How To Manage a Vacation Rental Business
The most recent reports show that well over 10 million households in the United States own a recreational vehicle, with 17.2 million households looking to buy one through 2024.
Do you own an RV? Have you ever thought about renting it out to make some extra money? With RVnGO, you can list your RV on our platform and start earning money from vacationers looking for a unique travel experience.
Our guide will show you how to manage your vacation rental business so you can make the most of your RV. You’ll learn how to finance your vacation rental, market it to potential guests, and provide a great experience that will keep them coming back for more.
Scroll down to learn how to get started with RVnGO!
How to Finance a Vacation Rental Business
First thing first. How do you finance a vacation rental business? If you already own an RV, you’ve taken care of the biggest investment.
However, you still need to budget for things like furnishings, repairs, and any add-ons you want to include to ensure your rental stands out from the rest (like adding a ramp for wheelchair accessibility or renting out for specific events like festivals, sporting events or races, with special amenities, and discounts).
What are your options here? There’s many creative and traditional ways to finance your vacation rental business. Your success as a short term rental-preneur is dependent on understanding which option makes the most sense for your goals, finances, and the current economic climate and amount of credit available in the market. To start renting out your RV, the primary source of financing typically comes from personal assets such as savings or investments. You might also consider taking out a loan to cover the costs of getting your vacation rental business off the ground.
Be sure to explore all funding options that are both affordable and sustainable for your short-term and long-term business goals. The key is to carefully consider how much money you’ll need to get started and how much income potential exists in running an RV vacation rental business.
Measure this against your potential return on investment (ROI) to find the right financing options. For example, applying for a loan from a bank or other financial institution may require more resources, like a down payment, while peer-to-peer lending platforms (private lenders) may offer more flexible terms.
How To Assess The Lending Climate?
No 2 markets are the same, and trends will also differ across geographic location types. Look up trends for, interest rates, business loans and the trends for the economic climate for where your business will be located to get a pulse on availability of credit. Understand your risk tolerance and don’t over-leverage yourself without a clear plan and ability to pay back the loans.
Know Your Data.
It is vital to know your profit margin, ideally over 15% and assure you are covering your costs. Also, just like a hotel, you need to track your occupancy rates. Occupancy Rate = Total Booked Days / (Total Booked Days + Total Available Days). Occupancy is the percentage of available nights an RV Rental / Vacation Rental / Short Term Rental *STR is booked in a given month, and thus, the higher the occupancy, the more revenue the property will generate. RV rentals can be very seasonal so you need a high occupancy rate in the ON Season, or market your listing effectively to rent year round. The next thing is to know your Capitalization Rate, which is the ratio of Net Operating Income (NOI) to property asset value.
How to Manage RV Rental Business Costs
Assuming your financing is taken care of, how can you effectively manage your vacation rental costs? Here are a few ways to wisely spend your money to ensure your RV rental business is lucrative for you in the long term.
Before we begin, here are a couple more vacation rental business metrics you need to know and understand. Average Daily Rate, which indicates the average revenue that a rented RV, room or property can earn in a day. It does not take taxes into consideration. You find it by dividing the total revenue by the number of booked nights. RevPAR is the revenue per available room or RV unit. This will give a great overview for your business performance. There are 2 ways to calculate this metric. The first is by multiplying the average daily room rate by the occupancy rate and the second is to divide the total room revenue by the number of rooms available in a given time.
Measure the ROI of Amenities
Measuring the return on investment of amenities in your RV vacation rental is essential for two primary reasons.
First, investing in amenities and features that people care about can be a great way to increase bookings, which will result in more income.
Secondly, measuring the ROI of an amenity gives you valuable data that you can use to decide which amenities should stay and which ones should go. This ensures you’re investing in the right features that will be most appreciated and rewarding in the long run.
Knowing what is or isn’t working also keeps you from wasting money on unnecessary items.
Perform Routine Maintenance
Sure, performing routine maintenance on your RV might not seem like fun. However, it can help you save money when renting it out in the long run.
Simple things like checking tire pressure, regularly replacing the oil and filter, and cleaning the engine compartment are essential to ensuring your RV runs properly. By taking care of routine maintenance now, you’re helping to prevent costly repair bills later on.
In addition, keeping routine maintenance up-to-date helps maintain the quality of your RV so renters will find it attractive to rent. After all, nobody wants to stay in an RV rental that’s on its last breath.
