short let apartment business plan

Vacation Rental Business Plan: 15 Steps for Success (Free Template)

Investing in a vacation rental business isn’t a decision to take lightly. However, as the short-term rental industry continues to grow, 2024 could be the perfect time to do so.

The success of any short-term rental business will depend on having actionable goals and clear objectives based on thorough market research, whether you’re a newbie or an experienced property investor.

It’s crucial to create a strategic business plan for short-term rentals before you hand over a deposit or receive the keys. A viable business and management plan will help you identify the risks and prepare you for the challenges ahead.

In this article, we look at what a business plan is, give you samples and templates to use, and analyze the 15 steps your vacation rental business plan needs to help you get started.

Don’t see the form to download our Vacation Rental Business Plan PDF? Click here .

What is a vacation rental business plan?

Simply put, your business plan is an overarching set of rules, goals, and frameworks to help you make decisions for your new business and its future.

Not only will a vacation rental business plan help you define your strategy, but you can repeatedly refer back to it to ensure you are going in the right direction.

Business plan vs. vacation rental business model

Many aspiring rental owners confuse these two documents or assume they’re the same, so let’s review the differences.

A short-term rental business plan is a detailed document that outlines your business goals and how you plan on achieving them. A short-term rental business model, on the other hand, is your core framework for providing value to guests and operating profitably. Business models are much shorter, often including only a customer value proposition and pricing strategy.

Why do you need a vacation rental business plan?

Vacation rental owners are eager to hit the ground running when they buy their first properties—who wouldn’t be? Any vacancy or downtime on the property means more money that’s coming out of your pocket. A vacation rental property business plan will guide you through the initial steps and beyond, helping you maximize your profit and success as a host.

Beyond just making money, having a good business plan for vacation rentals will allow you to measure success and identify areas for improvement accurately. For example, it will help you focus on key metrics, such as your budget, local market insights, and expansion opportunities.

How to write a short-term rental business plan: video summary

15 steps to create your vacation rental business plan

To make things easier for budding entrepreneurs, we’re including 15 steps to help you succeed in writing your short-term rental business plan. We also reached out to the following industry professionals for their insights!

• Antonio Bortolotti , founder of Vacation Rental Secrets and host of the Vacation Rental World Summit
• Cynthia Chan , co-founder of Airhosts Forum (the largest Airbnb host forum online)
• Karen Spencer , founder of The Business of Holiday Rental

Prefer a downloadable template? Scroll to the bottom of the page to download our customizable Short-Term Rental Business Plan PDF !

Step 1. Executive summary

For people outside Fortune 500 companies, writing an “executive summary” can be a bit scary. However, it’s a lot simpler than you may think!

An executive summary is just a few sentences that summarize your vacation rental business and includes all the essential information you want to get across. This is so that anyone can read the first page of your plan and know, at a glance, what your business entails.

Start by asking yourself the famous five Ws:

• Where is your vacation house located? By the beach, in the middle of the city, or in the countryside?
• What is it? A family vacation home, a glamping accommodation, or an ideal spot for business travelers?
• Who is it for? Families , couples , or large groups of friends?
• When is it best to stay at your rental? The summer, winter, or year-round?
• Why do you have this property? Is this a spare room you’re renting out for extra cash, a way to top up your pension if you’re retired, or your main form of income?

Answering these questions will help you outline what information you would like to include in your executive summary. You can then rewrite your responses to make sure your summary sounds professional.

Note: If you are still unsure about the details of your executive summary, feel free to do it at the end of your business plan—it’s a case of saving the best until last!

Step 2. Business goals

Your executive summary is going to give you a broad overview of where your business is going, but the goals section will help to further solidify this vision. Goals are what help you to set markers for what success in your business looks like.

Are you satisfied with a couple of bookings a month, or are you expecting a full reservation calendar by the end of the year? You’ll need to set goals to help pin this down.

What’s more, make sure your business goals are SMART: smart, measurable, attainable, relevant, and time-based.

Step 3. Value proposition

As with any business, you’ll need to state why customers are going to choose your business. It’s difficult to take yourself out of the equation when evaluating your business. After all, you’ve poured your blood, sweat, and tears into this project, so why wouldn’t guests choose you?

No amount of effort is enough if it’s not adding any value to your vacation rental. Consider how your vacation rental will provide a guest experience that the other properties in your area simply can’t provide.

Step 4. Company analysis

In this section, you should aim to explain the unique selling points (USPs) of your new vacation rental business, outlining what it will bring to the existing market.

Start by asking a few simple questions to figure out how you’re different (and better) than other rental properties out there. After all, once you are confident in your strengths, your guests will be, too!

Here are a few examples:

Is it better than others because of its location?

• Is it close to the beach?
• Main public transport lines?
• Is it off-the-grid?

Is the price of your accommodation better?

• Are you the cheapest accommodation around?
• Are you the best value?
• Do you offer discounts at certain times of the year?

Are the interiors of your property different or better than the rest?

• Do you offer a cozy, rustic getaway?
• Do you offer a fireplace where a family can sit at night?
• Is it a themed vacation rental ?

Step 5. Industry analysis

If you want to be successful in the rental business industry, you’ll need to be strategic and competitive in your company management plan. So, this section is where you state some key facts about current trends and expectations.

One of the ways to do this is by carrying out an industry analysis. This is basically looking at other vacation rental businesses and evaluating them.

Here are some sample questions that will help start your industry analysis:

What do vacation rentals near me charge per night?

• Would you class it as affordable or good value?
• Is it less than $50 per night? Or Is it more than $300?
• Think about the figures you come up with in relative terms, weighing the value of what the business is offering against the price they charge. This will help you start to price competitively.

Who is their target audience and clientele?

• Are they families ?
• Couples looking for a romantic break?
• Do they target students and school groups who need large but basic accommodations?

Are they luxury units or more basic rentals?

• Are they upmarket rentals in the most expensive parts of your area?
• Or are they modest vacation home rentals that students could afford?
• Do the rentals tend to fall in one end of the price range, leaving a gap in the market?

Are they self-catered or Bed & Breakfast?

• Do they offer a light breakfast?
• Or do they offer a breakfast buffet?

What websites/agencies do they use for bookings and advertisements?

• Are all your competitors advertising on Airbnb , Vrbo , etc.?
• Do they collaborate with local tourism agencies?
• Are they all missing out on a popular booking website that only you know about?

“I recommend owners to focus on profit per booking, not occupancy rates. We’re in it to make money, not fill as many nights as possible (that comes next). We could all be 100% full if we undervalued what we were offering. That doesn’t make good business sense. Be prepared to spend more when you first start out, to bring a quality product to the market. You’ll soon reap the rewards this investment in your future business will bring.” – Karen Spencer

Step 6. Customer analysis

Your customers—or rather, your guests—are how you are going to make your money. That’s why it’s important to understand and target them properly.

In your plan, create different buyer personas based on the types of guests you want to attract. This is like a profile of your ideal customer, from age to income. You should try to make it as detailed as possible because it will help your business grow later.

Creating buyer personas starts with a customer analysis. A customer analysis is just getting to know your customers and what they want and need from a rental property and a vacation.

Here are some key questions you should ask yourself about your ideal guest:

• What’s their name? It may seem silly to name a fictional person, but it will bring your customer analysis to life and help you imagine the buyer persona.
• What do they work as? For example, are they a high-flying banker, a medical professional, or an educator?
• How old are they? Think in terms of age ranges: 18-25, 25-40, and 40-60, and 60+.
• Do they have a family? If so, how many children do they have?

Keep going with questions like this until you’ve built an entire profile of the person. This will then help you understand their values, spending habits, common complaints, and amenities they’ll be looking for.

Getting anxious to dive in? Scroll to the bottom of the page to download our customizable Vacation Rental Business Plan PDF and get started!

Step 7. Competitive analysis

Another element of your vacation rental property business plan is conducting competitor research. Take a look at the market to find your direct competitors and analyze them to see how your business can thrive.

Competitive analysis is similar to industry analysis, but this time you’re going to focus on your immediate competitors rather than the industry as a whole. For example, if your short-term rental is a house by the beach, your direct competitors would be other accommodation providers on the beach.

With competitive analysis, you want to look at the people who may win a booking over you and use what you find to put yourself on top. Ask questions such as the following:

How much are my competitors charging per night?

• Competitor 1 – $100
• Competitor 2 – $150
• Competitor 3 – $200

Using this information, you may decide to drop your prices below $100 to become the cheapest option among your competitors and increase your booking rates.

What standard of accommodation do they offer?

• Are they all standard camping sites?
• Or are they high-end units?
• Are they somewhere in between, suitable for most travelers?

Do they offer airport transfers/pick-up service?

• Yes, but for a very high price.
• Yes, and for a reasonable price.

Do they offer a wide range of amenities in the house?

• No, most don’t even offer Wi-Fi.
• Yes, some offer basic things like a washing machine and television.
• Yes, all offer basic amenities, and some even include luxury amenities (like a swimming pool or gym).

Step 8. Operations plan

The operations plan is simply an insight into how you’re going to run your new business on a day-to-day basis. It will consider whether you will hire any staff, what standards you will set, and how you will keep track of inventory and other administrative duties.

This will be one of the most straightforward parts of your business plan. Chances are, you already have all of this planned.

Here are a few helpful prompts and examples in case you get stuck:

Am I going to hire any staff?

• No, I’m only renting out one room in my home, which I can do myself.
• Yes, I’m renting out several large apartments, and I have a separate, full-time job.
• No, my partner and I will do the work together.

Who is going to clean the rentals between guests?

• A cleaning agency?
• A neighbor?

Do I need to hire an accountant to help me handle the finances of my business?

• No, I’m comfortable dealing with all of those things.
• Yes! I don’t know the first place to start when dealing with taxes or business records.

Who will deal with bookings and customer complaints?

• Myself, with only one room it will be very manageable.
• I will hire an assistant to help with all of this administration stuff, I won’t have time!
• My daughter/son, it will be a good part-time job for them to give them an allowance.

To keep things simple, you can also use solutions such as Lodgify’s property management software and channel manager .

Step 9. Marketing plan

Explain which strategies you will use to advertise your business and generate bookings. Think about both online and offline marketing , as well as any campaigns or promotions you plan to run externally.

This is when your buyer persona (which you created earlier) will come in handy. If you know the people you’re trying to target, you’ll know what websites they use and what type of marketing will be suitable for them.

Your marketing strategy can be really diverse. Here are some questions to help you sketch it out:

What methods of online marketing should I use?

• I will just list my bookings on one travel website because that is enough for me.
• I will have my own, personal vacation rental website . My site, my rules!
• I have several properties to rent, so I will list them on several vacation rental websites to increase traffic and booking numbers.
• I will pay for Google Ads in my local area.

What methods of offline marketing should I use?

• None, online marketing will be enough for me.
• I will print flyers and leave them in local tourist offices.
• I will give each guest business cards and ask them to recommend me to friends and colleagues.

Do I have a website?

• No, I don’t want/need to create one.
• No, but I want one! I need to hire someone to create one for me or try a professional website builder .
• Yes, I have one, and I’m going to hire a search engine optimization specialist to help me increase the number of visits to it.

Do I have business cards ?

• No, I don’t need any.
• Yes, I have some but I won’t use them.
• Yes, I have some, and I’m going to use them as part of my marketing strategy.

“While I’m not sure there is a one-formula-fits-all, there are a few things that helped me: a great website, awesome warm-hearted, personal communication skills, finely tweaked standards, procedures and operations, an open mind and willingness to widen your horizon by questioning what you’ve achieved and learning what’s next. Because we are in an ever-changing and challenging world and only those willing to adapt to the changes will survive.” – Antonio Bortolotti

Step 10. Task delegation and employee management plan

It pays off to dream big, but make sure you have the capacity to do so. How will you manage guest turnover if you’re planning to rent your property every night? Better yet, who will manage guest turnover?

Depending on the scale, your goals will take some serious work to get there. Make sure you’ve factored in how you will manage it alone or how you plan to delegate tasks.

If you know that you’ll need to hire some staff, be it a property manager, cleaning service , or maintenance person, you’ll have to plan for how you’re going to distribute and delegate the work. Using task management tools and including them in your business plan outline will help you to make the most of your teams’ efforts.

“In such a demanding and dynamic industry as ours, finding the right combination of software that aligns with your individual business needs is key to accomplishing all this. And it’s not easy.” – Antonio Bortolotti

Step 11. Distribution plan

Websites like Airbnb and Vrbo are referred to as online travel agencies , or OTAs. For all new hosts, presence on OTAs and listing sites is essential to get bookings.

Your distribution plan should consider which channels you’ll be advertising on, how much they’ll cost you, and how you’ll manage them (hint: you might need a channel manager ).

Here are some helpful example questions to get you started writing a distribution plan:

Which OTAs do I want to list my property on?

• Every OTA that is available? I need lots of bookings!

How much will this cost me?

• Is it free?
• Do you have to pay monthly to list on these websites?
• Do they take a commission off bookings you receive from that website?

Are there any tools available to help me manage all of this?

• Yes! A channel manager .
• A channel manager is a tool you can use to ensure all of your bookings, dates, and arrangements remain in one place so you don’t get overwhelmed managing calendars from multiple OTAs.

When I do get a booking, how will I receive the payment?

• PayPal account.
• Bank transfer.
• Cash/card payments directly from guests upon arrival.

“If a host’s goal is to maximize their revenue and bookings, it definitely makes sense to list on several platforms. Based on research from one of our partners, Tokeet, they found that some of their hosts had reported a 20% increase in bookings once they used a channel manager to list across several home-sharing sites. I would recommend that if a host is listing across several platforms, they should utilize a channel management program to make it easier to manage their listings and their calendars so they don’t double book.” – Cynthia Chan

Step 12. Revenue management plan

So, this is the numbers part. But don’t worry— revenue management is not as scary as it sounds!

In this section, you’ll have to include information about the rates you plan to charge for your vacation rental, alongside any details about pricing or yield management tools you will use.

For people who feel overwhelmed by this, there are a lot of tools and software out there to help. To start with, we’ve written some quick questions to cover the basics of your revenue management plan to make sure your accounts and business stay well in the green.

How much will I charge per night?

• Fixed price: $100 per night.
• I’ll use dynamic pricing , increasing the amount during busy periods.
• I’m still undecided.

Pro tip: Lodgify Dynamic Pricing uses an algorithm that factors in 40+ listing attributes, market conditions, and local trends to automatically optimize your nightly rates.

What level of taxes will I have to pay to the government?

• I’m not sure. I need to research this before writing my revenue management plan.

How much will my utilities cost?

• Water is $50 a month.
• Trash collection is $30 a month.
• Electricity will vary depending on how many guests I’ll have.

What will my staff costs be?

• Zero, I’m doing all of the work myself.
• Low, I’m paying my teenage children an allowance to help me with some household chores.
• High, I’m going to hire a cleaning agency, a marketing specialist, a website developer, etc.

What’s my target monthly income?

• Anything above $0 at the beginning?

“Set stretching yet realistic prices. Quality holiday homes can charge more (because they are worth more) than an average place. When it comes to setting your prices, you need to know what it costs you to welcome each set of guests and work up from there, ensuring a healthy profit per booking every time. The more you charge per week, the more revenue per booking, yet your changeover costs, your marketing costs, your time spent, will be the same.” – Karen Spencer

Step 13. Financial plan

Think about how you are going to finance your new business. As with anything in life, proper budgeting will prevent future stress and help your business thrive.

So, what kind of information makes up a financial plan?

