on competition. If there’s an amenity that every single local listing has, probably you need to have it as well. You can also consider installing amenities that are missing in the local market to stand out from the competition. In any case, make sure that the expected additional revenue from adding an amenity exceeds the investment cost and the maintenance price.
- Conduct a property inspection: Depending on your skills, you might need to hire a professional to make sure that everything is working as expected in your home. Check the electrical system, plumbing, roofing, the HVAC system, garage doors, windows, and appliances.
- Deep clean the property: After your home has been renovated and furnished, you need to clean it professionally. Initially, this is needed for impeccable listing photos. Later on, you need to provide hospitality-quality cleaning after every guest. It’s recommended to hire a professional cleaning company.
- Stock guest essentials: When making your home a vacation rental, you need to stock it with amenities like pillows, blankets, sheets, and towels. Try to focus on durable, hypoallergenic materials. In addition, you need to provide your property with toilet paper, paper towels, soap, shampoo, dishwashing detergent, laundry detergent, cleaning supplies, and more guest supplies that are needed for light travel and comfortable stay.
- Remove personal belongings: To get your vacation rental fully ready for listing, you need to clean it from all your personal property like clothes, jewelry, photos, and personalized gifts. First of all, no one wants to be surrounded by someone else’s belongings during their vacation. Second, in this way, you can protect your personal property and avoid it being misplaced or destroyed by guests.
- Stage your vacation rental for professional photography: Finally, you need to fix any last details before having your vacation rental ready for photos for the listing. This means ensuring that everything is clean and in perfect order. Don’t stage your home with furniture and decorations that are not there on a permanent basis because this will make your listing misleading and result in negative guest reviews.
After you’ve gone through all the steps listed above, your home is ready for being listed as a vacation rental and welcoming its first guests.
4. Establish Short Term Rental Management Systems
Next, you should take care of the operations of your vacation rental business. Turning your home into a vacation rental requires you to have the necessary systems and processes in place in order to manage it efficiently and provide exceptional services to guests.
There is plenty of Airbnb management software specifically designed for individual hosts that aims to streamline and automate the numerous day-to-day tasks. STR management software helps owners boost performance through access to vacation rental data. It also helps them save time by organizing and facilitating time-consuming tasks.
The most important tools of vacation rental management software include:
- Dynamic pricing and revenue management: Airbnb pricing tools help hosts set up optimal nightly rates day by day without the need to collect and analyze tons of competitors' data. With the right pricing strategy, you can maximize revenue with the right balance between daily rates and occupancy. One of the best tools for this purpose is Wheelhouse.
- Channel manager: An Airbnb channel manager allows owners to list their vacation rental on multiple platforms without having to do all the work several times. They can manage listings on different websites from a single place. A top choice is Guesty.
- Booking calendar sync: Vacation rental management software provides Airbnb hosts with a unified calendar where all bookings from different platforms are shown. Owners can use the calendar to push daily rates to all listings and to set up blocked dates. This also helps avoid double bookings and other reservation problems. Hostaway has a multi-calendar tool.
- Unified inbox: Online Airbnb management tools bring guest communication from all channels into a single inbox so that hosts never miss a message again without having dozens of browsers simultaneously open. A lot of communication can be automated via customizable templates. Hospitable is one of the tools with this functionality.
- Task management: The best software allows hosts to automate workflows with repetitive and one-time tasks with specific deadlines assigned to team members. This guarantees that your vacation rental is always ready for the next guest. Guesty, Hostaway, and Hospitable all offer this option.
- Website builder: Some software features an easy-to-use vacation rental website builder so that owners can launch their own website for direct bookings. This helps their marketing efforts while saving on Airbnb fees. Lodgify offers a good website builder.
Other tasks that STR management systems can help put on autopilot include review management, team collaboration, payment processing, rental agreement management, smart lock integrations, analytics, and reporting.
Using the right software tools will significantly decrease the time you need to spend on managing your vacation rental home so that you can enjoy your new income.
5. Set House Rules
The next step in renting out your house as a vacation rental is to prepare a copy of the house rules. House rules are listed on Airbnb, but it’s a good idea to have a hard copy of them in the home as well, as a quick reference for guests.
Airbnb house rules inform guests about what they are allowed to do and not allowed to do on site. They aim to protect the real estate property, the host’s personal property, neighbors’ safety, and the area’s general peace.