Use Vacation Rental Booking Software
Vacation rental software is a great way to reduce costs associated with an RV rental business. It can help streamline processes and provide automated solutions for a variety of tasks ranging from renting out your RV to collecting payments.
This type of software also enables RV rental businesses like yours to provide more competitive rates, making it easier to track availability, pricing, and bookings.
Plus, vacation rental software typically offers a range of features that can help better manage customer relationships. Want to increase the quality of service you offer with tools such as automated communication and personalized emails? Try a platform like RVnGO (it’s free!).
How to Make Your Vacation Rental Stand Out
All ready to rent your RV? Managing a vacation rental business is about more than listing your rental and watching guests fill up your calendar. If only it were as easy as “if you list it, they will come.”
Nope. Instead, you need to ensure you’re doing your best to make your vacation rental stand out in the sea of competition. While we’ve got a full guide on what to include to attract more renters, here are three great tips to start.
Stock the Right Items
Stock your RV rental with all the necessities for a perfect getaway. From fresh linens for a comfy night’s sleep to dishes and utensils for cooking on the go, stock items that will make your guests feel right at home.
Not sure what to include? Think of unique amenities they might desire — would they appreciate an outdoor hammock or a set of cozy throws? Catering to their needs creates a memorable experience and acts as an incentive to keep them coming back.
Offer Flexible Options
Flexible booking options can make all the difference when running a successful RV rental business.
By offering flexible payment schedules, easy cancellations and refunds, and personalized packages that cater to customers’ needs and travel plans, your business will surely attract more guests than ever.
Take Great Photos
If you operate a rental business for RVs, take quality photos to use in your online listings. Professional photos help potential customers envision what it would be like to take a camping trip in one of your RVs.
Remember, many customers make their decision based solely on the visuals they see online — so take pictures they won’t be able to resist!
All in all, great photos act as an advertisement of sorts and showcase how much care and attention you put into maintaining your RV for your guest’s comfort and enjoyment. So, take the time to take professional RV photos and make sure your business stands out from the competition.
How to Scale Your Vacation Rental Business
Now that you’re rockin’ and rollin’ (and rentin’), it’s time to think about growing your vacation rental business. Treating your RV rental business like a, well, real business is the best way to scale your operations. How do you do that? Follow these two tips.
Look at Top RV Rental Locations
When looking to rent out an RV, selecting top RV rental locations is perhaps the most important step you can take. Not only is it important to find a market that’s interested in what you’re offering, but it’s also essential to ensure your rentals are desirable and attractive.
Market research and listing top-tier rental locations can make all the difference when it comes to which renters are more likely to pick up your RV. It’s an absolute must if you want your rental business to differentiate itself from the crowd and rise above it.
Monitor Vacation Rental Trends
Staying on top of vacation rental trends is essential if you want to stay successful in the ever-changing short term rental /RV rental market. After all, no one wants to be stuck with an outdated vehicle when the future lies in more environmentally conscious modes of transportation.
Staying in the know about industry standards and accommodations offered by competitors is key to your success. If you understand what travelers are looking for, you can offer something unique that no one else is!
Additionally, watching trends will help keep your rates competitive with others in the area and your amenities attractive for travelers.
How to Buy an RV to Rent Out
Don’t have an RV yet? You probably have a few questions. Namely, where can you buy an RV, and how much should you expect to pay?
You’ll want to consider the size and floor plan layout of the rental. Will it suit potential renters’ needs or require upgrading? Is it ready for family vacations, couples’ getaways, or small groups of friends?
You’ll also want to take note of the amenities, such as a fully functioning kitchen, bathroom, comfortable sleeping spaces, and entertainment rooms.
Of course, you also need to think about all the fun extras like slide-outs, outdoor grills, and window shades that draw all eyes when driving down the highway! Ultimately, with all these considerations in mind, you’ll be sure to buy an RV that produces smiles wherever you go.
Ready to find your perfect RV for a vacation rental business? Click here to view RVs for sale on the platform or search your local RV shows for deals on new units.
PS, List Your RV Now
Now that you know all about how to manage a vacation rental business, it’s time to list your RV. RVnGO is the world’s first free online person-to-person RV rental platform, so why not list your RV with us and get started today?
With no fees when you list, it’s a breeze to jump into the exciting world of renting RVs. You can easily list your RV and be on the way to making extra income without any hassle. So, what are you waiting for? List your RV with us now.