Will I need to take out a loan?

• No, I’m just renting out an existing property with everything ready to go.
• Yes, I will need a small loan to renovate this property.
• Yes, I will need a substantial loan to purchase the property/land where I’m going to build my rental.

What will the interest rates be?

Do I have savings I’m ready to invest into it?

• I don’t want to put my savings into it.
• Yes, I have a small amount that I’ll use for redecoration.
• Yes, I have lots of savings that I’ve been keeping for a project like this!

What level of monthly loan payments can I manage?

• None, my business has small incomings, so I don’t want to take a loan.
• $100 for a small loan?
• $750+ for substantial mortgage repayments?

“Not factoring in the cost of educating yourself is a luxury you can’t afford. The reason I’m part of online communities (I go to industry conferences like VRMA and I put together the Vacation Rental World Summit ) is because I’m the first one to not know everything.

I’m aware that if I want my business to thrive while this industry changes and crashes, I need to stay informed on what’s changing, adjust my strategies accordingly, and be prepared for what’s coming.” – Antonio Bortolotti

Step 14. Key milestones and business future

Write down your plans and goals for your business, plus what key milestones will help you achieve these targets.

When you start any project, whether it is going back to university, exercising, or starting a business, it is really important to track your progress. This section will be useful to refer back to and ensure you’re on the right track.

Here are some good milestones to use for your rental business:

How much do I want to make each month?

• $500? $750? $3.000?
• This answer will be linked to your financial plan, so this is a good time to go back and look at what you wrote down in Step 10.

How many guests do I want in the first quarter?

• As many as possible—I know I’m still in the beginning.

What rate of growth do I want in my bookings year-on-year?

• I’ll figure this out in the second year. I’m just getting started at the moment.

How many returning clients do I want each year?

• At least 10?
• More than 20—I’m confident in the service I provide.
• As many as possible!

“The biggest hurdle that Airbnb hosts have to get through in their first few years of business is to get enough reviews so that guests are comfortable staying at your listing. The more reviews you have, the higher your listing appears in the search results as well, so the biggest focus for hosts should be to get as many good reviews as possible.” – Cynthia Chan

Step 15. Vacation rental business plan: appendix

The appendix in your vacation rental business plan should include all of the relevant documents you have for your business, containing the vital information you need to keep things running.

For example, ask yourself:

• What’s the number for a plumber, just in case I have problems with the pipes?
• Where are my tax registration details?
• Have I kept receipts of all of the things purchased for my business recently?
• Have I backed up my online bookings and calendar somewhere?

Scroll to the bottom of the page to download our customizable Short-Term Rental Business Plan PDF and get started!

Vacation rental business plan: tips and tricks

So, you followed the 15 steps above. Now you’re done, right?

Well, not quite. With the industry growing increasingly competitive, it pays off to follow a few additional tips to get a competitive edge:

• It’s all about the timing. Writing a business plan before buying the rental home is advisable, so you can truly judge if it is a worthwhile investment and business venture.
• You get back what you put in. If you invest time, money and effort into your business, you will reap financial and personal rewards. And to be number one, you need to invest more effort and time than your competitors.
• Quality over quantity. Don’t forget that most people will choose value over price, so don’t compromise one for the other.
• Get yourself out there. The more places you advertise your business (your own website , third-party platforms , social media , etc.), the more bookings you’re going to get.
• Enjoy yourself! The old saying that you’ll never work a day in your life if you love what you do is completely true with vacation rentals. And the more you enjoy yourself, the better the experience will be for guests.

“Quality is essential in everything you do. From the product you bring to the market to the excellent customer service you offer your guests.” – Karen Spencer

Common mistakes found in short-term rental business plans

For many hosts, owning a vacation rental is their first business venture. So, it’s all too easy to make mistakes along the way. Here are some of the most common mistakes to look out for:

• Targeting everyone: We know you want to welcome as many guests as possible. Still, you should avoid trying to attract all guest types, as it might lead to attracting none. Instead, define your target customers based on your value proposition.
• Ignoring the competition: Evaluate your competitive edge in price, value, style, and availability to see where you need to improve. Recognize that rivals may outdo you, even if you believe your rental is the best.
• Making an unrealistic finance plan: Avoid overestimating revenue and underestimating the budget. You may have big goals, but maintain a realistic approach to financial planning.
• Assuming standard home insurance covers you: Include vacation rental insurance , and specifically a policy tailored for vacation rental owners, in your business plan to ensure proper coverage.

Download our free vacation rental business plan template

Don’t know where to start? Don’t worry!

All you have to do is download our free vacation rental business plan sample below and fill in your own information. Our handy guide includes all of the questions you need to ask yourself before starting your new venture.

Hi, Amazing article to learn from basics to advanced in vacation rental business. Thanks for sharing this wonderful article with us.

Fantastic article Jess as always. Even though we’re on our 2nd property and they both are doing well we are going to go back and go through the steps in the business plan. I bet it will help us refine our ideas for moving forward. Thanks again!

Well… consider yourself added to my blogroll. I have like six other blogs I read on a weekly basis, guess that number just increased to seven! Keep writing!

What kind of insurance is available?

Hi Dorothy,

I suggest you check out our article about the different types of vacation rental insurance available. You’ll find it here .

Riley & The Lodgify Team

Thanks for sharing this useful information! Hope that you will continue with the kind of stuff you are doing.

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The Ultimate Guide to Starting a Short Term Rental Business

Our guide tackles how to start a short term rental business, proper handling and maintenance, and everything else you need to know about the market.

Starting a short-term rental business has emerged as a lucrative venture for entrepreneurs looking to tap into the booming travel and tourism industry. Understanding the nuances of the short-term rental market is crucial, whether you're considering converting your property into a vacation hotspot or investing in real estate specifically for this purpose.

We've crafted the ultimate guide designed to walk you through the essentials of launching and managing a successful short-term rental operation. It also aims to equip you with the knowledge and tools to capitalize on this opportunity.

Understanding the Short Term Rental Market

The short-term rental market has revolutionized the way people travel and experience new destinations. At its core, a short-term rental is a furnished living space available for temporary stays, typically ranging from a few nights to several months. This market caters to a wide array of guests, from vacationers and business travelers to those seeking stays for special events or temporary housing during relocation processes.

Definition and Scope

Short-term rentals are distinct from traditional lodging options such as hotels and long-term lease apartments. They offer a more personalized and home-like experience, often providing guests with amenities like kitchens, living rooms, and private outdoor spaces.

The scope of properties available in the short-term rental market is vast, encompassing everything from studio apartments in urban centers to sprawling villas in secluded locations. This diversity allows hosts to cater to a wide range of preferences and budgets, making short-term rentals an appealing choice for a broad spectrum of travelers.

Evolution of the Market

The evolution of the short-term rental market is a testament to the changing dynamics of travel and accommodation preferences. Initially, short-term rentals were informal arrangements, often made through classified ads or word of mouth. However, the advent of internet platforms like Airbnb, VRBO, and Booking.com in the late 2000s and early 2010s marked a pivotal shift.

These platforms simplified the process of listing, discovering, and booking accommodations, thereby fueling rapid growth in the market. They also introduced a level of trust and security previously absent from informal rental agreements, thanks to features like user reviews and secure payment processing.

The technological advancements and increasing internet penetration have further propelled the market's expansion. Today, the short-term rental industry is a significant component of the global travel ecosystem, offering an alternative to traditional hotel accommodations and contributing substantially to local economies.

Trends Shaping the Market

Several key trends are currently shaping the short-term rental market, influencing both hosts and guests:

• Increased Demand for Authentic Experiences - Modern travelers increasingly seek authentic, localized experiences over generic hotel stays. This trend has boosted the popularity of short-term rentals, as they often provide a more immersive experience in the local culture and community.
• Rise of Digital Nomadism - The growing trend of digital nomadism, where individuals work remotely and live in different locations around the world, has increased the demand for short-term rentals. These accommodations offer the flexibility and amenities that digital nomads need for both living and working.
• Sustainability Concerns - There's a growing awareness and concern for environmental sustainability in travel. Many short-term rental hosts are now emphasizing eco-friendly practices and sustainable living options to attract conscientious travelers.
• Regulatory Changes - As the short-term rental market has grown, so has the attention of local governments and regulatory bodies. Many cities and regions have introduced regulations to manage the impact of short-term rentals on housing markets and communities. Hosts must navigate these regulations carefully to ensure compliance.
• Technological Integration - The use of technology in managing short-term rentals has become increasingly sophisticated. From dynamic pricing algorithms to smart home technology for guest access and comfort, technological advancements are making it easier for hosts to manage their properties and enhance guest experiences.

Understanding these dynamics is crucial for anyone looking to enter the short-term rental market. By staying informed about the definition and scope, evolution, and current trends, aspiring hosts can better position their properties for success in this competitive and ever-changing industry.

Planning Your Short Term Rental Business

Launching a successful short-term rental business requires careful planning and strategic thinking. This section will guide you through setting clear business objectives, identifying your target market, conducting thorough market research, understanding legal requirements, and laying out a comprehensive financial plan.

Setting Business Objectives

The first step in planning your short-term rental business is to define clear, achievable objectives. Consider what you aim to accomplish with your rental property. Are you looking to generate a steady income, achieve a specific financial goal, or perhaps diversify your investment portfolio?

Your objectives will influence every decision you make, from property selection to marketing strategies and operational management. Establishing specific, measurable, achievable, relevant, and time-bound (SMART) objectives will provide a solid foundation for your business plan.

Identifying Your Target Market

Understanding who your guests are likely to be is crucial in tailoring your offerings to meet their needs and preferences. Your target market could range from business travelers and couples seeking romantic getaways to families looking for holiday vacations or individuals searching for a short-term housing during relocation.

Each demographic has unique needs, such as Wi-Fi for business travelers or child-friendly amenities for families. Identifying your target market early on will help you make informed decisions about property location, design, and the amenities you offer.

Conducting Market Research

Market research is essential to understand the competitive landscape and identify opportunities for your short-term rental business. Analyze local market trends, including average rental prices, occupancy rates, and seasonal demand fluctuations .

Look into the types of properties that are in high demand and any gaps in the market that you could potentially fill. This research will help you position your property effectively, price it competitively, and tailor your marketing efforts to attract your ideal guests.

Legality and Regulations

Before diving into the short-term rental business, it's crucial to understand the legal landscape. Regulations regarding short-term rentals vary widely by location, including zoning laws, licensing requirements, and taxes.

Some areas may have restrictions on the length of stay, the type of property that can be rented out, or require hosts to register and obtain a permit. Failure to comply with local laws can result in hefty fines or even the shutdown of your rental business. Therefore, it's important to research and adhere to all regulatory requirements in your area.

Financial Planning

A solid financial plan is the backbone of any successful business venture. Start by estimating your initial investment costs, including property purchase or lease, furnishing, renovations, and any necessary licenses or permits.

Next, project your ongoing expenses, such as utilities, maintenance, cleaning services, and marketing. Once you have a clear understanding of your costs, you can develop pricing strategies for your rental to ensure profitability.

You should also consider factors like market rates, seasonal demand, and unique value propositions when setting your prices. Additionally, plan for financial contingencies and set aside a reserve fund for unexpected expenses.

Choosing the Right Property

Selecting the ideal property is a pivotal decision in the journey of starting a short-term rental business. This choice impacts not just the profitability of your venture but also its operational aspects and appeal to potential guests.

Let's explore the critical factors involved in making this decision, including location analysis, understanding different property types, key considerations, and the process of conducting a thorough property evaluation.

Location Analysis

The adage "location, location, location" holds especially true in the short-term rental market. A property's location is often its most significant selling point, influencing both its occupancy rates and nightly rates. When analyzing potential locations, consider the following:

• Proximity to Attractions: Properties near tourist attractions, business districts, or event venues often enjoy higher demand.
• Accessibility: Locations that are easily accessible by public transport or have good connectivity to major roads and airports are more attractive to guests.
• Neighborhood Quality : Safe, clean, and quiet neighborhoods generally receive more bookings. The local ambiance, including restaurants, shops, and parks, can also add appeal.
• Market Saturation: Assess the competition in the area. A location with fewer short-term rentals may offer more opportunities, but research why the saturation is low.

Using a tool like BNBCalc can help speed up the process. It aggregates and analyzes data on average rental income, occupancy rates, and seasonal trends for various locations, offering insights into potential profitability and market demand. By leveraging this information, investors can make informed decisions on the most lucrative areas to invest in for their short-term rental properties.

Property Types

The type of property you choose can significantly affect your business model. Here are a few options:

• Apartments and Condos: Ideal for city travelers and business guests, offering a homey environment with the convenience of urban living.
• Single-Family Homes: Suitable for families or larger groups seeking space and privacy, often preferred for longer stays.
• Unique Properties: Cabins, treehouses, or beachfront properties can attract guests looking for a unique experience, allowing you to charge a premium.

Consider the maintenance and management needs of each property type, as well as the legal restrictions that may apply in certain areas.

Factors to Consider

When choosing a property, there are several key factors to consider:

• Target Market: Your property choice should align with the preferences and needs of your identified target market.
• Return on Investment (ROI): Calculate potential ROI, considering purchase price, renovation costs, operational expenses, and expected revenue.
• Operational Complexity: Consider how the property's size, amenities, and location will impact the ease of management and maintenance.
• Future Potential: Assess the area's potential for growth or development, which could increase property value and demand over time.

Conducting Property Evaluation

A thorough property evaluation is essential to ensure you make an informed investment. This evaluation should include:

• Physical Inspection: Assess the property's condition, including structural integrity, plumbing, electrical systems, and any necessary repairs or upgrades.
• Market Research: Analyze comparable rental properties in the area to understand market rental rates, occupancy levels, and seasonality.
• Legal and Regulatory Check: Verify zoning laws, short-term rental regulations, and any homeowners association (HOA) rules that could affect your ability to rent out the property.
• Financial Analysis: Create detailed financial projections, including initial investment costs, ongoing expenses, and potential revenue. Tools like cash flow analysis and break-even analysis can help you understand the financial viability of the property.

Choosing the right property for your short-term rental business requires a balance of research, financial acumen, and strategic thinking. Remember, the goal is not just to find a property that meets your current objectives but one that also offers potential for growth and adaptability in the ever-evolving landscape of short-term rentals.

Setting Up Your Property

Once you've selected the perfect location and property for your short-term rental business, the next crucial step is setting it up to attract guests and ensure their comfort and satisfaction. This process involves thoughtful design and furnishing, equipping the space with essential amenities (and those extra touches that make a difference), choosing the right method for management, and adhering to safety and compliance standards. Here's a breakdown of these critical aspects:

Design and Furnishing

The design and furnishing of your rental property play a significant role in its appeal to potential guests. Aim for a clean, welcoming, and functional interior that reflects the character of the property and its surroundings.

Use high-quality, durable furniture that can withstand the wear and tear of frequent use. Opt for a neutral color palette with a few accent colors to create a sense of warmth and spaciousness. Remember, your property's aesthetic should not only be photogenic (since photos are a major selling point in listings) but also practical, ensuring guests have a comfortable stay.

Essential Amenities and Extras That Make a Difference

Your property needs to be equipped with essential amenities to meet guests' expectations. These include reliable Wi-Fi, air conditioning and heating, a fully equipped kitchen, comfortable bedding, and basic toiletries.

However, it's the extras that often make a property stand out and lead to rave reviews and repeat bookings. Consider adding a coffee machine, a selection of teas and coffees, a smart TV with streaming services, or a well-curated guidebook of local attractions and dining options. Outdoor spaces can also be enhanced with comfortable seating, a grill, or even a hot tub to increase the property's appeal.

