| The vacation rental market is growing. More | | | | advertising on search engines or have a friend or |
| people are traveling nationally and internationally | | | | family member who does that can negotiate with |
| with each passing year. Hotels have this | | | | your online marketing company. |
| monotonous sort-of uninteresting feeling about | | | | 3. Rental Restrictions: Be smart about this and |
| them. Vacation rentals on the other hand have a | | | | avoid headaches. |
| personal touch to them and offer visitors more | | | | You can stipulate certain requirements that |
| freedom than a hotel does. And, they are often | | | | renters must meet to rent your property. |
| cheaper. This could be a great business to get in. | | | | However, be careful not to make these |
| A recent report suggested that renting out | | | | discriminatory restrictions based on race or other |
| vacation homes can be almost 90% more | | | | such factors. That can get you into a lawsuit |
| profitable than a regular home rental. However, it's | | | | faster than anything else and you are almost |
| always about risk-reward, right? There are things | | | | assured of a loss. You can however set age |
| you need to know to run your vacation home | | | | limits, animal/pet, or smoking restrictions, |
| business right to avoid getting burned. The | | | | depending on the jurisdiction that your rental is at. |
| responses to the six questions listed below will | | | | However, to avoid running a foul of the law, |
| provide some answers for those new to vacation | | | | check regulations governing certain types of |
| home renting. | | | | rentals. You can also change these restrictions |
| 1. Rule Number 1 - Get the right insurance | | | | periodically. Research the norm in your area. Often |
| Homeowner's insurance for your vacation rental | | | | times, copying what other renters do in the area |
| property is essential. There is no questioning that. | | | | can be a good start. |
| But just like vehicle insurance or renter's | | | | 4. Security deposit: Handle them carefully. |
| insurance, there really are quite a few options out | | | | For vacation rentals, it is often a good idea to get |
| there. Choosing the right one can save you a lot | | | | a portion of the pay upfront as a deposit. |
| of headache in the long run. And money too. The | | | | Non-refundable or non-refundable is a question |
| balance between premium and benefit in insurance | | | | that you are going to have to answer. I personally |
| is always a hard one to find. Determining your | | | | like to keep smaller non-refundable deposits that I |
| insurance needs is best done by consulting a | | | | can deduct from the total pay. Often people pay |
| number of insurance agencies, but make sure to | | | | checks that bounce. With a visitor every week |
| prepare a checklist of questions beforehand. | | | | you don't really have the time to go after people |
| Insuring a vacation home is much more involved | | | | if there are problems. To avoid making a loss, |
| than a regular home. You have a new vacationer | | | | always cask the security deposit check. That's a |
| every week. You must be prepared to handle | | | | good way to know whether your renter is likely |
| lawsuits from irate vacationers. You really can't | | | | to pay the full amount. |
| make everyone happy however hard you try. | | | | 5. Be clear and upfront about refundable security |
| Strong liability coverage will help you sleep well. | | | | deposits |
| Don't just sign the insurance paper as if it's a | | | | Many people also keep a refundable security |
| necessary evil. Understand what you are getting | | | | deposit. If you do, remember that are only |
| into. If disaster strikes, you should know what | | | | allowed to keep back the cost of the damaged |
| you can get away with and what you can't. | | | | item plus any fees associated with replacing the |
| 2. Marketing: Do this right. You don't really have a | | | | item. You can't just withhold the whole security |
| choice. | | | | deposit if damages don't equal the deposit. Be |
| Any business, but especially a vacation home | | | | clear and upfront about this and keep all bills and |
| rental must advertise to be successful and remain | | | | receipts to prove why a specific amount was |
| competitive. Online advertising has proven to be a | | | | withheld. |
| key way of reaching prospective renters. In other | | | | 6. Keep it clean |
| businesses, people still use yellow books and word | | | | If done right, you can actually make a profit from |
| of mouth heavily. In vacation homes, most people | | | | this. Offer multiple options to your renters. No |
| are not from the same area so they don't usually | | | | cleaning, full cleaning, partial cleaning. Also let them |
| have the yellow pages and also may not know | | | | pick the frequency. Then based on that, charge |
| anyone from that area to get a recommendation. | | | | them a markup over what you pay to your |
| So where do they go? Google, Yahoo, MSN or | | | | cleaners. There you go, now you have a cleaning |
| AOL. That's who they search to find a nice | | | | service that you offer for your vacation rental |
| vacation rental. That can be a good or a bad | | | | and make money from it. |
| thing. To turn that into a favorable thing, market | | | | For many of the questions you'll have, it is a good |
| online. Consult with a good search engine | | | | idea to talk to a lawyer who will assist you in |
| marketing company. Get a website for your | | | | drawing up a standard contract and provide |
| vacation rental if possible. Get your home listed on | | | | guidance on local issues surrounding rental of |
| multiple sites. Use other techniques like radio/print | | | | vacation properties. Don't hesitate in doing this. |
| TV ads as well, but to a lesser extent perhaps. If | | | | Just go in prepared for your meetings with |
| done right, internet advertising can get you ten | | | | lawyers and do as much work as possible |
| times better results than other techniques for a | | | | yourself to keep the lawyer bills under control. |
| fraction of the price. You really need a good online | | | | These questions just touch the tip of the iceberg |
| marketing company though. There are too many | | | | when it comes to starting a vacation rental |
| out there that don't know what they are doing. It | | | | company, but hopefully these will get you started! |
| will help if you know some basics about | | | | |