10 ways to make money on a vacation rental property

As the leading professional vacation rental management company in the U.S., we know firsthand the kind of income you can earn when your second home is truly working for you.

We host over a million guests every year in 10,000 vacation homes around the world. We’re sharing insights from our revenue and analytics team designed to help stimulate the revenue of your property—whether you’ve rented out your second home for decades, or you’re preparing to join the fast-growing industry of vacation rentals.

A bed made by a professional housekeeper in a vacation home

Getting started

1. Buy the right vacation home

If you haven’t purchased your home yet, review our resources on buying a vacation home and get in touch with one of our real estate partners to find the perfect vacation rental property.

Long story short, we’ve seen new vacation rental homeowners succeed most when they consider:

  • Location. Homes with immediate access to a nearby attraction (the ski slopes, the beach, the water, the theme park, the city center) are the most obvious choice for an investment property.
  • Seasonal appeal. You’ll see better financial results if you choose a location that is accessible and desirable year-round. This could be because of weather (like Hawaii or the Gulf Coast) or because of seasonal activities (for example, Lake Tahoe or Telluride, both excellent markets for winter and summer vacations).
  • Size. The more bedrooms and bathrooms, the more you can typically charge per night.
  • Regulations. Check on local city, county, and HOA (homeowner association) ordinances about vacation rentals, or ask your local Vacasa representative for insight. Some regulations can make it more difficult to rent your second home short-term by limiting the number of guests, imposing strict parking restrictions, or simply outlawing rental activity altogether. (We believe in being good neighbors and citizens, so you’ll only find Vacasa homes where it’s legal for us to operate.)

2. Decorate and furnish

Creating a beautiful space for guests is one of the easiest ways to make money on your vacation rental. Not only does this make for a better guest experience, but it’s also key for good marketing—if your guests are posting images of themselves in your home on Instagram, then you’re doing it right.

There are a few simple ways to upgrade your home’s appeal:

  • Fluff up the bed. We always opt for hotel-quality linens and recommend a minimum of four pillows per bed. Guests sleep better and your bedrooms photograph better!
  • Spruce up the kitchen. A big draw of vacation homes is the private kitchen, so make sure yours is stocked with measuring cups, mixing bowls, baking sheets and pans, and some nice table linens. If you’re feeling extra ambitious, consider painting the cabinets a fresh color or removing the doors to create open shelving.
  • Dress the windows. You’d be surprised how much curtains can add to a space. Choose something light and airy for rooms that get a lot of sun, and heavier drapes for bedrooms.
  • Hire the professionals. We recently launched our Home Interior Services program for our homeowners, offering design consultation tailored for short-term rentals. Our design associates are experts in both interior design and the vacation rental industry, and provide recommendations for improvements to create the ultimate escape that will stand the test of time and increase your earning potential.

3. Optimize your listing

Draw potential guests into your Instagram-worthy getaway with the help of your home’s online profile.

  • Invest in professional photography. Your photos will make or break your home’s listing. We take professional HDR photographs for every home, complete with careful staging: open the curtains, close the toilet lids, hide the trash cans, and fluff the pillows.
  • Give your guest a tour. Virtual walkthroughs of a home can help a guest visualize their vacation, encouraging them to book. We invest in virtual 3D tours for every home because our data shows that homes with them see a 14% increase in occupancy rates.
  • Write a short, accurate description. A description helps round out a guest’s expectations and can help highlight attributes that are hard to capture in a photograph. Keep the description short and sweet—scannable descriptions that supplement the photographs are more appealing than long-winded sagas.

4. Update your amenities

Guests search for a few specific amenities more than any other, so you’ll boost your home’s visibility by offering these top three perks:

  • Welcome dogs. Our data shows that in 2016, Vacasa homeowners who allowed dogs earned an average of $6,000 more than those who didn’t.
  • Add a hot tub. This is especially true for homes with incredible views or in colder climates. Our data shows that adding a hot tub can add lead to a 15–25% increase in revenue—and we make it easy with our hot tub installation program.
  • Provide WiFi. Internet access is a basic expectation of guests today, and you’ll miss out on bookings if you don’t provide it. (If your home is too secluded to offer WiFi, be upfront and make it clear in the description that it’s a lovely place to unplug.)
A indoor hot tub and sauna in a vacation rental in the woods

Maximize your vacation rental’s income potential

5. Determine your rates

You simply can’t rely on the old model of “set it and forget it”—with simple fixed nightly rates for weeknights or weekends, in high season or low season. As technology becomes more sophisticated, rates have become more dynamic and are now one of the most challenging parts of vacation rental management. In the current landscape, it pays to have a team behind you.