Smart Home for Management

Incorporating smart home technology can significantly streamline the management of your short-term rental and enhance guest convenience. Smart locks eliminate the need for physical key exchanges and allow guests to check in and out independently.

Thermostats like Nest can help manage energy costs efficiently, while security cameras (placed in public areas with guests' privacy in mind) can help ensure the safety of your property. Additionally, smart lighting and voice-controlled devices can offer guests a modern and convenient living experience, potentially boosting your property's reviews and ratings.

Safety and Compliance

Ensuring the safety of your guests and compliance with local regulations is paramount. This involves installing smoke detectors, carbon monoxide detectors, and fire extinguishers in key areas of the property.

Make sure that all exits are clearly marked and unobstructed, and consider providing a first aid kit. It's also important to familiarize yourself with and adhere to local safety regulations, which may include requirements for emergency lighting, safety signage, or specific locks on doors.

Moreover, your property should comply with all local zoning laws and short-term rental regulations. This might involve obtaining a license or permit, paying occupancy taxes, and adhering to operational guidelines set by local authorities.

Failure to comply can result in fines, legal issues, or the suspension of your rental operations, so thorough research and adherence to these regulations are crucial.

Listing Your Property

Once your short-term rental property is set up and ready to welcome guests, the next crucial step is to create a compelling listing that will attract bookings. A well-crafted property listing, a strategic pricing approach, and efficient management of bookings and communication are key to the success of your rental business. Here's how to navigate each of these components effectively.

Crafting a Compelling Property Listing

The cornerstone of a successful short-term rental listing is high-quality, engaging content that showcases the best features of your property. This includes professional photographs that highlight the space's comfort, style, and unique amenities.

Write a detailed description that paints a vivid picture of what guests can expect, emphasizing any special features or conveniences, like a scenic view, proximity to tourist attractions, or unique interior design elements.

Be sure to also highlight practical aspects such as sleeping arrangements, kitchen amenities, and Wi-Fi quality. Remember, transparency is key—ensure your listing accurately reflects your property to set the right expectations and avoid guest disappointment.

Choosing the Right Pricing Strategy

Pricing your short-term rental competitively while maximizing your earnings requires a dynamic strategy that considers several factors. Analyze your local market to understand the going rates for similar properties and consider the seasonality of demand in your area.

Utilize dynamic pricing tools that adjust your nightly rates based on real-time market data, local events, and peak travel seasons. Offering introductory rates can help generate initial bookings and reviews for new listings.

Keep in mind the value of your unique offerings and adjust prices accordingly to reflect the quality and experience your property provides.

Operating Your Short Term Rental

Operating a short-term rental business goes beyond just listing your property and accepting bookings. It encompasses creating a memorable guest experience, maintaining a high standard of cleanliness and upkeep, effectively handling feedback, and navigating the inevitable challenges that arise. Let's delve into each of these crucial aspects.

Guest Experience and Management

Enhancing the guest experience starts with a seamless check-in process. Consider smart lock systems for easy access or a personal greeting if feasible. Provide a detailed welcome guide that includes Wi-Fi passwords, instructions for appliances, and local recommendations to make their stay as enjoyable as possible. Small gestures like welcome baskets or personalized notes can significantly impact your guests' overall satisfaction and leave a lasting impression.

Cleaning and Maintenance

Maintaining a pristine and well-functioning property is non-negotiable in the short-term rental industry. Implement a thorough cleaning protocol between stays to ensure your property meets high hygiene standards, which is especially crucial in the wake of health concerns like the COVID-19 pandemic.

Regular maintenance checks are vital to prevent minor issues from becoming major inconveniences for your guests. Consider hiring professional cleaning and maintenance services to manage these tasks efficiently, ensuring your property remains in top condition.

Handling Guest Feedback

Feedback, whether positive or negative, is invaluable for the growth and improvement of your rental business. Encourage guests to leave reviews after their stay. Respond to all feedback graciously, thank guests for their positive comments, and address any criticisms constructively.

Use negative feedback as an opportunity to demonstrate your commitment to guest satisfaction by acknowledging the issues raised and outlining the steps you're taking to resolve them. This not only improves your service but also shows potential guests that you're responsive and care about their experience.

Dealing with Challenges

Running a short-term rental business is not without its challenges, from last-minute cancellations to unexpected maintenance issues. Developing a contingency plan for common problems can help you navigate these situations more smoothly. For cancellations, have a clear and fair policy in place and consider overbooking strategies similar to hotels.

For maintenance issues, keep a network of reliable contractors who can address problems promptly. Being prepared and having a proactive approach can mitigate the impact of these challenges on your business and on your guests' experience.

In embarking on the journey of starting a short-term rental business, we've navigated through the foundational steps of understanding the market, selecting the right property, setting up your space, listing your property, and effectively operating your rental to ensure both guest satisfaction and business profitability. From conducting thorough market research to crafting compelling property listings and managing the day-to-day operations, each step plays a crucial role in the success of your venture.

As we conclude this guide, remember that the journey of running a short-term rental business is one of continuous learning and adaptation. Stay informed about industry trends, be responsive to guest needs, and always look for ways to improve your service and your property.

With dedication, resilience, and a focus on quality, your short-term rental business can achieve remarkable success and become a cherished destination for travelers from around the world.

FAQs for Starting a Short Term Rental Business

Why Choose Short Term Rental?

Short-term rentals offer a unique investment opportunity, combining the potential for higher returns on investment compared to long-term rentals with the flexibility to use the property for personal purposes. They cater to a growing market of travelers seeking home-like accommodations, providing a personalized guest experience. Additionally, short-term rentals allow for dynamic pricing strategies, enabling owners to adjust rates based on demand and seasonality, potentially maximizing earnings.

How to Invest in Short Term Rentals?

Investing in short-term rentals involves several steps. First, conduct thorough market research to identify lucrative locations and understand the demand and competition. Consider your budget and financing options for purchasing a property. Evaluate potential properties based on their location, amenities, and suitability for your target market. After acquiring a property, ensure it's well-furnished and equipped with essential amenities to enhance guest experiences. Finally, list your property on popular short-term rental platforms and optimize your listing with high-quality photos and detailed descriptions.

What Is the Best Location for Short Term Rentals?

The best location for a short-term rental depends on the target guest demographic and your investment goals. Properties near tourist attractions, business districts, or major event venues often enjoy high demand. Look for areas with a strong year-round or seasonal influx of visitors. Finally, a neighborhood's safety, amenities, and overall appeal can significantly impact your rental's attractiveness and occupancy rates. You can also use a tool like BNBCalc.com to help analyze the profitability of your location.

Everything You Need to Know About Short Let Apartment Business

• Reading time: 14 mins read
• Post category: Small Business Nigeria

Do you own luxurious apartments in exclusive neighbourhoods in Nigeria? Would you like to maximize the return on investment in your properties? The short-let apartment business in Nigeria is a conducive earning environment for landlords who can’t wait for annual rents on their properties. This article explains everything you need to know about the booming short let apartment business in Nigeria.

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Table of Contents

What Is a Short-Let Apartment?

A short-let apartment is a fully-furnished apartment rented out for days or weeks, just like a hotel. Business travellers are likely to choose short-lets because they are cheaper than hotels and offer better freedom of movement. In addition, hotels carry branding or signage outside the premises; short lets don’t.

Short-let apartments are like AirBnB apartments with several designs to suit most business travellers. Most contain kitchens, living and dining rooms, and bedrooms for sleeping. Some luxury options include swimming pools, laundry services, high-speed internet, and gyms. In addition, most business owners provide cleaning and facility management services to help maintain the apartment while it is in use.

Another reason short-lets are great for guests than hotels is that hotels charge per person while short let business owners charge for the apartment. Therefore, short-let flats are great for family vacations since the family can have a fully-equipped apartment for the price of one family member.

4 Benefits of Investing in Shortlet Apartments

If you have doubts about putting your money in short let apartments as a business, here are four reasons you should consider the short let business as a means to generate passive income.

Increasingly High-Profit Margins

You can make over three times the amount you make in a year from your long-term rental properties in the short let apartment business. Things change over a long period (like a year);

• property prices might inflate,
• some factors may increase the value of the said property,
• facility management costs may increase;

A property owner who rents the property for long periods uses factors present at the time of payment to determine the rental price. On the other hand, short-let properties charge per day; hence, you can increase your price just because Wizkid is performing in a club nearby. This ability to markup anytime you like affords you a chance of making way more profit than landlords who rent out long-term.

Short let Apartments Are in a High Demand Globally

You are restricted to a few people for one room or a suite when you book hotels. Short let apartments change this story by allowing you to ‘own’ a whole apartment with its amenities at a fraction of the cost of booking hotels.

In addition, short lets don’t bill you for additional provisions like a swimming pool, spa, satellite TV, etc. This makes short let apartments have a steadily increasing demand, especially among business travellers who wish to cut costs.

You Have Clients Rather Than Tenants

When you rent out your property for a long time, there is a possibility that your tenant defaults on payment or becomes so comfortable they damage your facilities. While short-let apartments are more homely than hotels, clients don’t have the luxury of being comfortable long enough to default on payments or destroy things because they pay daily. Also, since you have a long list of clients to choose from in a successful short let business, you can take data on the habits of your guests. This data helps you decide if people who apply to book your apartment are right for you. In the long run, you build a long list of clients who abide by your rules and pay premium.

More Control and Flexibility

Imagine you have plans to renovate your two-bedroom apartment to include a toilet and bath in each room. If you start with one toilet and bath for both rooms and rent out the apartment for a year, you can’t do anything until the year is over – if you wish to keep your rental fee. However, with short let apartments, you can renovate the apartment anytime you like.

Also, damages in apartments are usually due to a lack of maintenance by the tenant. It is not their property, and landlords typically charge tenants extra when they report issues. Therefore, tenants won’t report ‘minor’ issues to the landlord, and minor problems become significant issues the landlord faces after the tenant leaves. The damages paid to the landlords most times can’t cover these issues.

However, with short-let apartments, you can visit your property immediately after guests leave to take inventory of damages and fix these minor issues.

How to Manage Short Let Apartments

Most short-let apartment owners are people looking for financial freedom. The goal is for the property to make money without much involvement on their end. Here are four tips for running a short let apartment business without becoming its slave.

Hire a property manager

You might think, ‘how much is the money itself, that I will be hiring people to do stuff.’ That is the peasant way of thinking; successful business owners find ways to create time for themselves by delegating laborious tasks to others. Property managers can relieve you of headaches like;

• Apartment cleaning
• Laundry services
• Repair and maintenance
• Guest vetting
• Security and facility management

Imagine doing all these for one apartment. If you are ambitious, you want to expand fast, right? Now imagine doing all that for several apartments. Get that headache off you; hire someone to do it for a cut. This strategy is to factor the amount property managers charge into your listing prices. Also, have a preference for property managers that take a cut from the payments rather than those who take payment upfront.

Create house rules and monitor

Your apartment is only as durable as the indulgences of those who stay in it. If you have guests who smoke, your house might catch fire. Therefore, it is essential to state things guests can and can not do in your apartments clearly and in print.

Create an exhaustive list of rules your guests need to follow and make a physical copy you can place in a visible place in the house. Also, ensure you send potential guests this list for their ‘approval’ before they make payment.

Digitalize your home

It takes something special to rebook a stay after your first stay. Something special in the present world is the digitalization or automation of your house in hardware and software. Here are some things you can do to digitalize your short let apartment;

• Install high-speed internet guests can use for free while on premises
• Integrate an intelligent assistant from Google or Apple into the apartment; this helps your guest do lazy tasks like turning off the light or switching on the TV on asking
• Have a running TV subscription on which guests can watch shows
• Install intelligent digital locks for safety

Visit to inspect regularly

As frequently as once a month, you must inspect to ensure your apartment is in excellent condition. If you find damaged features or appliances not working correctly, take note and work with your property manager to fix the issues. It is tempting to forget your business in the hands of hired help. However, it is your apartment, and the hired help can’t always be to your advantage. So check in once in a while—benefits of Investing in Short Let Apartments.

Top 5 Short Let Apartment Businesses in Nigeria

1. shortlethomes.

Shortlethomes is a sister company of Digital Landlords Nigeria Limited, owned by Keji Giwa. The company provides verified, approved homes guests can feel safe and secure in while delivering quality and luxury at affordable rates. They claim to offer 5-star luxury homes at up to 75% off the price of 5-star hotel rooms.

2. Lekki Footprint Short let Apartments

The business offers furnished one-bedroom, and two-bedroom serviced short-let apartments in Lekki. The apartments are in a quiet and serene gated and access-controlled location on Admiralty way in Lekki Lagos.

3. Lifestyle 18

LifeStyle18 is a block of short-let apartments equipped with 18 tastefully furnished living quarters – 1 & 2-bed room apartments. The apartments are designed to serve the lifestyle needs of holidaymakers, family getaways, movie shoots, and honeymooners.

4. Jonathan’s Place

Jonathan’s place is a tastefully furnished three-bedroom modern-style apartment. Rooms come with split ACs and TVs with a cable subscription. The apartment is in a secured environment with parking space and proximity to all key landmarks in Lekki Phase 1. There is an in-house laundry service to handle laundry needs at a fee.

How to Promote Your Short Let Apartments

So you have short-let apartments available for booking. Those apartments won’t promote themselves. To promote your short let business, you need marketing strategies that include offline and online methods.

Your strategy depends on the location, size, and type of accommodation for which you are trying to get bookings. Here are six things you can do to promote your short let apartments.

• Build a booking website for your short let listings which serve as a home for your business online. On your website, people can check out available apartments, see their features and book a stay.
• Optimize the pages on your website for search engines. Do an on-page SEO for every listing page on your website for search terms related to the location of your apartments.
• Add your apartment listings to free online directories like Google My Business, and Make It Nigeria. If websites are allowed, these listings juice up your SEO
• Engage your friends and family to share your listings. Go to events and tell people about your business. Have a referral program to incentivize referrals.
• Create social media accounts and post engaging contents your target audience can relate to.
• Try paid online ads on Meta or Google. Target frequent international travelers or other people likely to book a stay.

If you have short let apartments for rent and are looking for tips to promote your business. This article explains how to promote your short-let apartment in Nigeria and get more bookings.

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Rental Properties Business Plan Template

Written by Dave Lavinsky

Rental Property Business Plan

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their rental property business. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a rental property business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your rental property business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to purchase a rental property, multiple rental properties, or add to your existing rental properties business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your rental property business in order to improve your chances of success. Your rental property business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Rental Property Companies

With regards to funding, the main sources of funding for rental properties are personal savings, credit cards, mortgages, and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a rental property is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will not fund a rental property company. They might consider funding a rental property company with a national presence, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results.

Finish Your Business Plan Today!

How to write a business plan for a rental property company.

Your business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of rental property you are operating and the status; for example, are you a startup, or do you have a portfolio of existing rental properties that you would like to add to?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the rental properties industry. Discuss the type of rental property you are offering. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of rental properties you are offering.

For example, you might offer the following options:

• Single family homes – This type of rental property is often owned by a single individual, rather than a company, who acts as both landlord and property manager.
• Multi-family properties – These types of properties can be subcategorized by the number of units per site. Buildings with 2 – 4 units are the most common (17.5%), while multistory apartment complexes with more than 50 units represent the next-largest, at 12.6% of the industry.
• Short-Term Rental properties – These are fully furnished properties that are rented for a short period of time – usually on a weekly basis for vacation purposes.

