6 Steps for Successfully Investing in Vacation Rentals

by | BiggerPockets.com

There’s just something about summer. No matter where you are or what you do, summer brings out an excitement that’s just a step or two below the thrill of the holiday season. Memories of summer vacation, swimming pools, ice cream trucks and care-free days always stick with us, even into adulthood.  No matter how old I get, I still love packing the car and heading to the beach.

Two years ago, I headed out on a two day trek from Memphis to Cape Cod to spend some time on a beach I had never visited.  That had to be the most grueling two days I have spent in a long time, but was so worth it as we pulled up to a summer cottage right on the water.  Yes, even with 5 kids in tow and regardless of the distance, I am always smiling at the end of that drive to the beach.

Summer also brings out unique opportunities for real estate investors. While many of us involve ourselves in single-family rentals or apartments, there are ways to branch out that, for whatever reason, we don’t always take advantage of.  I am in the middle of putting together a vacation rental as we speak and my family is now operating two others.

Investing in vacation rentals is certainly a different beast. It’s not at all like a regular investment — stays are shorts, seasons matter, and marketing is absolutely king.  The ‘wow’ factor starts the second someone inquires about your property and lasts through the time they check out.  Your task is to figure out how to wow them from start and keep them in awe so they tell everyone else how great the experience is at your property.

If you’re considering investing in vacation homes, there are a few keys to remember.

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Summer Lovin’: What You Should Know About Vacation Rentals

1. Your marketing matters.

Marketing is always important in matters of real estate, but it’s especially true for vacation properties. Highlight your assets. Craft a stellar description, but make sure it is accurate. Invest in high-quality, professional photography that really highlights the uniqueness of your property.

More important than setting up a good listing, however, is ensuring that it’s effective. Look at the data, track analytics. Are people finding your listing? How much attention are they giving it? Just like any other listing, you’ll need to keep it updated and in line with what people are looking for.

Lastly, don’t shy away from telling people how they are going to be treated by you.  Believe me, there are plenty of places to stay where the owner does not care about the experience of the renter.  Highlight that you are not one of them!

2. Only the best customer service will do.

Customer service for a vacation rental isn’t just about having top-notch property maintenance and responsiveness to your customers. It’s also about answering any inquiries that come your way and responding even when your property is booked. When people receive a response, they’ll be more likely to try again at another point. Let them know what is available (if anything) and encourage them to check back another time.

Wow them when they walk through the door by leaving a unique gift for each booking.  Something local for them to remember you by and possibly even a few personal touches like recommendations for fun things to do close by with kids.  Every little touch you can give counts and only heightens their experience in your property.

3. You’re selling an experience.

For residential rentals, you’re not selling a dream. You’re selling a home. Your tenants don’t need it to be ideal. On vacation? It needs to be ideal.

That means painting a picture in your listings that entices readers and delivers the well-maintained property that people want to spend their vacation living in. It’s not a necessity — it’s for pleasure. Because of that, you have to approach your strategy with an entirely different mindset.

It absolutely matters that your property is spotless when a new renter arrives.  It matters that there is a gift waiting for them to make them happy. It matters that they know you are looking out for their best interest and want them to have a comfortable and fun time at your property.  This is what earns you high marks on the reviews and not only repeat customers, but high praise from those customers to their family and friends (referrals are important)!

4. Be competitive in your market.

Your renters have absolutely looked at other vacation properties in the area. Make sure you know your market and are offering a competitive price. Because of seasonal use and a higher yearly vacancy rate, you may be tempted to up the cost. Don’t. Focus on being competitive and delivering the value to your customers.

Price is very important, but so is occupancy and word of mouth.  When someone feels that they received a high level of service and value for the price they paid, you can bet others are going to hear about it.  Staying booked definitely helps cure the competitive pricing.

5. A professional image lends confidence.

Being professional is always important. As we’ve talked about before, there are a lot of vacation rental scams out there. Avoid suspicion by being responsive, providing formal contracts and using a professional booking system. The more thorough, organized and communicative you are, the more renters will trust you.  The more detailed your listing and the better your pictures are, the more professional your image will appear.

Remember, all of these small details matter.

6. Quality comes first.

On the note of selling an experience, value upkeep. There’s nothing sadder than a run-down vacation home. Ensure that the place is thoroughly cleaned between each renter and be diligent in finding and addressing any maintenance issue. People are far, far less forgiving of a vacation rental than they are of other properties.

What do you think is most important about owning a vacation rental property? Share your opinion in the comments.

About Author

Chris Clothier

In 2005, Chris Clothier (G+) began working with passive real estate investors and has since helped more than 1,100 investors purchase over 3,400 investment properties in Memphis, Dallas and Houston through the Memphis Invest family of companies.