For example, Vacasa homeowners benefit from:

  • Machine learning. Our proprietary algorithm delivers optimized pricing in moments, based on hundreds of factors like demand, local events, weather, and historic trends.
  • Dynamic updates. Prices adjust multiple times per day based on the above factors, so our homes book for the best nightly rate—neither overpriced during peak booking windows nor underpriced too early.
  • Constant innovation. We have a team of data scientists working to continually refine and hone our pricing tools, and analysts monitoring performance and making real-time adjustments as needed.

If you want to optimize your rates on your own, you’ll need to invest a lot of time in monitoring and updating your pricing.

6. Manage your calendar

Your calendar can have a huge impact on your home’s profitability. Our revenue team recommends these tips for managing your calendar:

  • Avoid minimum stays. Applying aggressive minimum stay requirements may seem like a path to a premium booking, but likely causes potential guests to skip your home in favor of something easier. For example, forcing a guest to book a five- or seven-night stay during the Fourth of July (when the demand for the holiday is only three nights) could cause guests to turn away from your property. What could have been three nights of revenue is now worth zero.
  • Avoid minimum nightly rates. Similarly, minimum nightly rates can create an illusion of more revenue, but can lead to fewer bookings as the seasonality changes. A $400 minimum rate may satisfy the demand during peak season, but is likely too high to generate bookings in the off season when demand is much lower. Pricing your vacation home correctly during shoulder seasons is one of the quickest paths to higher overall performance.

7. Market your home

If you’re marketing your vacation home on your own, choosing the right listing site (or sites) for your property is key.

Own a home in a driveable destination with lots of vacation rentals? Choose HomeAway and/or VRBO (both are now owned by Expedia). Have an apartment in a city? Airbnb is likely your best bet. Is your rental unique, like a treehouse or a houseboat? Consider a specialty site like Glamping Hub. (Every Vacasa home is listed on multiple channels, depending on its location and appeal.)

As with rates, working with the pros can increase your revenue stream by getting your home in front of as many potential guests as possible. Our digital marketing team accomplishes this by:

  • SEO (search engine optimization). Using the right keywords and the right signals to ensure your home is well represented on search engines.
  • PPC (pay-per-click) ads. These sponsored ads appear at the top of search results, targeted to appear when your guests search for precise keywords.
  • Display ads. You know those banner ads that follow you around the internet? We do those, too.
  • Facebook ads. When we know a guest is looking for homes in your area, we put a beautiful picture of your property right in their newsfeed.
  • Organic social. Our most stunning or unique homes are featured on our own social media profiles, reaching hundreds of thousands of interested travelers.
A couple sitting on a couch petting their puppy

Welcoming guests

8. Love the good reviews

You use reviews to determine how you spend our money on Amazon, where you choose to eat on Yelp, and where you apply for jobs on Glassdoor. In the vacation rental industry, good reviews mean:

  • More bookings. Guests care immensely about reviews, and are more likely to book a property with multiple positive reviews.
  • Better visibility. Listing sites usually rank homes with positive reviews higher in their search results than those with negative or few reviews.
  • Repeat guests. Guests who wrote you a good review to begin with are likely to return, and to share their positive experiences with others.

9. Learn from bad reviews

Negative reviews can often be a blessing in disguise. Negative reviews are an opportunity to:

  • Make improvements. Some of our most successful homeowners are those that take feedback to heart and make small improvements regularly. (And our local property managers are always happy to help arrange contractors or deliveries.)
  • Build trust. If you take the time to correct the issue, you demonstrate care and consideration for your guests and their experience. You may even win them back.

10. Hire a vacation rental management company

We may be biased, but making money on your vacation rental property is so much easier when you have a comprehensive management company by your side. A good manager will take care of all the details so you can spend more time enjoying the extra income you make.

That’s where Vacasa comes in. We’re the one-stop shop for vacation rentals, bringing you all the tools you need to maximize your vacation rental’s income potential. And it shows: homeowners who switch to Vacasa from another management company earn an average of 21% more in their first year with us.

Our end-to-end vacation rental management services include:

  • Dedicated local property managers, housekeepers, and maintenance techs caring for your home
  • 24/7 guest support
  • Dynamic pricing platform
  • Professional marketing
  • 3D virtual walkthrough tour and professional photography
  • Listing on top booking sites including HomeAway, VRBO, Airbnb, and Booking.com
  • Filing lodging taxes and assistance with permitting and licensing

Earning more money on your vacation rental property doesn’t have to be a second job. In fact, with the right tools and the right management company, it can be quite rewarding.