In addition to explaining the type of rental property you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include occupancy goals you’ve reached, number of property acquisitions, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the rental properties industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the rental property industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your rental property business plan:

• How big is the rental properties industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your rental property. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population or tourist arrivals.

Customer Analysis

The customer analysis section of your rental property business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: households, tourists, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of rental property you offer. Clearly, vacationers would want different amenities and services, and would respond to different marketing promotions than long-term tenants.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.  

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other rental property companies.

Indirect competitors are other options customers may use that aren’t direct competitors. This includes the housing market, or hotels. You need to mention such competition to show you understand that not everyone who needs housing or accommodation will seek out a rental property.

With regards to direct competition, you want to detail the other rental properties with which you compete. Most likely, your direct competitors will be rental properties in the vicinity.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What lease lengths or amenities do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior properties?
• Will you provide services that your competitors don’t offer?
• Will you make it easier or faster for customers to book the property or submit a lease application?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a rental property business plan, your marketing plan should include the following:

Product : in the product section you should reiterate the type of rental property business that you documented in your Company Analysis. Then, detail the specific options you will be offering. For example, in addition to long-term tenancy, are you offering month-to-month, or short-term rental?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the properties and term options you offer and their prices.

Place : Place refers to the location of your rental property. Document your location and mention how the location will impact your success. For example, is your rental property located in a tourist destination, or in an urban area, etc. Discuss how your location might draw customer interest.

Promotions : the final part of your rental property marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your rental property business, such as customer service, maintenance, processing applications, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect 100% occupancy, or when you hope to reach $X in sales. It could also be when you expect to acquire a new property.  

Management Team

To demonstrate your rental property business’ ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in rental property management. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in real estate, and/or successfully running small businesses.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you have 1 rental unit or 10? And will revenue grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $200,000 on purchasing and renovating your rental property, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $200,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a rental property business:

• Location build-out including design fees, construction, etc.
• Cost of equipment like computers, software, etc.
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your property blueprint or map.  

Putting together a business plan for your rental properties company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the rental property industry, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful rental properties business.

Rental Properties Business Plan FAQs

What is the easiest way to complete my rental properties business plan.

Growthink's Ultimate Business Plan Template  allows you to quickly and easily complete your Rental Properties Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of rental property business you are operating and the status; for example, are you a startup, do you have a rental properties business that you would like to grow, or are you operating multiple rental property businesses.

Don’t you wish there was a faster, easier way to finish your Rental Properties business plan?

OR, Let Us Develop Your Plan For You

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Click here to see how Growthink’s professional business plan consulting services can create your business plan for you.

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Business Plan for Short-Term Rentals: Keys to Profitable Property Management

David Ciccarelli

December 6, 2023

In this article

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When you’re launching your short-term rental business, the business plan is your roadmap to success, and the executive summary is the engaging cover letter to that plan. It’s your moment to grab attention and encapsulate your venture’s essence.

Executive Summary

Your executive summary is your overall business plan’s 1-2 page introductory section. Having written dozens of business plans in my career, I often write the executive summary at the end, pulling the highlights from each subsequent section. Picture it as your business’s elevator pitch—it must be succinct but powerful.

Here’s what you’ll find in this critical section:

• Business Goals : Clearly stated objectives give you and potential investors a shared target to aim for, for instance, achieving a 5% market share within the first two years or something very measurable like, $1,000,000 in sales by the end of 2025.
• Unique Selling Proposition (USP) : What makes your rental stand out? Is it a pet-friendly policy or a smart home tech? Highlight this because it’s your golden ticket in the competitive short-term rental market.

Consider these stats: “Recent market analysis predicts a 7% growth in the short-term rental industry by 2025.” These numbers underscore the potential that awaits you. Aim to display a snapshot of:

• Market positioning : Align your strategy with industry trends.
• Financial objectives : A forecast showing profitability timelines.

Keep this section concise—consider it the teaser that will entice readers to dive deeper into your business plan. Break down complex ideas into bite-sized nuggets of information. Imagine you’re explaining your vision to a friend; keep it friendly, but pepper it with enough stats to show you’ve done your homework.

Use bullet points or tables to distill complex data , and never shy away from bold or italic text to emphasize the winning aspects of your business model. Always remember, the executive summary isn’t just a summary; it’s the opening act, and you want to start off with a bang.

Company Description

When diving into short-term rental investments, you need a solid grasp of your business’s core elements. Think of your company description as the backbone of your business plan: a snapshot that outlines what your business is about, where it is headquartered, its corporate structure such as a corporation or LLC, goals, and unique offerings.

A good company description will also include your vision, mission, and values as these set the overall direction of your business.

Business Structure

Choosing the right structure for your short-term rental business is like laying down the foundation of a house — it’s all about stability and planning for the future. Are you going solo with a Sole Proprietorship, teaming up as a Partnership, or setting up an LLC to protect your assets? Each has its implications for tax, liability, and profit sharing. For instance, an LLC can shield your nest egg from business risks with some added tax benefits, which might be why 85% of small businesses opt for this structure.

After selecting the type of corporate structure for your business, it is essential to choose the location of your headquarters which will be mentioned in the registration documents. Your address should be easily accessible to receive postal mail such as government documents, bank statements, and other important financial and administrative letters crucial for your business’s smooth operation.

Business Objectives

What’s on your business horizon? Clear objectives are your roadmap to success. Maybe you aim to acquire ten properties next year, or it’s about hitting a $200,000 revenue milestone in the next two. Set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals. For example, you might target a 20% increase in bookings by quarter three, expand to a new city, or improve your profit margin by 15% within the next fiscal year.

Value Proposition

What makes your short-term rental shine in a sea of options? Your value proposition is the “why” someone books with you. Do you offer a coastal cottage with breathtaking sea views, a chic urban loft, or a countryside retreat with bespoke experiences? Highlighting these unique features isn’t just fluff; it’s about showcasing the tangible benefits and experiences you provide. It’s your hook – and could be why your occupancy rates might soar above the industry average of 70% . Remember, it’s not just a property; it’s the memory of a perfect getaway you’re selling.

Market Analysis

When you’re putting together your business plan for a short-term rental, understanding the market is like knowing the playing field and the game’s rules—you’ve got to get a handle on it to play to win.

Industry Overview

The short-term rental market has been a hot topic lately. According to industry analysts at Statista, the global market for vacation rentals is projected to reach a whopping $169.7 billion by 2024 . That’s huge! This growth is driven by travelers’ increasing preference for home-like accommodations and the rise of platforms like Airbnb and VRBO.

Target Market

Now, who exactly do you envision staying in your short-term rental? Your target market might be solo adventurers, couples seeking a romantic getaway, or even larger groups looking for a cost-effective stay. This process is known as defining your ideal customer profile , or ICP for short. But remember, it’s not just about the beds; today’s travelers are hunting for that seamless, hotel-like experience , with nature spots particularly trendy. Where does your property fit? Knowing your demographic’s preferences is key to tailoring your services.

Competition

Let’s talk about the other players on the field. Depending on how broad of a view you want to take, your online competition could be all the other vacation rental platforms and all their listings as well a direct booking website highlighting properties in your geographic area. Offline, your direct competitors are other short-term rentals in your vicinity, and they can range from simple studio apartments to extravagant villas . You could offer that irresistible blend of high-tech amenities , personal touches, or even partnerships with local businesses for an authentic experience to stand out. Keeping an eye on these rivals helps you find your unique edge in the market.

The market analysis is all about knowing the context of the industry, your target market, and who you’re up against in terms of competition. With a robust market analysis, you’ll not only keep up with the trends but set a few of your own.

Marketing Strategy

Developing a comprehensive marketing strategy for your short-term rental business is crucial. Your approach should distinguish your property, target the right customers, and keep them engaged.

Branding and Positioning

Your property isn’t just a place to stay; it’s an experience waiting to happen! Identify unique selling points (USPs) that make your rental special. Is it the killer view, the cozy ambiance, or perhaps the unbeatable location ? Highlight these features in all your branding efforts to create a compelling image in the potential guest’s mind.

Promotion and Advertising

Did you know that, according to a survey, over 75% of consumers make decisions based on online search and social media presence? Let’s put those numbers to work! Here are actionable steps for your advertising campaigns:

• Vacation Rental Platforms : Listing your properties on online platforms is where most people start because it’s a turnkey solution for getting visibility in front of potential renters. Listings are free and you only pay a fee out of your bookings when someone books a stay.
• Social Media : Engage with your audience where they spend much time. Platforms like Instagram and Facebook are perfect for showcasing your property with vibrant photos and videos.
• Advertising : Invest in targeted advertising to reach potential guests. Platforms like Google Ads and Meta Advertising, which covers Facebook, Instagram and WhatsApp, allow you to display your property to users actively searching for rentals.

Customer Engagement

“It’s not just about the stay; it’s about the story!” Keep your customers at the heart of your marketing strategy. Delve into customer analysis to understand their preferences and tailor your communication to resonate with them. Here’s what you can do:

• Personalized Communication : Use email campaigns to share special offers and upcoming events, always aiming to add value to the customer experience.
• Feedback and Reviews : Encourage guests to leave reviews and promptly respond to them. According to a market research firm, properties with higher review scores tend to see up to 20% more bookings .

Operations Plan

Crafting an operations plan for your short-term rental business ensures day-to-day processes run smoothly, regulatory compliance is maintained, and properties are expertly managed. Here’s how to streamline your operations for efficiency and guest satisfaction.

Day-to-Day Operations

What’s happening in your rental on a daily basis? From cleaning to quick maintenance fixes, it’s crucial to have a structured schedule. Here’s a snapshot:

• Check-ins/Check-outs: Coordinate timing and access to the property.
• Cleaning: Schedule professional cleaning services after each stay to maintain high standards .
• Maintenance : Address minor repairs promptly to avoid guest complaints and negative reviews.

By keeping on top of these daily tasks, you not only enhance guest experiences but also protect the value and longevity of your property.

Property Management

Have you ever wondered if hiring a property management company is worth it? Well, 75% of vacation rental owners who hire managers say it significantly reduces stress. Here’s when you should consider one:

• If You’re Remote: They can handle local operations while you’re miles away, especially relevant for vacation rental properties.
• Scaling Up: A management company can help manage the workload if you add properties.

Hiring professionals could also improve operational efficiency. They’re typically equipped to handle the full spectrum of services, from guest communication to emergency repairs.

Legal Requirements

Staying on the right side of the law is non-negotiable. Here’s the legal lowdown:

• Business License: Confirm whether your city requires a short-term rental license.
• Regulations: Stay updated on local zoning and housing regulations impacting short-term rentals.
• Insurance : Ensure you have insurance coverage tailored to short-term rental activity.

Remember, non-compliance can lead to hefty fines or even the shutting down of your rental. Take the time to understand your legal responsibili t ies and adhere to them meticulously. It’s much easier to comply upfront than to untangle legal troubles later on!

Financial Plan

When venturing into the short-term rental market, getting your financial plan just right is pivotal. You’ll want to focus on how you’ll make money, keep track of your earnings and expenditures, and explore various ways to fund your business, if necessary.

Revenue Model

Your Revenue Model is your game plan for making money. How much will you charge for each night’s stay? Your pricing strategy can make or break your business, so consider what you’re offering carefully. It’s not just about slapping on a price; it’s about understanding market rates, seasonal demand, and what extras you can provide to command a premium. To construct financial projections, you’ll want to consider the occupancy rates and average nightly prices. Perhaps you’ve heard the buzz about dynamic pricing tools? They can adjust your rates in real time based on market conditions.

Expenses and Cash Flow

Now, let’s talk about the money going out with Expenses and Cash Flow . In short-term rentals, you will have recurring costs like utilities, cleaning , maintenance, and maybe property management fees. Then there are the one-offs—think furniture and renovations. Getting familiar with your cash flow, which is the timing of when money enters and exits your bank account , is like knowing the steps to a dance. You’ve got to stay in rhythm to avoid stepping on the toes of your financial health. Prepare a monthly cash flow statement to monitor your financial movements closely.

Funding Options

Thinking about how to fuel your idea? Your Funding Options might include digging into your savings, using credit cards, applying for mortgages, or presenting your business plan to angel investors who are always looking for the next big thing. Investors want to see that your business model is potentially profitable before they leap with you. They’re like co-pilots in your short-term rental journey—pick the right ones, and you’ll be cruising at altitude in no time.

Location and Facilities

When launching your short-term rental venture, location is paramount. You’ve likely heard, “location, location, location,” and guess what? It’s not just a catchy phrase; it’s grounded in truth. You want your vacation home to be where people are clamoring to visit, right? But it’s not solely about proximity to hotspots or stunning views. Have you considered zoning regulations and the ease of attaining permits?

Once you secure a location that hits the sweet spot – accessible yet serene – you’re halfway there. Now, it’s about the nitty-gritty, like renovations . Consider the costs if you’re converting a property to a vacation home. Will you represent the local culture in your interior design, or are you all about that modern look?

Remember, every nail, paintbrush, and piece of furniture nudges your initial budget.

• Renovations: 25-30%
• Furniture & Fixtures: 20%
• Contingency: 10%

But let’s not forget the practicalities. We’re talking about being realistic with numbers – mortgage and rent aren’t just going to pay themselves. Crunch those numbers! Are you financially prepared for the off-season when the guests might be scarce?

• Peak Season: 85%
• Off-Season: 50%

To strengthen your rental game, ensure your facilities are up to scratch. Comfortable bedding, a well-equipped kitchen, and reliable Wi-Fi are not just amenities—they are expectations. Keep in mind exceptional facilities could bump up your nightly rate! That’s simple economics— supply and demand.

Creating a welcoming and comfortable environment for your guests will not only boost your ratings but could also justify a higher rental price. Keep your finger on the pulse of the market, because the success of your short-term rental business very much depends on how well you play the location and facilities game. Have you strategized yours yet?

Product and Service Line

As you venture into the short-term rental market, it’s vital to design your product and service offerings intricately. Your rental property isn’t just a space—it’s an experience for your guests. Let’s dive into what will set your vacation rental apart .

Property Offerings

What type of property can you offer to travelers? From cozy beachfront cottages to luxurious urban condos, your property types should align with both your brand and your target market. Identify and highlight unique selling points, such as location and property style. For example:

• Mountain Cabin : Prime mountain location, modern design.
• Waterfront Cottage : Direct beach access with sweeping lake views.

Amenities and Features

What will your guests rave about after their stay? Think of amenities as the ‘wow’ factor of your vacation rental business. This includes both standard offerings and those extras that make a stay memorable:

• Standard: Wi-Fi, air conditioning, clean linens.
• Extra: Hot tub, smart home devices, high-end espresso machine.

Incorporating dynamic pricing strategies can maximize occupancy rates and revenue. Keep an eye on market trends and adjust amenities to meet seasonal demands.

Additional Services

How can you enhance the guest experience beyond the stay? Offer services that add convenience and cater to the needs of your guests. Consider partnerships or third-party services to enrich your offering:

• Airport transfer services.
• Concierge services for booking local experiences.

By focusing on a robust portfolio of properties, exceptional amenities and features, and premier additional services, you’ll craft a winning formula for your rental property business that keeps guests coming back for more.

Booking and Reservation Management

Effective management of bookings and reservations is crucial for maintaining a smooth operation of your short-term rental venture. For hosts on platforms like Airbnb or VRBO, it’s about getting those booking notifications regularly, but also about setting clear guidelines to ensure guests know exactly what to expect.