  1. Gloria Almendares

    Thank you for your article Chris!
    I own several vacation rentals on the beach in Hawaii, including a “Bed and Breakfast” in one of the most beautiful beaches in the USA, Kailua. I think the most important factor in assessing the success of your vacation rental is location, location, location and having a professional property management staff ready to handle the repairs and maintenance needs of your V.R. at a moment’s notice. One unsatisfactory remark from a guest can kill all your marketing efforts overnight. If you are an experienced property manager (as I am) this will not suffice. Vacation rentals are completely a different animal, and require expertise and a great management crew. It’s almost impossible to do everything yourself (believe me, I tried). The rewards of owning a V.R. are huge, as long as your V.R. is managed properly and is located in a desirable area. Another huge benefit of owning a V.R. is being able to write off your vacations! If interested in owning a profitable V.R. in Hawaii, please contact me at: [email protected]
    I hope it’s OK to put my email address here. Otherwise contact my company in Oahu: Realty By The Sea
    I have over 25 years experience as an investor and 13 yrs. experience investing in Hawaii.
    Real Estate investing is my “Passion”, I don’t consider it work, because it is very fulfilling helping others fulfill their lifelong dreams.
    Gloria Almendares – Principal Broker, V.R. Specialist, Beachfront Specialist, Relocation Specialist, SRES Specialist

    • Chris Clothier

      Hey Katie –

      Thanks for reading the article and for leaving a great tip in the comments. Keeping the rate the same year round is a great way to attract customers through transparency. They will feel a sense of loyalty because the see you as a straight-forward operator.

      Again, thanks for the comments.


      • Katie Rogers

        The philosophy I use to maximize profit is the time tested Golden Rule. But for people who feel they need a more capitalistic frame, the key is the spread. Everyone can think of examples in finance where the money is made on the spread. So we maximize value value to the guest, and we charge significantly less than our nearest competitor. People think they will lose money by creating this sort of spread, but the fact is they make it all up and more in volume, so we stay fully booked year round with happy repeat guests, instead of grudging customers. Actually the “spread” we create is an application of the Golden Rule, treating the guests as we would like to be treated.

  2. Alan Mackenthun

    Thanks Chris. We looked at a few places on the Gulf a few years ago and should have jumped. I like my rentals to be close so I can do as much as I can myself, but that’s not necessary for a vacation rental. You almost have to have someone else manage as if there’s a problem it has to be addressed immediately, not in a couple days when their vacation is half over. Our biggest pause was deciding where to buy. We’ll be ready when the next downturn comes along.

    • Chris Clothier

      Hey Alan,

      Great points and I appreciate you leaving them. Like you, I am always on the look out and since real estate is local, I have been picking up opportunities all along in a markets that have a lot of opportunity. Should there be another downturn – we’ll be ready!

      Thanks for the read and the comments.


  3. Michael Perry

    The fact that you decided to purchase and apartment building and went out and did it is an accomplishment. however, i am not sure if this method is ideal for the typical investor who has to be a little more creative in accomplishing such a feat. Most investors i have encountered would not use their own money or credit to qualify for this purchase. and of course having a budget in place to ensure that you are not over spending within that budget plays a very important part. I would like to thank you for allowing me to read of your experience and i think i have just discover a method that i could do myself. Thanks again, and good luck.

  4. I have a Vacation Rental on Lake Hartwell in SC. It is close to Clemson University so Football games in the fall are a big attractor for the Non Peak season. Summer stays full and Fall Winter Spring has decent books. It has started property has started paying for itself.

    I would love to buy a East Coast Beach house one day if the opportunity presented it self and I could get financing.

    I have 14 other rental houses (all paid for) that have been doing well. These now exceed my salary as an Electrical Engineer. I forward to being able to retire from the Rat Race soon.

    So if I could have several Vacation Rentals I could travel between them some when they need some “Maintenance”

    Taking care of your renters is key. Calling to check on them them after they arrive and meeting them when possible has given us a strong 5 star rating which in turn increases bookings.

    I LOVE having a vacation rental and hope to be able to purchase another in the future!

    Not sure if I could make a jump to having one in Hawaii but it is thought provoking.


    • Gloria Almendares

      Hello John:

      Thank you or your comment to my post. I am new to BP, and was very excited to receive comments like yours from other members. Maybe we can do an “exchange”? You can stay at our beachfront apt. at “Turtle Cove”, swim with the dolphins and sea turtles, in exchange for staying at your Lakefront rental. My spouse loves fishing, and we both enjoy water skiing.
      You will be surprised to find out how affordable Hawaii can be, if you have an experienced agent that can show you the hidden jewels that are very affordable. Hawaii has the reputation of being “very expensive”, but this is only the perspective from a “tourist”. Housing is a lot more affordable than CA , when comparing “apples to apples”.

      If you happen to be going to Hawaii, feel free to contact me.

      Gloria Almendares
      (808) 292-6019

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