Make sure to address the following issues in the house rules for your vacation rental:
- Check-in and check-out times: You should state the earliest check-in time and the latest check-out time.
- Extra guests: You need to set up policies for the standard number of guests and the maximum number of guests allowed in the home as well as the fee for each extra guest per night.
- Pets: You should define whether pets are allowed and, if so, what type, what size, and how many.
- Parties and mass events: Parties and mass gatherings are generally not allowed in Airbnb properties. Exceptions to this rule can be vacation rentals that are planned as wedding venues.
- Smoking: The host decides whether to allow smoking in their house as long as that’s not prohibited by local regulations. They have to specify what smoking refers to.
- Level of noise: Guests are generally expected to keep noise within a reasonable level so that they don’t disrupt neighbors.
- Quiet hours: The house rules can set up hours when noise should be kept to the bare minimum.
- Garbage disposal: You have to inform guests about how and where to properly discard different types of garbage.
- Use of washer/dryer: The owner needs to include relevant information about the use of the available washer and dryer, whether private or shared.
- Cleanliness: Hosts can impose rules that aim to keep their property clean, such as not eating in the bedrooms, not keeping spoiled food in the fridge, and not leaving behind dirty dishes.
- Parking: You have to inform guests where they are allowed to park if there is free parking available with the listing. Alternatively, you can direct them to the closest paid parking.
- HOA rules and neighborhood regulations: In case your vacation rental is governed by a homeowners association (HOA) or your neighborhood has specific rules, you have to include relevant regulations in the house rules for guests.
Having clear and detailed house rules will make your life much easier when renting out your home on a short term basis. Most guests will abide by these regulations, and those who don’t will face consequences.
6. Create Your Vacation Rental Listing
It’s time for one of the most exciting steps in the process of making your home a vacation rental: Getting it listed on Airbnb and other booking platforms.
Following are the steps you need to take to list your short term rental:
- Take professional photos: As soon as you’ve staged your home, hire a professional photographer, preferably someone who specializes in real estate photography, to take high-resolution photos of your vacation home. The photos need to show the exterior and the interior of the rental, depict all rooms, and highlight amenities and other outstanding features. Include a number of photos in your listing.
- Create a listing title and a listing description: Come up with a short, catchy title for your listing that emphasizes an experience rather than a property. Write an easily scannable description so that potential guests can get all the crucial information. Include keywords that are relevant to the property type, the experience, and the area.
- Add amenities: Tick all amenities available in your vacation rental, no matter how big or small.
- Include the house rules: Add a copy of your house rules to the listing to avoid unpleasant surprises for guests.
- Set up dynamic pricing: Apply a dynamic vacation rental pricing strategy that is based on seasonality, supply, demand, and local trends. It’s best to subscribe to an Airbnb pricing software to automate the process.
As soon as you’ve filled in all the information above, you can take your vacation rental listing live and start waiting for your first guests.
7. Provide Great Hospitality for Your Guests
To make your home really stand out as a vacation rental and outperform competition, you need to offer outstanding hospitality services to guests.
There are a number of musts in the vacation rental industry for great guest experiences:
- Cleanliness: Having your property perfectly clean for new guests is an absolute must. This includes fresh linen.
- Smooth operations: Check-in, check-out, communication, and use of all appliances should be easy and be clearly explained.
- Experiences: You should consider offering not only a space but also experiences, such as local tours, short language courses, art classes, and access to local cuisine.
- Concierge services: The best vacation rental hosts provide services like airport pick-up and drop-off, local transportation, dryclean and laundry, cleaning services during guest stays, and options for home cooked meals.
- Discounts to local attractions: You can partner with local businesses to get your guests promo codes to restaurants, coffee shops, stores, and other points of interest.
Being an Airbnb host and delivering amazing services to your guests is not easy. There are dozens of tasks that you need to perform on a daily basis in addition to dealing with emergency situations.
If you’d like to make your home a vacation rental but don’t think that you have what it takes to take care of an Airbnb business, you can hire an Airbnb management company. They can offer an all-inclusive solution that boosts performance because of professional-quality services. STR property managers know how to provide great hospitality for guests for 5-star reviews each and every time.
Bottom Line
Making your home a vacation rental is a great way to enter the exciting world of real estate investing and start earning additional income. With our step-by-step guide, you can organize the process and be on the way to becoming an Airbnb host. If you need some extra help, don’t hesitate to reach out. Summer can design and furnish your home as a highly efficient vacation rental and also manage it for the best results.