Booking Channels

Airbnb and VRBO are your go-to spaces for tapping into a vast audience of potential guests. But hey, why stop there? You can maximize your visibility by listing your rental on multiple channels . Utilizing a channel manager can help keep your reservations synchronized across platforms, reducing the risk of double bookings.

• Direct bookings via your website: Have control and save on booking fees .
• Online Travel Agencies (OTAs) : Broad exposure, though they’ll take a slice of the pie in fees .
• Channel managers: Keep all your listings up to date in one place .

Remember, each channel comes with its own set of booking fees that will affect your pricing strategy. Airbnb, for example, may charge a host service fee around 3%, while VRBO swings between 8% to 10%.

Reservation Policies

Your reservation policies are the backbone of a predictable and reliable rental business. Let’s get those in shape!

• Cancellation policy : Offer options from flexible to strict to protect your interests while accommodating guests .
• House rules : Make them clear; no surprises for you or your guests.
• Check-in/out guidance : Precision ensures seamless guest transitions .

By being specific with your policies, you not only set the expectations but also foster trust. Imagine a scenario without any hiccups, where guests come and go like clockwork—isn’t that the dream?

It’s all about striking a balance between being welcoming and maintaining professional boundaries. Keep your policies consistent across all booking channels; this clarity will reduce confusion and potential conflicts.

Have you considered the “what-ifs”? Smart hosts always plan ahead. A well-thought-out reservation policy is akin to having an insurance policy for your rental business. Clear policies not simply guidelines—they are the rules by which your guests play, and they help to ensure that everyone plays fair.

Customer Service Philosophy

Have you ever wondered what makes a short-term rental stand out? Beyond location or amenities, the host’s commitment to exceptional customer service often earns those five-star guest reviews. Your unique selling points might attract customers, but excellent customer service ensures they return—or better yet, spread the word!

To establish a stellar reputation:

• Respond Promptly : Acknowledge inquiries and issues swiftly. Aim to reply within an hour, as studies indicate responsiveness is highly valued.
• Anticipate Needs : Proactively provide information guests may need, like Wi-Fi details or local recommendations , to create a seamless experience.
• Personalize Interactions : Greet your guests by name and tailor the service to their preferences. A personal connection can make all the difference.

Remember, every interaction is an opportunity to strengthen your business’s reputation. Handle complaints gracefully, always seeking a resolution that leaves your guest feeling heard and valued.

Here’s what you could include in your philosophy:

• Consistency is Key : Ensure every guest receives the same high level of service.
• Feedback is a Gift : Welcome reviews and use them to improve your offerings continuously.

Consider this: satisfied guests are the foundation of a successful rental business. By prioritizing their experience with exceptional customer service, you’re not just hosting guests, you’re building relationships that last. Isn’t that what you’d want as a guest, too?

Growth Plan and Milestones

Have you decided where your short-term rental business will be in the next year or five years? Your growth plan serves as your beacon, guiding your business journey. It’s where you illustrate how you plan to expand your reach and increase your bottom line.

First off, set clear milestones ; think of them as checkpoints. For instance, after 12 months, aim for a 10% increase in bookings or a 20% revenue hike from your current figures. These targets aren’t just numbers—they’re tangible markers of success that let you evaluate your business performance effectively.

Metrics are your best friends when tracking progress. Monitor occupancy rates, average daily rates (ADR), and guest satisfaction scores. These aren’t just indicators; they reveal the health of your rental and provide insights for adjustments.

Your strategic plan should include:

• Marketing Tactics : How will you reach new customers? Perhaps by leveraging social media ads or optimizing your listings with the right keywords for better SEO visibility.
• Operational Improvements : Can you implement smart home systems for self-check-in to boost guest convenience?
• Financial Management : Keep your finances in check. Use detailed cash flow projections to plan for maintenance costs, local taxes , and unexpected expenses.

Remember, it’s not just about drawing up a strategy; it’s about being willing to adapt. Stay informed about market trends and customer preferences. For example, what do current market analyses say about traveler behavior?

Stay on course, but don’t fear mid-course corrections to navigate your way to success. After all, staying flexible and responsive is key in the dynamic landscape of short-term rentals. Keep pushing towards those milestones, and watch as each small win helps your business flourish!

administrator

David Ciccarelli, is the Founder and CEO of Lake. He is based in Toronto, Canada, and is an expert in management, business administration, strategy, product development, and customer experience. His educational achievements include the Owner President Management Program at Harvard Business School (2019-2022) and the QuantumShift Program at Ivey Business School in 2017, aimed at CEOs of growing businesses.

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How To Start Your Own Short-Term Lettings Business

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7 key steps to start a short-term rental business in 2022

A short-term rental (STR) business offers property rented out on a nightly, weekly, or monthly basis. Depending on the location, guests may include leisure or business travelers or a combination of both. Since STRs are rented by the night, revenues can be higher than a long-term rental, but there is also more work involved.

In this article, we’ll discuss how investing in STRs could be a profitable business and cover 7 steps to starting an STR business from the ground up.

Key takeaways

• Factors such as location, dynamic pricing, and multichannel marketing can make an STR business more profitable.
• Key steps to creating an STR business include writing a business plan with specific and measurable goals, researching the best STR markets, and deciding on a property management strategy.
• Online platforms with STRs, traditional listing services, and networking are 3 ways to find STRs for sale.

Are STRs profitable?

In some of the best STR markets in the U.S., it currently takes just 14 days of occupancy (or less) each month to cover the mortgage payment, according to a report from Realtor.com on the best places to buy and cash in on the travel boom.

AirDNA, a company that specializes in STR analytics, notes that average revenue from STRs that were listed full time grew to $56,000 by the end of last year, the highest level ever. 

While STRs may generate extra rental income and offer advantageous tax benefits, self-managing an STR requires a lot of work. There also are extra expenses to consider, such as booking fees and higher maintenance costs, due to frequent guest turnover.

Things that may help increase the odds of having a profitable short-term rental include:

• Selecting the best location.
• Understanding the target market.
• Using a dynamic pricing strategy.
• Marketing to create a steady stream of guests.
• Monitoring financial performance.

How to start a short-term rental business in 7 steps

There are several key steps involved when starting an STR business. Let’s take a closer look at each.

1. Create a business plan

A written business plan for STR investments can help an investor stay focused on the end game. The plan should describe specific, realistic, and measurable short- and long-term goals, such as the reason for investing in an STR and monthly and annual revenue goals.

An STR business plan also should include a detailed analysis of the costs involved. In addition to a large down payment of 30% or more, STRs also have other costs that rentals occupied by long-term tenants don’t have, such as utilities, more frequent cleaning and repairs due to greater guest turnover, and keeping the STR fully furnished with the latest amenities.

2. Make the business legal

Regulations of STRs vary from place to place, and even by neighborhood homeowner associations (HOAs). Before purchasing an STR, it’s important to understand the rules. Airbnb has a list of general info about local regulations for most major cities in the U.S.

An owner of an STR also may be required to collect a lodging tax from guests and file a monthly tax return with the city and state the property is located in, along with obtaining a relevant business license. A local real estate attorney or property management company are good resources for learning more about local STR laws.

3. Find the best location

While STRs can be found virtually everywhere, some places are better than others. This article on the best STR markets compiles data from Lodgify, Mashvisor, and Realtor.com to find the best STR markets for 2022. 

Each of the 3 reports used different metrics when deciding what markets are “best,” such as cap rate, cash-on-cash return, and the number of rented days each month required to generate enough revenue to pay for the mortgage. 

Although researchers used different criteria, many of the best STR markets have small populations but a wide variety of amenities, year-round attractions, and are within a day’s drive of major metro areas, making many of the best markets perfect for a long weekend getaway.

The Roofstock STR Marketplace is a good resource to use to search for a property in popular locations. Listings may include an existing guest list and a record of historical financial performance. Buying a property that has been previously used as an STR can be a good way of jump-starting the STR business.

4. Select a management strategy

Some STR investors choose to manage a property themselves , while investors who own an STR in another state hire a professional property management company that specializes in STRs.

There are pros and cons to each STR property management strategy. Before making a decision, there are several issues investors may wish to consider, including:

• How will guest inquiries, booking confirmations, calendar updates, and guest arrivals be handled?
• Who will take care of quickly cleaning the STR, making any needed repairs, and restocking kitchen and bath items before the next guests arrive?
• Does an investor have a guest-centric, hospitality mindset to generate 5-star reviews, or is a local professional better suited to be a concierge?

5. Understand how pricing works

While long-term rental rates are generally adjusted once a year, nightly pricing for an STR may fluctuate from one week to the next, or even over different nights. Factors affecting STR pricing include seasonality, competition, length of stay, and even how many times a property has been viewed on a listing platform.

For example, an STR property focused on weekend getaways may offer a discounted rate during the week. On the other hand, investors with an STR frequented by business travelers might offer a weekend price reduction. To help maximize annual revenues from an STR, some investors look for longer-term renters during the low season to keep cash flow up.

6. List on booking sites

While there’s a growing demand from guests for STRs, there’s also a lot of competition. According to the 2022 STR forecast from AirDNA , demand is projected to increase by 14.1%, while listings are expected to grow by 15%.

In order to help generate a consistent booking flow, it’s important to remain competitive by listing on multiple channels. Some of the top short-term and vacation rental listing platforms to consider include:

• Booking.com
• TripAdvisor

Most short-term booking platforms use a ranking system based on host and guest reviews. To rank higher, many owners make it easy for guests to leave positive reviews by providing a template, offer a flexible cancellation policy, and provide outstanding amenities and service for a superior guest experience.

7. Choose a great software system

STR software systems can help owners schedule reservations, coordinate calendars across different booking platforms, manage maintenance and cleaning, and keep track of revenues. However, many services require a recurring subscription or collect a booking fee. For example, an all-in-one software solution such as Guesty generally collects a fee of between 2% and 5%, while pricing from Hostaway starts at $100 per month.

On the other hand, Stessa–a Roofstock company– is free to use for an STR business. After signing up for a free account and linking business and mortgage accounts, income and expenses can be automatically tracked for STRs. 

Investors who already own an STR can download transaction files from Airbnb, then upload the data to Stessa. Numerous financial reports, like income and cash-flow reports, can be generated in just one click, and free resources from the Stessa Tax Center make year-end reporting a breeze.

Where to find a short-term rental investments

Great ways to find an STR property to purchase include speaking with local property management companies, working with a local real estate agent, and using an online marketplace like Roofstock.

The Roofstock STR Marketplace has  properties listed for sale in popular U.S. markets, including Sun Belt hotspots like Kissimmee, FL; Orlando, FL; and Galveston, TX. 

Typically, listed homes are  furnished  and include a  history of financial performance. Instead of buying a home that’s never been rented before, investors can jump-start a vacation rental business with Roofstock.

Jeff has over 25 years of experience in all segments of the real estate industry including investing, brokerage, residential, commercial, and property management. While his real estate business runs on autopilot, he writes articles to help other investors grow and manage their real estate portfolios.

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Short-Term Rental Management in 2024: Will It Work for You?

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With the right strategies and tools in place, managing a short-term rental (STR) business offers fantastic potential, with the chance to grow your portfolio in an exciting, fast-developing area.

For example, according to a report by Transparent , STR management is expected to see a 97% increase in revenue in 2024, and property managers saw 79% growth last year.

However, any property-related business can feel like a risky move, and STR management carries with it a lot of responsibility. You might be wondering, “How am I going to manage everything from checking guests in to keeping housekeeping ticking over? Should I hire a rental management company to take care of it all?” 

In this article, we walk you through what you need to know, consider the pros and cons of using a property management company, and look at how you can use technology to manage STRs yourself. We cover:

• The advantages and disadvantages of being a short-term rental manager

How to get into STR management

• How to manage STRs yourself 

What is short-term rental management?  

STR management is the supervision of properties that are rented out for up to six months, though they’re usually booked for between a couple of nights and 30 days. This makes STRs perfect for vacation-seekers, business travelers, and remote workers, but it also makes managing them more work than managing long-term rentals.

As a property manager, you’ll have a range of responsibilities, including:

• Promoting your properties
• Managing property listings and bookings
• Organizing cleaning and maintenance 
• Handling check-ins and checkouts
• Communicating with guests
• Ensuring a fantastic guest experience
• Managing reviews

Advantages of being a short-term rental manager

Our recent report shows that the growth potential in the vacation rental industry is immense. And with few barriers to entry and the right modern tools, you can start capitalizing on this right away as you look to take advantage of the following benefits. 

Lots of flexibility 

With third-party property management companies and automation tools, you can be as involved or uninvolved as you like with short-term rental management. You may choose to just rent out your second home, for example, keeping it free for a few weeks in the year for your own vacation. Or you might want to invest in and manage a number of properties and maximize your returns.

High occupancy and rising demand 

Research shows that short-term rental occupancy levels in 2024 are forecast to remain higher than pre-pandemic levels at over 56%, reflecting the fact that demand in the US STR market is expected to grow by 5.5% year over year.

So, though rising inflation and a lack of international travelers has curtailed some of the growth in the industry, there’s a lot of optimism, with domestic consumers continuing to seek out travel opportunities.

Easy entry 

With just a small team and the right set of tools, you can set up a thriving short-term rental business. You can have your property available on the STR market in minutes simply by booking in a cleaner, taking some pictures, setting up an account on an OTA like Airbnb, and managing everything inside a great property management system. 

And if you’re moving from long-term property management into short-term, you’ll bring contacts and expertise that make it easy for you to manage the properties yourself. Got a broken boiler that needs fixing immediately before your next guests arrive? You’ll definitely have the number of a plumber!

Disadvantages of being a short-term rental manager

Managing a short-term rental comes with a unique set of challenges . From overseeing housekeeping schedules to maintaining streamlined communication with guests, it’s more hands-on than long-term rental management. Let’s take a closer look at how. 

Increased interaction with renters 

Checking guests in, sharing WiFi information, providing local recommendations—you take on all these tasks and more when you become a short-term rental manager. And though there are tools to streamline this (which we explore later), the key takeaway is that STR guests require a far more attentive service than long-term renters.

More complex to manage

When you’re managing a long-term rental, as much as you might not enjoy having to get in touch with the plumber or electrician, such inconveniences are usually rare and generally quickly dealt with. 

To manage a short-term rental business, though, you need at least one fantastic cleaner to handle turnovers between stays, and a reliable maintenance person to promptly fix any issues as they arise. You also need a solid way to create and schedule tasks to make sure everything is ready in time for each new stay.   

What’s more, your housekeeping and maintenance team will grow as you scale.   

Increased wear and tear 

Unlike long-term rentals which might be rented unfurnished, you’ll need to furnish and possibly renovate a short-term rental. Then, you’ll need to keep track of everything so you can replace your installations when they get worn down or broken… And with a high number of guests, this can happen a lot!

Increased risk 

As well as the day-to-day work being more intensive than long-term rental management, managing an STR carries with it more business risk. You have to deal with the off-season and general fluctuations in demand, when you may struggle to get bookings. And there’s also the local competition to wrestle with. 

So, pricing, marketing, and awareness of the relevant local regulations are all important and ongoing considerations.

But, as we’ll see, there are plenty of tools you can use to help you mitigate this risk and capitalize on the massive potential that exists alongside it.

To succeed with STR management, you need to develop repeatable, digitized processes you can use whether you have one guest or 10. The tips in this section will help whether you want to scale your business or if you just want to nail managing one property. 

