We have all dreamed of earning an income where we really do not have to anything to work for it. Many of us are bombarded with email spam and advertisements that say you can become a millionaire overnight or earn money without having to work for it using a secret formula. The people sending these offers are mostly already successful and have a formula that is possible to use but unpractical for most people.
However, when it comes to vacation rentals, there is no secret formula. You really can earn money without having to work yourself into the ground. You may or not have heard of the book ‘The Four Hour Work Week’. With the right set up, you could arguably work less than 4 hours per week.
Holiday home rentals means you will be able to make money in the same way as any landlord makes money on the property market, and that is by renting. The difference between renting on a yearly basis versus shot term holiday rentals is the latter means you can charge much higher rates because you are paid on a daily basis.
That said, there are a few perquisites that you have to fulfil before you can create a passive income by renting your home to holidaymakers.
Firstly, you need a lot of capital. That means getting a bank loan or remortgaging your home. Alternatively, you might already be lucky enough to have the money in the bank or even own your own holiday home in an area that is popularly visited by tourists.
Secondly, you will need to put in the initial hard work to get the business setup. The end goal is to have your holiday home running almost on autopilot without much intervention from you.
Thirdly, you will need a website to take bookings.
Running the Business on Autopilot
When you run a business on autopilot, this means you are earning a passive income. The very definition of a passive income is one that states that you make an income with very little to no effort at all. That should be your ultimate goal when creating your vacation rental business.
How do you achieve this goal? Well you need good organization skills!
- Hire someone to answer inquires for you on your website. You can hire one or two individuals to answer inquiries and guest questions. Make sure that when a message is sent, they receive it on their phone as a notification or via email. Pay them per hour and give them a small commission for closing bookings for you. This way you never have to deal with guests. However, you will need to train these individuals.
- Have a local cleaner or two available or use a local cleaning company. The cleaners will need to be informed of check out dates so they can go to your holiday home and clean it after the guests have checked out. The people hired in number 1 could be used to inform cleaners. On top of this, ask cleaners to take care of any maintenance issues if possible – this would obviously come with a bonus payment.
- Make sure you have a bank account local to your holiday home so you can set up direct debits to pay bills. In some countries, they still require that someone pays in person, so if this is the case, then this is another task for the cleaner.
- Use an automatic check in system for your holiday home. Smart home tech is the best because you can use this to configure new codes for new guests, and your guests can easily self-check in to your home. Check out this Lodgify blog about smart locks.
- Last but not least is making sure you have your own website. In part 4 we mentioned Lodgify and their review about smart locks. You can also check out their awesome website builder for vacation rentals as well as the many tools this tech company has to manage a vacation rental website such as on WordPress or WIX.
- You should also look into signing up for multiple vacation rental website like Airbnb, HomeAway, FlipKey, and so on, then using the Lodgify channel manager to sync calendars with these sites. These websites already have huge numbers of visitors looking to rent a holiday home, and they are likely where you will get most of your business.
In the end, this is a short version of exactly how you would set-up your holiday home business to run without much intervention from you at all. You could realistically only have to work 4 hours a week on this business, which would be just making sure your workers are doing their job correctly, answering questions they may have, getting involved when they escalate bookings or guest queries. However, in the long run, you will pretty much have a business that runs itself.