How to buy a Vrbo or Airbnb property

Beachfront condos, mountain cabins, lake houses. In the market to buy a vacation home? These—and many more—are all types of vacation rentals currently listed on Vrbo and Airbnb and for sale.

There’s already a strong case for investing in a vacation home over traditional real estate. It’s even stronger still for choosing a property that’s already racking up bookings on Vrbo and Airbnb.

We spoke with Jamie McClellan, a Vacasa senior sales executive and licensed broker in the Outer Banks of North Carolina. He outlined how to identify a successful investment property already listed on Airbnb and Vrbo.

The top pro and con for buying a currently listed Airbnb or Vrbo property

PRO: Rental income that’s ready to go
“Depending on the home and market type, buying an existing vacation home can jumpstart the process for new owners,” Jamie said. The right home at the right time can come with a season's worth of reservations already booked and paid, so the buyer can start to recoup their initial investment more quickly.”

CON: More wear and tear

An already existing vacation rental may need maintenance sooner than later, due to more wear and tear, Jamie explains. Meanwhile, a newer vacation home could require less work to get the home guest-ready.

Start with a location

The search for maximum rental income starts with the right location.

Refine your search

Here are some ways to narrow in on the right locale:

• Vacasa’s Best Places to Buy report ranks the top markets by average ROI and cap rate.
• Consider the areas you’re already familiar with, such as your favorite family vacation spot.
• Think about the type of environment where you’d like to own a vacation home—near the coast, on a lakefront, in the mountains, or close to other popular travel destinations.

Understand high and low seasons

The ebb and flow of vacation rental bookings depends on the season. For instance, a beach house in Gulf Shores, Alabama will likely be booked all summer long. While a mountain cabin in Whitefish, Montana will be teeming with guests in the winter. So, know what to expect.

Also, important: Understand that some markets can attract bookings even during low season. Think storm watchers who flock to the Oregon coast in the winter.

Get to know the local short-term rental restrictions

Is a vacation rental legal? Even if a home is listed on Vrbo and Airbnb, don’t assume the homeowners are following all the rules. Local law—whether that’s at the city, county, or state level, or all three—can have strict rules around owning and operating a vacation rental.

Plus, don’t forget to look into the homeowners’ association rules for renting out the property.

Here are questions to think about:

• What are the rules for guests?
• What amenities are they allowed to use?
• Are pets allowed?
• Where can guests park?

Connect with a local expert

Work with a real estate agent who specializes in vacation rentals and is knowledgeable on the local visitor market, high and low seasons, competition in the area, and more.

Even better? Ask your real estate agent to reach out to a Vacasa sales executive in the market, like Jamie who specializes in the Outer Banks. They can help guide your search for an existing Vrbo or Airbnb property.

“I prepare rental revenue projections and evaluate homes every day for Realtors® and their buyers, so they’re armed with all the right information before submitting an offer,” Jamie explains.

Dig into the home’s vacation rental history

“Look for 2-3 years of booking and revenue history, Jamie says. It should be attached to the MLS listing for you to evaluate.”

Read guest reviews

Guest reviews are a gold mine of information and can reveal things that homeowners may not mention. Does the home garner consistent 5-star reviews or are they mostly mediocre? What do guests love? What do they complain the most about? Pay the most attention to the bad reviews. Will it take a major overhaul or small tweaks to improve the guest experience?

Understand the owner’s expenses

Ask the current homeowner for 2-3 years of expenses, Jamie advises. These should include items like:

• Property taxes
• Rental income taxes
• Local lodging tax
• Property insurance
• Vacation rental insurance
• HOA fees
• Utilities, including water, heating, cooling, electricity, gas, and trash
• Management fees
• Local licensing fees

Go over the current vacation rental income

Again, ask for 2-3 years of paperwork here. It’s also important to ask how the homeowner sets rates. Did they do so on their own, based on their best estimates? Or, did they use vacation rental pricing software, which helped them to determine rates based on market conditions, local events, competitions, etc?

Vacasa optimizes rates every day—ensuring our homeowners are making the most with every stay—based on:

• Demand
• Peak seasons
• What competitors are charging
• Local events
• Upcoming weather
• Recent trends

Ask for the home’s maintenance history

It’s also worth getting 2 - 3 years worth of maintenance records. Was the dishwasher recently replaced? When was the hot tub last serviced? Do any of the major appliances need fixing or replacing a few years from now?

Use a vacation rental maintenance checklist and maintenance guide to see what you’ll need to keep track of.

Review the vacation home’s marketing and management process

How did the homeowner market and attract guests?

With so much competition, it takes more than a listing on Vrbo and Airbnb to be successful. What else were the homeowners doing to drive traffic to their listing?

• Did they send out regular emails to past guests?
• Post to social media?
• Have their own website and write a blog touting their destination?

When you work with Vacasa, we do all that and more to market your vacation home—such as making sure your listing has the proper keywords so your property is easily found in online searches.

Review vacation rental property listing

A property’s success as a vacation rental can depend on the listing. Afterall, it’s the listing that will convince a guest to book in the first place. Scrutinize the photography and how it’s written. Are the photos professional or casually shot with a cell phone? Would the headline cause someone to click? Does the listing description inspire someone to book?

Vacasa knows what guests look for and provides every home with:

• Professional photography (plus, staging beforehand)
• Expert-written property descriptions that highlight all of the home’s best qualities
• 3D virtual home tours

Who manages the vacation rental?

Was the homeowner managing the property on their own? Or, did they work with a vacation rental manager? Most importantly, look for hints of bad management in the guest reviews.

Keep in mind there are a few types of rental managers:

• Full-service managers who handle it all for you (like Vacasa)
• Half-service managers (such as Vacasa’s Guestworks)
• Managers that offer a la carte services

Vacasa and other full-service vacation rental managers cover all the bases to keep guests happy and your bottom line healthy. This includes:

• Marketing your home to get exposure
• Managing multiple booking calendars
• Screening guests
• Taking care of guests during their stay
• Stocking essential guest amenities
• Thoroughly cleaning after every stay
• Conducting regular maintenance and coordinating repairs
• Helping with taxes and permits