Have a business plan

A business plan helps you create a roadmap for growth, attract financial support, and anticipate potential problems. It should set clear milestones that lead a clear pathway to realizing your business goals, and it should show your research and findings on areas like local regulations, target audience, and market opportunities.

You can use our vacation rental business plan template to see what a comprehensive plan might look like in practice. 

Optimize your nightly rates

Within your business plan, you’ll need to demonstrate your pricing strategy. There are different approaches to this, but ultimately you need to find the sweet spot between maximizing revenue while remaining competitive. 

As you can imagine, this is a challenging task with sudden surges and dips in demand, inflation, competitor pricing, and your own costs to factor in. 

So instead of attempting to undertake this task manually, you can use dynamic pricing tools to optimize and automate your pricing updates based on hundreds of data points. Here are the dynamic pricing tools you can integrate with Hostfully :

• NightPricer

Use technology  

Technology like dynamic pricing automates crucial areas of short-term rental management. This doesn’t just save you hours of work each week, it also eradicates human error and helps you provide the best possible service to your guests.  

Here are some other solutions you should consider using: 

• Channel management to get your property out to as wide an audience as possible 
• Direct booking sites that allow you to easily create a brand and generate more revenue from your bookings
• Centralized calendars so you can organize your team’s schedules alongside reservation information
• Task scheduling to simplify operations
• Guest messaging to help you manage guest concerns and queries 
• Digital guidebooks to provide guests with valuable information throughout their stay
• Accounting and finance tools so you can process payments, manage your payroll, and see reports
• Self check-in tech to increase guest independence 
• Smart home devices such as noise monitoring to provide you with greater remote control

Managing STRs yourself vs hiring a property management company 

Between messaging your guests and organizing your teams, managing short-term rentals is a full-time job unless you can delegate to others. Meanwhile, rental management firms can save you a lot of time, but they also take a big chunk of your profits. 

Here, we explore what you need to know about self-hosting vs using a rental management firm. 

Property management company services and fees explained

Property management companies can handle everything from marketing your properties to adding those special final touches like fresh flowers and toiletries. Management services include:

• Overseeing booking inquiries, reservations, and cancellations
• Rental price optimization
• Restocking supplies
• Arranging cleaning and maintenance staff
• Processing booking payments
• Managing check-ins and checkouts
• Writing guest reviews

This extensive workload comes with a hefty cost. You can expect to pay property management companies between 25-50% of your rent payments. 

Pros and cons of property management companies 

Aside from the upfront costs, there are several factors you need to consider when deciding whether to hire a property management company. Here are the pros and cons:

Being your own STR manager

By making use of vacation rental tech tools to oversee management, you can cut costs and retain control of your properties. You’ll decide exactly which type of guests you want to attract, automate your marketing processes to engage them, and then wow them with great communication and a frictionless guest experience.  

And, as we look at below, there are other tools you can use to reduce your workload, save on costs, and generate a sustainably strong return on your investment.

As well as avoiding property management service fees, you’ll have full control over your rates, what bookings you accept, and how to manage your revenue.

How to manage your short-term rentals with Hostfully

With Hostfully’s STR software, you can make every stage of short-term rental management easier. Having everything in one full-service platform means you’ll save time when managing guest communications, organizing your team, and managing your bookings. 

What’s more, you can stand out from the competition with an impressive, ready-made direct bookings site and digital guidebook. Plus, Hostfully integrates with all the tools you could need as you scale. 

Here’s a closer look at some of the tools and features you can implement:

Channel manager

• Done-for-you direct bookings site
• Booking lead manager
• Automated guest messaging
• Team organization
• Guest screening
• Dynamic pricing and payment processing integration
• Smart home device integrations  

You can reach more guests by promoting your property across several channels, but keeping your listings up to date is a lot of work. With a channel manager, you can edit details and pricing in one place and this will be reflected everywhere else. With the ability to make changes in real time, you’ll avoid double bookings too. 

Direct bookings site 

You can attract loyal guests with a pre-built, customizable direct booking website. With our templates, you can create a branded experience that converts new leads and encourages old guests to rebook.

Booking pipeline 

Inside the booking pipeline, you can see all information about past, current, and upcoming reservations. You can send email reminders to keep guests engaged before their stay or tell past guests about new features and offers. And Hostfully pulls data from your direct booking site, as well as listing sites such as Airbnb, Booking.com, and VRBO, to show you leads for future bookings too.  

Automated messaging 

Automated messaging allows you to engage with guests at every opportunity. With our message templates, you can streamline check-in, respond quickly to questions about WiFi and parking, and request reviews.   

And then within our unified inbox, you can see all your communications in one place and chat with guests via WhatsApp. Remember, responsiveness is an important metric used by OTAs like Airbnb to assess your quality of service. So using automation in this area doesn’t just save you hours of time, it also helps you rank highly in search engine results. 

Digital guidebook 

Integrate Hostfully’s digital guidebooks with short-term rental management software to increase guest independence. With everything from information about parking to local recommendations available in multiple languages, you can use a branded digital guidebook to answer your guests’ most commonly asked questions. 

When combined with smart locks, our digital guidebooks also facilitate self check-in. You can share a digital code or mobile key when your guests arrive and step back as they navigate their stay independently.

Centralized calendar 

Keep track of your bookings and occupancy, and organize your team within a centralized calendar. You can check availability, hold dates, create tasks, and make reservations all in one place. 

Integrations  

You can also integrate Hostfully with a range of other solutions to manage operations in one place. Some of the tools you should definitely check out include:

• Dynamic pricing to optimize your room rates based on the latest data
• Guest screening solutions to be sure your guests are who they say, and protect yourself against flagged guests
• Cleaning and turnover management to make coordinating housekeeping simple and stress-free

Future-proofing your short-term rental management strategy

Short-term rental management allows you to generate more revenue than long-term properties. But to capitalize on this, you need to be able to reduce your workload. Otherwise, between promoting your properties, replying to dozens of guest messages, and organizing cleaners, you could become overworked and stressed, and find it hard to grow your portfolio.

Property management companies are one way to reduce this workload, but if you hire a third party, you’ll have to give up some control over your properties and you’ll be faced with sizable management fees.

The other option is to automate your processes with property management software. A complete solution like Hostfully allows you to: 

• Manage bookings and listings across several channels
• Optimize marketing with a direct booking site
• Integrate with other solutions so you can manage everything in one place
• Organize your team with a centralized calendar
• Automate guest messaging to save time
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Everything You Need To Know About Short-Lets

• September 12, 2023
• Real Estate Trends

Table of Contents

Source: envato

Short-let properties have become an increasingly popular option among real estate investors who are looking for more flexible and dynamic income streams. Unlike long-term rentals, short-term rentals offer a range of benefits that can help investors maximize their profits and minimize their risks.

Ideally, short-lets allow investors to adjust rental rates based on market demand, giving them the flexibility to adapt to changing conditions and capitalize on high-demand periods. Additionally, short-term rentals typically require less maintenance and upkeep than long-term rentals, which can save investors money on repairs and renovations.

If you’re new to real estate investing and want to get started with a low-risk, high-reward opportunity, investing in a short-term rental could be a smart move. By choosing the right property and understanding real estate market trends, you can build a lucrative real estate portfolio that provides consistent returns over time.

What Is a Short-Let?

A short-let is a type of rental agreement that usually lasts for days, weeks, or months, depending on the agreement between both parties.

Short-let apartments are a popular type of accommodation in Nigeria, especially in major cities such as Abuja and Lagos, Nigeria. They offer cheaper alternatives and flexible rental terms, allowing tenants to stay for shorter periods of time compared to traditional long-term leases. Short-lets are suitable for a wide range of people, including travelers as an alternative to hotel accommodation, expatriates, students, and people relocating to a new area.

In addition to their flexibility, short-let apartments are also fully furnished and equipped with modern amenities, including air conditioning, Wi-Fi, and cable television. They offer a comfortable and convenient living space for tenants, eliminating the need to purchase furniture and appliances or set up utilities. Overall, short-term apartments provide a practical and cost-effective housing solution for people in need of temporary accommodation.

Benefits of Investing in a Short Let

Investing in a short-term rental property can be an exciting opportunity with great potential. It may seem daunting at first, but the numerous benefits make it an incredibly attractive option for generating additional income. 

Some of the key benefits of short-term rental investing include:

Flexibility

When it comes to investing in a short-term rental, one of the most significant advantages is the flexibility it offers. As an investor, you have the freedom to adjust the rental rates based on market conditions and demand. Plus, with shorter rental periods, you can easily move tenants in and out of the property as needed without having to worry about long-term commitments. It’s a great way to stay on top of market changes and adapt to the needs of your tenants, while also keeping your investment profitable.

Higher Rental Yields

Short-lets can be a great way to earn more rental income compared to long-term leases. Since short-lets are designed for people who need temporary accommodation, they often command higher rental rates, which means more money in your pocket as an investor. Plus, you can also enjoy the benefits of capital appreciation over time, as property values tend to increase in the long run. Overall, it’s a smart way to invest your money and earn higher returns without having to commit to long-term rentals.

Tax Benefits

Another great advantage of investing in a short-term rental is that it can provide tax benefits for landlords. Since short-lets usually have shorter and more regular rental periods, it can help maximize tax deductions and reduce taxable profits. This is especially helpful for businesses and individuals who want to make a profit from their investment properties while minimizing their tax burden. 

So not only are you earning more money from your investment, but you’re also keeping more of it in your pocket. It’s a win-win situation for any savvy investor looking to maximize their profits.

Reduced Damages

Equally important about short-term rentals is that they tend to have less wear and tear on the property compared to long-term rentals. Since short-term tenants usually stay for a shorter period, they are more likely to take better care of the property, which means less potential damage to worry about. This is because short-term tenants are usually more conscious of the condition of the property and understand that they are only staying for a short while. 

You see, not only do you save money on repairs and maintenance, but you also have peace of mind knowing that your property is being taken care of by responsible tenants. It’s just another reason why short-lets can be a smart choice for any investor looking to earn higher returns with less hassle.

Steady Cash Flow

Another great thing about short-lets is that you can enjoy maximum occupancy rates without the hassle of lengthy marketing processes. Since new guests book almost immediately after one group leaves, you can keep your property fully occupied with little to no downtime in between stays. This means more rental income for you as an investor! Plus, during peak seasons when there is limited availability, you have the potential to charge premium prices and earn even more money from your investment. 

So not only is short-term investing convenient and flexible, but it’s also a great way to maximize your earning potential. It’s a no-brainer for any savvy investor looking to make the most out of their investment property.

Safe Deposit

Last but not least, short-lets give you an added layer of protection when using popular online platforms like Airbnb and HomeAway. You can safeguard your investment by taking advantage of the resolution services offered by these platforms, which can help you resolve any disputes with tenants and protect your deposit. 

This means less stress and more peace of mind for you as an investor, all of these benefits show how investing in short-lets makes economic sense and has the potential to provide you with fantastic financial rewards. 

How To Maximize Returns From Short Lettings

In considering investment in short-term rental properties for their income potential, here are some tips on how to maximize returns:

Set Competitive Rates

When setting your rental rates, it’s essential to be competitive and keep an eye on market conditions. Research rental rates in your area before deciding how much to charge for your property.

Market the Property

Advertise your short-let online through websites such as Airbnb or Booking.com for maximum exposure. You can also approach real estate agents and list your property on multiple sites.

Create an Attractive Living Space

Be sure to furnish your property with quality furniture and amenities that will make it appealing to potential tenants. This can help you attract more people and command higher rental rates for the property.

Advantages of a Short-let Apartment to Tenants

Source: Pexel

Short-let apartments are becoming increasingly popular as a flexible and affordable housing solution. Now, let’s explore the advantages of short-let apartments for tenants looking for temporary accommodation, which in turn fuels rich investments. 

Short-let apartments have a major advantage over traditional hotel rooms: they can save users a significant amount of money. Renting a basic hotel room for an extended period can quickly become expensive, whereas renting a short-term apartment can be a more cost-effective option with an effective payment plan. 

You can also save money by preparing meals with food items purchased at the local corner store or supermarket since all required amenities can be found in short-term apartments.

Privacy and Safety

The privacy offered by a short-let apartment is unmatched. You can make yourself at home without feeling like you are intruding on another’s space, as is the case with shared accommodation.

Also, when staying in a short-term apartment, you can be sure that your belongings and valuables are safe and secure. Short-let apartments offer enhanced privacy, allowing tenants to relax and enjoy their stay.

Tenants will also find parking easier and more accessible in an apartment than in a hotel. This can be attractive for people who have cars and will benefit from easy access to parking.

Greater Freedom

In a hotel, you usually get little opportunity to customize your living space, whereas with a short-term apartment, you will have more freedom to personalize the furnishings, decorations, and layout according to your needs.

Short-term apartments confer greater flexibility, allowing those who typically stay in one location for a shorter time or whose plans are uncertain about moving to do so more easily and quickly.

Depending on your needs and budget, you can stay for just one night or as long as you like. This makes it an ideal option if you’re looking for temporary accommodation between jobs, business trips, house sitting, or traveling.

Service Availability

Also, short-term lets offer tenants access to exclusive services such as free WiFi and gym and pool access in specific locations that may not otherwise be available.

By staying in a fully furnished apartment ready for occupancy, tenants can save the time associated with finding fitting furniture when moving into a new area.

Family Stay Together

Finally, families traveling together will appreciate being able to stay together in one location rather than having to rent multiple hotel rooms. It’s like being at home, just in another part of town.

These advantages make finding the perfect short-let apartment an attractive option for any potential tenant.

Finding Short-Let Property in Your Area of Choice as an Investor 

There are several factors to consider when finding a short-let property in your area of choice, which include:

Location is critical for any real estate investment, and the same applies to short lets. Looking for a property in an area with high demand and a low vacancy rate is essential since this will ensure you have a steady stream of tenants.

Property Type

When choosing your short-let investment property, it’s essential to consider the type of property and what amenities it offers.

For example, if you’re looking for a short-let in a city center, then apartments are preferable since they are more affordable than houses. On the other hand, houses may provide higher rental yields if you invest in rural areas.

Legal Requirements

It’s essential to be aware of the legal requirements that come with short-term rentals. You should check with your local authority or appropriate governing body for any licensing and zoning regulations before investing in a property to ensure you are compliant.

These tips can help you find the perfect short-let property in your area of choice.

Factors To Consider When Finding a Short Let Property for You and Your Family

Finding the right short-let property in your area of choice at the right price can be challenging. However, with careful consideration, you can find a tremendous short-term rental that fits your needs.

Apartment Type

It is essential to consider where you would like to stay and what type of accommodation suits you best. Short lets tend to vary in size, amenities, and price, so deciding what is most suitable for you before beginning the search process is important.

You can research your area’s market, correct prices, and occupancy info and compare them with your budget. Make sure to consider any extra costs, such as deposits, cleaning fees, and taxes, to ensure that you stay within your budget.

It would help if you also looked for properties in high-demand areas such as city centers, tourist attractions, or business hubs. This will increase the chances of finding a tenant quickly and reduce vacancy rates.

Online Platform

Finally, take advantage of online platforms such as Airbnb and HomeAway , which offer a variety of short-term apartments for rent in various locations. You can also use these platforms to compare prices, check ratings and reviews from other guests, and contact the host if you have any queries.

Expectations When Moving Into a Short-Let Property

Source: pexels

When moving into a short-let property, tenants should expect to find fully furnished and well-equipped living spaces. 

This typically includes items such as couches and chairs, beds and mattresses, tables and desks, kitchen appliances such as refrigerators and ovens, utensils for cooking, flat-screen televisions for entertainment purposes, bathroom equipment such as showers, and other essential amenities like washing machines and vacuums.

Tenants should also expect access to internet services and utilities such as water, electricity, and gas in most short-let properties. Depending on the property’s location, tenants can take advantage of additional amenities like a swimming pool or gym.

Finally, tenants should feel comfortable knowing they can contact the host or property manager if they have questions or need help during their stay, as attentive service is guaranteed. This ensures a smooth and enjoyable stay at the short-let property while you enjoy complete peace.

How To Get Started On Your Search for the Perfect Short Let Property

Now that you know what to expect and the advantages of investing in a short-let property, it’s time to start your search.

Firstly, research the local rental market and determine what types of properties are in demand in the area. This will help you decide on a suitable price range for your property.

Next, consider using online platforms such as Airbnb and HomeAway to find potential tenants. These sites provide access to a wide range of properties in various locations worldwide, making it easy to search for the perfect short-let property for your needs.

You can also use these websites to compare rental rates, read reviews from other guests, and contact hosts directly if you have any queries.

Finally, read through all the terms and conditions before agreeing to anything when signing a rental agreement. This will help ensure that both parties know their rights and obligations during the tenancy period. By following these steps, you can be sure to find the perfect short-let property that suits your needs.

Frequently Asked Questions

Short-lets provide an alternative to hotel accommodations. They are typically fully equipped apartments, including a kitchen and living area, and offer short-term leases of 1–12 months. 

Nigerian short-let apartments generally offer a range of facilities, such as air conditioning, Wi-Fi, cable TV, 24-hour security, housekeeping, fridge space, and laundry services. Short-let apartments are also commonly furnished and include kitchen appliances and utensils. Some short-let apartments may additionally offer on-site amenities, such as a gym, swimming pool, and parking space.  With various sizes and locations available, short-let apartments in Nigeria can provide a flexible and comfortable housing solution suitable for different types of tenants, including tourists, business travelers, expatriates, leisure people, and families.

Most short-let properties require a minimum stay of around seven days. However, this can vary depending on the provider and property. It is essential to check with the landlord or company before booking.

Popular short-let locations in Lagos include Freedom Park, the National Museum, Central Lagos, and the Lagos Mainland. Other popular locations include Lekki Phase 1, Victoria Island, Unity House Short Lets, House in Hardware, House of Haze, and House Owners.

Investing in Nigerian short-lets can provide several advantages for investors, including higher returns on investment compared to traditional real estate investments and long-term rentals.  Short-lets can also generate more rental income, particularly during peak travel seasons, and can be rented out for higher nightly rates than traditional hotel rooms.  Moreover, investing in short-let apartments in Nigeria can offer more flexibility, as they can be managed by a third-party management company or operated by the investor themselves. Additionally, short-lets can be a good option for diversifying an investor’s portfolio and can provide a steady stream of income with the potential for capital appreciation over time.  

Investing in a short-term rental property can be an excellent way to earn extra income and provide tenants with a great living experience. Numerous advantages come with investing in a short-let property, such as greater flexibility, higher rental yields, a good career option, and more.

However, it’s essential to remember that it requires careful research and consideration before investing to ensure you make the right choice. Therefore, if you are looking for a great return on investment, why not consider investing in a short-let property today?

The key is to consider all the factors carefully before taking the plunge. With the correct information and guidance, you will find the perfect short-term rental property that suits your needs.

Start your search now, and you can thank us later!

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How to start and operate an apartment rental business

The United States apartment rental industry is booming! The market size of this specific type has grown 1% per year on average between 2017 and 2022. By 2023, it’s projected that revenue will reach $229 billion- which means there are plenty more opportunities for those looking to get into the rental property business or buy their first investment property unit as well!!

So, if you’re looking for a new business idea , consider starting an apartment rental business. This is a great opportunity to enter the housing market, and there are several things you need to do to get started. This article will discuss the basics of starting and operating an apartment rental business. We’ll also cover important topics such as licensing and insurance. So if you’re ready to get started, keep reading!

Before buying or leasing a property, it’s important to do your due diligence. This will help you map out the important steps you need to take to get your business up and running. It will also give you an idea of what expenses you’ll need to cover and how much revenue you can expect to generate.

• Understand what you’re getting into- The first step is to understand the ins and outs of the apartment rental industry. This includes learning about the cap rate, NOI (net operating income), and other key financial concepts that will be important when making investment decisions.
• Research the local market and find out what people are looking for in an apartment.
• It’s also important to inspect the property thoroughly before making any decisions. This includes checking for potential damage, such as water leaks or mold.
• It’s also a good idea to have a professional appraiser inspect the property to determine its value. This will help you set a fair price for rent and avoid overpaying for a property.
• When you are expanding your business, you might need to find suitable office space. This can be challenging, especially if you’re on a tight budget. But it’s important to have a dedicated space for your business, even if it’s just a small office or studio apartment.
• You’ll also need to factor in mortgage payments if you plan to buy a property. And if you’re renting, you’ll need to budget for utilities and property taxes .
• Finally, you’ll need to set aside money for marketing and advertising. This is important to get the word out about your business and attract potential customers.

A business plan covering all of these aspects will help you get started on the right foot.

Decide if you want to be a property manager or an owner

One of the first things you need to decide when starting an apartment rental business is whether you want to be a property manager or an owner. Each option has pros and cons, so it’s important to weigh your options carefully before making a decision.

• If you decide to manage your rental property yourself, you will be responsible for finding and screening tenants, collecting rent, handling maintenance and repair issues, and dealing with problem tenants. This can be a lot of work, but it can also be very rewarding because you will save the money that a manager can charge you for these tasks.
• If you decide to be just the owner, you need to hire a property management company to take care of all operating tasks. You have to dedicate a portion of your monthly income to the managing company, but this also means you would have a lot of time to spend on market research, buying more rental units, and expanding your business.

So, which option is right for you? Of course, only you can decide that. But, whichever option you choose, there are some things you need to keep in mind to be successful.

Establish a good relationship with your local mortgage lender

As an apartment rental business owner, you’ll need to establish a good relationship with your local mortgage lender. This is important because you’ll need financing for your rental properties. A good relationship with your lender will help you get the best interest rates and terms for your loans.

It’s also important to have a good relationship with your lender because you’ll need to be able to refinance your properties when necessary. For example, if you’re trying to buy a new property but don’t have enough cash, you may need to refinance one of your existing properties to get the cash you need.

Get to know your local real estate market.

As a real estate investor, getting to know your local real estate market is important. This will help you find the right properties to purchase. In addition, you’ll need to know about things like median rental prices, vacancy rates, and other factors that affect the demand for rentals in your area.

You can learn about your local real estate market by reading articles, talking to other landlords and property managers, and attending local real estate events. In addition, a trusted real estate agent can give you the upper hand as you start to look for properties.

Register your business

You need to register your business with the state. This is typically done through the Secretary of State’s office. You will need to fill out a form and pay a filing fee. The form will ask for basic information about your business, such as the business name, address, and contact information. You will also need to provide a description of the business.

After your business is registered, you will need to get a business license.

Get a residential license.

In addition to registering your business with the state, you will also need to obtain a business license from the city or county where your business is located. The process for obtaining a business license varies from one location to another, but it typically involves filling out an application and paying a fee.

If you plan to have apartments in more than one city or county, you will need to obtain a business license for each one.

Check with your local zoning laws.

Before renting out apartments, you must ensure that doing so is allowed in your area. Zoning laws vary from location to location, and some areas do not allow businesses to operate in residential areas.

If you’re unsure whether or not you are allowed to rent out apartments in your area, you can check with your local zoning office. They will be able to tell you what the laws are and whether or not you need to obtain a special permit to do business.

Get insurance

Another important thing to do when you start an apartment rental business is to get insurance . This will protect you in case something happens to your property or if one of your tenants gets hurt while on the premises.

There are a few different types of insurance you can get for your business, so you’ll need to talk to an insurance agent to figure out which kind is right for you.

Find the right property.

Of course, you will also need to find a property you can rent. There are a few different ways to go about this. You can either buy an already existing apartment or convert single-family homes into apartment complexes.

If you decide to buy an existing apartment building, you will need to ensure that it is up to code and meets all the necessary safety requirements.

You will also need to ensure that the building is in a good location and reasonably priced. It’s fine to buy apartments in big rental buildings, but you don’t want to compete with corporate housing complexes.

If you decide to convert a residential property into an apartment complex, you will need to make sure that the property is zoned for commercial property. You will also need the necessary permits and approval from the city or county.

Market your business

Once you have everything set up, you will need to market your business. There are a few different ways to do this. You can put up signs in the area, hand out flyers, or take out ads in the local newspapers. You can also list your business in online directories or on classified websites.

A professional approach to a good marketing strategy is by knowing your market. Do your research to see who are your potential customers.

Are you more interested in long-term tenants with fewer challenges, or would you like to attract short-term renters willing to pay more like business travelers?

Negotiate and sign leases with tenants

The first step in starting your own apartment rental business is to find tenants. You’ll need to negotiate and sign leases with them, which will outline the terms of their rental agreement. Be sure to review the lease carefully before signing it, as it will be binding on both parties.

If you already have a tenant, it’s always better to negotiate a rate increase with your tenants before looking for new ones. This is because it’s easier and cheaper than finding a replacement tenant while also avoiding the high cost of turnover that comes from having many empty apartments or rooms on your property at any given time.

You can use a few tricks to get your tenants into negotiating and signing new leases. First, make sure the rent is fair for both parties. So it doesn’t matter if you’re renewing or starting with someone new; chances are that once they’ve seen what kind of place this truly was in terms of location and amenities, then negotiations will start happening on behalf of all involved! You should also remember not only how important good communication is between oneself as well other involved parties such as cleaners/handlers etc., but especially during talks surrounding any sort of agreement like an increase from $500-$550 per month ($10 extra), because sometimes these little things add up quickly if not kept in mind throughout the entirety of the conversation!

Maintain the property and handle repairs/maintenance as needed

When you start and operate an apartment rental business, you need to maintain the property and handle repairs/maintenance as needed. This includes regularly scheduled cleaning and upkeep, as well as responding to tenant requests for repairs promptly. You also need to be prepared for larger-scale projects like repainting the exterior or repairing the roof, as well as any emergency repairs that may come up. If you need some temporary staging furniture , look for your local staging rental company . This way, you don’t need to buy expensive items that you just need for a short-term tenant.

Having a good relationship with a local maintenance company can be helpful, as they can often provide discounts for regular work. You should also have a budget set aside each month for unexpected repairs. By being proactive about maintaining your property, you can avoid costly surprises down the road.

Collect payments and provide customer service

When you own an apartment complex, you are responsible for collecting the rent. This can be done in person, by mail, or online.

But if your place is maintained by a property management company (Or individual manager), you don’t need to be worried about collecting the fees. The company will take payments and deposit them into your account. You can also set up an automatic payment system, where the money is withdrawn from the tenant’s bank account and deposited into yours on a certain day each month.

How to manage your finances and keep track of expenses

Starting an apartment rental business can be a great way to earn extra income, but it’s important to keep track of your cash flow and finances. Here are some tips for managing your finances and keeping track of expenses:

• Create a budget for your apartment rental business. This will help you track your rental income and expenses to see where your money is going.
• Keep track of all of your expenses, including rent, utilities, advertising, and repairs. This will help you keep tabs on how much money you’re spending each month.
• Make sure to set aside money for taxes. You’ll need to pay taxes on your income, so it’s important to save up for this. Talk to your accountant about tax deduction opportunities.
• Keep track of your tenant’s payments and security deposits. This will help you stay organized and ensure that you’re getting paid on time.
• Have a separate bank account for your apartment rental business. This will help you keep track of your finances and avoid mixing personal and business expenses.
• It’s also important to save a portion of your income in an emergency fund in case repairs are needed, you have to evict a tenant, or you are just facing an economic downturn.
• If you have a large inventory, then property rental management software makes your life easier.

Evict tenants who are not following the lease agreement

If your tenant is not following the terms of their lease agreement, you may need to evict them from your property. The eviction process can be complicated, so it’s important to understand your state’s laws and procedures before taking action. First, talk to your lawyer to know the general rules and explore the best ways to tackle this problem.

If you decide to proceed with an eviction, you’ll need to serve your tenant with a notice of eviction. This notice will state the reason for the eviction and give your tenant a specific amount of time to remedy the issue or move out of the property. If your tenant does not correct the issue or move out within the specified time frame, you can file for eviction with your local court.

Once you’ve filed for an eviction, the court will set a hearing date. At the hearing, both you and your tenant will have the opportunity to present your case. If the judge rules in your favor, they will issue an eviction order. This order will give your tenant a specific amount of time to vacate the property.

If your tenant still does not vacate the property after the eviction order has been issued, you can hire a professional to physically remove them from the premises. This process should only be used as a last resort, as it can be costly and time-consuming.

The eviction process can be complicated, so it’s important to understand your state’s laws and procedures before taking any action.

Legal considerations when running an apartment rental business

As a business owner, it’s important to be aware of the legal considerations when running an apartment rental business. Here are some things to keep in mind:

Zoning laws: Make sure you are familiar with the zoning laws in your area and obtain the proper permits before starting your business.

Fair housing laws: Be familiar with federal, state, and local fair housing laws. This includes understanding what types of discrimination are prohibited.

Lease agreements: Make sure you have well-written agreements that protect both you and your customers. Be clear about expectations, rules, and regulations.

Safety: Take measures to ensure the safety of your tenants. This includes things like maintaining the property in a safe and clean condition, having adequate lighting, and providing security features like deadbolts and security cameras.

Insurance: Make sure you have the proper insurance coverage for your business. This includes liability insurance in case someone is injured on your property.

Always keep yourself updated about new rules and regulations that may affect your business. By doing so, you can avoid any legal problems down the road.

Tips for maintaining a good relationship with your tenants

When you’re a landlord, it’s important to maintain good relationships with your tenants. After all, they are the ones who are renting your units and keeping your business running.

1. Be responsive to their needs.

Tenants want to know that their landlord is responsive to their needs. If they have a problem with their unit, they want to know that you’ll be there to fix it in a timely manner. If you’re not responsive, they will start to feel like they’re not a priority and may look for another place to live.

2. Be fair.

They want to know that they’re being treated fairly. If you’re constantly changing the rules or increasing rent without notice, they will feel like they’re being taken advantage of. As the apartment owner, it’s important to be consistent and transparent with your tenants to maintain a good relationship.

3. Communicate often.

Tenants want to know what’s going on with their rental property. If there are any changes or repairs that need to be made, they should be the first to know. Keeping them in the loop will help them feel like they’re a part of the decision-making process and not just an afterthought.

4. Be understanding.

Tenants are human beings, and things happen. If a tenant is late on a payment or needs to break their lease, try to be understanding. Work with them to find a solution that works for both of you. Showing them that you’re willing to work with them will go a long way in maintaining a good relationship.

5. Be available.

Tenants should be able to reach you when they need to. If you’re constantly unavailable or hard to get ahold of, they will start to feel like you don’t care about their needs. Make sure you’re accessible and easy to reach when someone needs you.

Following these tips will help you maintain a good relationship with your tenants. Remember, happy customers, are crucial to a successful rental business .

Running an apartment rental business can be a great way to earn some passive income and provide housing for people in your community. However, there are a few legal considerations to keep in mind. Be sure to familiarize yourself with zoning laws, fair housing laws, and lease agreements. You should also take measures to ensure the safety of your tenants and have adequate insurance coverage. By following these tips, you can avoid any legal problems and maintain a good relationship with your tenants.

Do you have any other tips for running an apartment rental business? Share your thoughts. Send us a message, and we will try to answer your concerns as soon as possible.

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Home » Sample Business Plans » Real Estate

How to Write a Rental Property Business Plan (Sample Template)

Are you about starting a rental property business? If YES, here is a complete sample rental property business plan template & feasibility report you can use for FREE . The Apartment Rental industry is a very vast industry and there are loads of businesses opening up in the industry. There are several business opportunities an aspiring entrepreneur who has good capital base can start and one of such opportunities is a rental property business.

If you want to start a rental property business, then you need to write your own business plan. The essence of writing a business plan before starting any business is for you to have a blueprint of how you want to setup, manage and expand your business. Below is a sample rental property company business plan template that will help you to successfully write yours with little or no stress.

A Sample Rental Property Business Plan Template 

1. industry overview.

Rental property business is grouped under the Apartment Rental industry and this industry is made up of companies that rent one-unit structures, two- to four-unit structures, five- to nine-unit structures, 10- to 19-unit structures, 20- to 49-unit structures and 50- or more unit structures.

In the united states, states such as Texas, New York, and Colorado, make it mandatory for rental property companies to be licensed real estate brokers if they are going to be involved in collecting rent, listing properties for rent, helping to negotiate leases and doing inspections as required by their business.

Although a property manager may be a licensed real estate salesperson but generally, they must be working under a licensed real estate broker. A few states such as Idaho, Maine, and Vermont do not require property managers to have real estate licenses.

Other states such as Montana, Oregon, and South Carolina, allow property managers to work under a property management license rather than a broker’s license. Washington State requires property rental companies to have a State Real Estate License if they do not own the property.

Landlords who manage their own property are not required by the law to have a real estate license in many states; however, they must at least have a business license to rent out their own home. It’s only landlords who do not live close to the rental property that may be required, by local government, to hire the services of a property management company.

Statistics has it that in the United States of America alone, there are about 518,271 licensed and registered apartment rental companies scattered all across the country and they are responsible for employing about 769,588 employees.

The industry rakes in a whooping sum of $154 billion annually with an annual growth rate projected at 2.4 percent within 2013 and 2018. Please note that the Apartment Rental industry has no companies with major market shares in the United States of America.

A recent research conducted by IBISWorld shows that operators in the Apartment Rental industry have performed strongly over the five years to 2018; however, industry performance softened in 2017 and 2018 as vacancy increased in those years.

Since the subprime mortgage crisis, the industry has undergone structural change. Leading up to the crisis, most investment in real estate was carried out by institutional investors (those who own 10 properties or more), whereas today, most properties for rent are single-investor owned and nonowner occupied.

Historic lows in homeownership, decreasing rental vacancy rates and surging demand for rental units have enabled landlords to increase rents, aiding revenue growth. Therefore, IBISWorld expects industry revenue to climb at an annualized 2.4 percent to $153.9 billion. In the same timeframe, the number of businesses has grown by 0.5% and the number of employees has grown by 0.4 percent.

No doubt, if an entrepreneur who intends starting his or her own property rental business has the right connections, networks, managerial skills, and takes delight in managing real estate for clients, then he or she is going to find property rental business very rewarding and lucrative.

2. Executive Summary

John Johnson & Co® Property Rental Agency, LLP is a real estate agency that will operate in all the West Coast of the United States of America but will be headquartered in San Diego – California. We intend to become specialists in owning, developing, acquiring, managing, selling and renting/leasing and disposing student accommodation, residential apartments, office apartments and hall facilities et al.

This can generally be summed up as clean, safe accommodation at an affordable price, and in our experience, the most consistent demand is for newly-built and pre-owned one and two-bedroom sectional title apartments with high tech security, parking and good access to shops and other amenities.

Part of our goal as a rental property company is to grow to become one of the top 5 largest real estate companies in the whole of West Coast in the United States of America and to rent/lease and manage properties across major cities in this region.

John Johnson & Co® Property Rental Agency, LLP will be committed when it comes to maintaining a diverse portfolio of quality apartments, office structures and hall facilities. We will also focus on providing a dynamic, proactive and vibrant work environment for all our employees such as mouthwatering bonus (commission) for every deal that comes through any of the staff member.

John Johnson & Co® Property Rental Agency, LLP is going to be a self-administered and a self-managed real estate investment trust (REIT). We will work towards becoming one of the largest rental property companies in The United States of America with active presence in major cities all across the West Coast in the United States of America.

As part of our plans to make our customers our number one priority and to become one of the leading rental property companies in the United States of America, we have perfected plans to adopt international best practices that can favorable compete with the best in the industry. John Johnson & Co® Property Rental Agency, LLP have overtime perfected plans that will help us to become a specialist in our area of business.

John Johnson & Co® Property Rental Agency, LLP will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.

John Johnson & Co® Property Rental Agency, LLP is founded by John Johnson, Carson Reeves and Lance Taylor. John Johnson is the company’s president and CEO. John Johnson has over 15 years’ real estate experience in significant senior management positions in the areas of sales, marketing and new technologies in the United States of America.

3. Our Products and Services

John Johnson & Co® Property Rental Agency, LLP is going to offer varieties of services within the scope of the Apartment Rental industry. We are prepared to make profits from the industry and we will do all that is permitted by the law in The United States of America to achieve our business goals, aim and ambition.

Our business offerings are listed below;

• Rental of one-unit accommodation structures
• Rental of two- to four-unit accommodation structures
• Rental of five- to nine-unit accommodation structures
• Rental of 10- to 19-unit accommodation structures
• Rental of 20- to 49-unit accommodation structures
• Rental of 50- or more unit accommodation structures
• Rental of manufactured homes, mobile homes or trailers
• Real estate consultancy and advisory services

4. Our Mission and Vision Statement

• Our vision is to become one of the top 5 rental property companies in the West Coast of the United States within the first 10 years of starting John Johnson & Co® Property Rental Agency, LLP.
• Our mission of starting a rental property business is to grow the business beyond the city where we are going to be operating from to become a national and international brand by opening offices all across key cities in West Coast of the United States of America.

Our Business Structure

Our company’s structure is not entirely different from what is obtainable in the Apartment Rental industry. We have decided to create a structure that will allow for easy growth for all our employees and also, we have created platforms that will enable us attract some of the best hands in the industry.

We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target.

John Johnson & Co® Property Rental Agency, LLP is fully aware of the modus operandi in the rental property business, hence adequate provision and competitive packages has been prepared for independent real estate agents. Our marketing department will be responsible for managing this aspect of our business structure.

Below is the business structure we will build John Johnson & Co® Property Rental Agency, LLP on;

• Chief Executive Officer
• Company’s Lawyer/Secretary

Admin and HR Manager

Real Estate Agents

• Business Developer/Sales and Marketing
• Customer Service Executive/Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Officer – CEO (President):

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Accountable for fixing prices and signing business deals
• Responsible for providing direction for the business
• Accountable for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Company’s Lawyer/Secretary/Legal Counsel

• Responsible for drawing up contracts and other legal documents for the company
• Consults and handles all corporate legal processes (e.g. intellectual property, mergers & acquisitions, financial / securities offerings, compliance issues, transactions, agreements, lawsuits and patents et al)
• Develops company policy and position on legal issues
• Researches, anticipates and guards company against legal risks
• Represents company in legal proceedings (administrative boards, court trials et al)
• Plays a part in business deals negotiation and takes minutes of meetings
• Responsible for analyzing legal documents on behalf of the company
• Prepares annual reports for the company
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carries out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities.
• In charge of leasing and renting out accommodations and other properties under our to-let list
• In charge of inspecting and reporting on the structural attributes of a building
• Assesses compliance with building, electrical, plumbing and fire codes
• Evaluates building plans and permits
• Keeps daily logs, including photographs taken during inspection
• Handles real estate consultancy and advisory services

Marketing and Sales Executive/Business Developer

• Identifies, prioritized, and reach out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts
• Responsible for supervising implementation, advocate for the customer’s need , and communicate with clients
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managers with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Front Desk/Customer’s Service Officer

• Receives Visitors/clients on behalf of the organization
• Receives parcels/documents for the company
• Handles enquiries via e-mail and phone calls for the organization
• Distributes mails in the organization
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the line manager in an effective and timely manner
• Consistently stays abreast of any new information on the company’s properties that are put up for sale, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries

6. SWOT Analysis

Starting a rental property business in the United States of America comes with its own fair share of challenges, you would have to abide by the law and also compete with other entrepreneurs in the business value chain who also are interested in making a living and building a business in San Diego, California.

In order to compete favorably in the rental property line of business we hired the services of tested and trusted business and HR consultants to help us conduct critical SWOT analysis for us. Here is a summary from the result of the SWOT analysis that was conducted on behalf of John Johnson & Co® Property Rental Agency, LLP.

The strength that we will be bringing to the table in the Apartment Rental industry is our robust relations with accommodation owners and properties investment moguls. We have access to a pool of tenants and we equally have a team of experts who have cut their teeth in the Apartment Rental industry. Our commission structure and relationship with freelance real estate agents in San Diego, California will also count towards our advantage.

As a newbie in the Apartment Rental industry, we might have some challenges competing with big time realtors and other rental property companies that have been in the industry for many years; that perhaps is part of our weakness.

• Opportunities:

As the economy of the United States of America began to grow and demand for rental apartments rose, industry revenue grew at a rapid pace hence opening vast opportunities for rental property companies. We are well – positioned to take advantage of any opportunity that comes our way.

Some of the threats that we are likely going to face as a rental property company in the United States of America are unfavorable government policies , global economic downturn and unreasonable tenants.

7. MARKET ANALYSIS

• Market Trends

A close watch of happenings in the apartment rental industry shows that vacancy rates indicate the relationship between industry supply and demand. High rates represent an oversupply of residential rental property relative to demand.

These rates are also a good indicator of trends in industry revenue and profitability. Profit margins tend to shrink as vacancy rates grow because residential rentals are being underused. Rental vacancy rates are expected to increase in 2018, posing a potential threat to the industry.

As a matter of international best practices, the national unemployment rate is a benchmark for determining the overall health of the US economy and has had mixed effects on industry demand. As the unemployment rate falls, individuals tend to have more money to spend on living expenses and afford higher rent prices.

Simultaneously, with more money to spend, individuals may choose to purchase a home rather than rent, which can adversely affect industry demand. The national unemployment rate is expected to drop in 2018, representing a potential opportunity for the industry.

Another obvious trend that is common with rental property companies in the United States of America is that most of them are improvising on more means of making money in the Apartment Rental industry and as matter of fact they are also acting as property developers and home staging agents amongst many other functions that they are involved in.

One thing is certain for every rental property company; if they are hardworking, creative and proactive, they will always generate enough income to meet all their overhead and operational cost, keep their business going without struggle and make reasonable profits from all business deals that they are involved in.

8. Our Target Market

Our target market as a rental property company cuts across people of different class and people from all walks of life. Although finding tenants is relatively easy, but the truth is that finding qualified and law – abiding tenants can be somewhat challenging.

It is important to note that the target market for the rental property business goes beyond those who make use of the internet (Craigslist to search for properties; some of them only rely on the print media (local daily or weekly newspapers), some on word of mouth and others on street to street search. The bottom line is that the market trend for rental property business is indeed a dynamic one.

In other words, our target market is the whole of the United States of America and below is a list of the people and organizations that we have plans to do business with;

• Families who are interested in renting/leasing or acquiring a property
• Corporate organizations who are interested in renting/leasing or acquiring their own property/properties
• Land Owners and landlords who are interested in renting/leasing out their properties
• Corporate organizations (real estate agencies, property development companies et al) who are interested in renting/leasing out their properties
• Foreign investors who are interested in owning properties or leasing properties in the United States of America
• Managers of public facilities

Our competitive advantage

The availability of competent and reliable real estate agents under your payroll, our business process, the financial structure of the company, management of high-quality assets – portfolio, superior financial management and debt management and of course our pricing model et al are part of our competitive advantage.

Another possible competitive strategy for winning our competitors in this particular industry is to build a robust clientele base, and ensure that our properties cum apartments are top notch and trendy. Our organization is well positioned, key members of our team are highly competent and can favorably compete with the some of the best in the industry.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and objectives. We will also engage freelance marketing agents on a commission level to help us market our services.

9. SALES AND MARKETING STRATEGY

We quite mindful of the fact that there are stiff competitions in the rental property cum real estate market in The United States of America, hence we have been able to hire some of the best business developer to handle our sales and marketing.

Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained on a regular basis so as to meet their targets and the overall goal of the organization. The training is not restricted to only our full – time employees but will include our freelance brokers.

John Johnson & Co® Property Rental Agency, LLP is set to make use of the following marketing and sales strategies;

• Introduce our rental property company by sending introductory letters alongside your brochure to tenants, corporate organizations and other key stake holders throughout the city where our company is located.
• Print out fliers (list of accommodations for rent/lease) and business cards and strategically drop them in offices, car parks, libraries, public facilities and train stations et al.
• Use friends and family to spread word about our business
• Post information about our company and the services we offer on bulletin boards in places like car parks, schools, libraries, and local coffee shops et al
• Place a small or classified advertisement in the newspaper, or local publication about our company and the services we offer
• Leverage on referral networks such as agencies that will attract clients (tenants) who need our properties cum apartments
• Advertise our rental property company in relevant real estate magazines, newspapers, TV and radio stations.
• Attend relevant real estate expos, seminars, and business fairs et al to market our services
• Engage in direct marketing approach
• Encourage the use of Word of mouth marketing from loyal and satisfied clients
• Join local chambers of commerce and industry to market our product and services.

Sources of Income

John Johnson & Co® Property Rental Agency, LLP is established with the aim of maximizing profits in the industry. We have successfully built a vibrant real estate network that covers the whole of the West Coast in the United States of America so as to help us build a profitable business.

Below are the sources we intend exploring to generate income for John Johnson & Co® Property Rental Agency, LLP;

10. Sales Forecast

It is a known fact that as long as there are tenants in the United States of America, there will always be need to for them to hire the services of rental property companies from time to time.

We are well positioned to take on the challenges in the industry, and we are quite optimistic that we will meet out set target of generating enough income / profits from our first month of operation and grow the business beyond San Diego, California to other Provinces in the United States of America within record time.

We have been able to examine the rental property business, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast.

Below are the sales projections (commissions generated) for John Johnson & Co® Property Rental Agency, LLP it is based on the location of our business and the rental property and related services within the Apartment Rental industry that we will be offering;

• Rent / lease a minimum of 30 housing units to clients (flats, duplexes, studio apartment et al) within the first 6 months of operation
• Rent / lease a minimum of 20 office facilities to clients within the first 6 months of operation

N.B: Please note that we cannot put a specific amount to the projection because the prices and commissions vary for different properties. Part of our business strategy is to work within the budget of our clients to deliver quality property / properties hence it will be difficult to project what we are likely going to make from such deals.

But the bottom line is that we are definitely going to make reasonable profits from any business deal that we execute since we work based on commissions.

11. Publicity and Advertising Strategy

We have been able to work with our consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the Apartment Rental industry by storm which is why we have made provisions for effective publicity and advertisement of our company.

Below are the platforms we intend to leverage on to promote and advertise our rental property business;

• Place adverts on both print and electronic media platforms
• Sponsor relevant TV shows so as to communicate our brand and what we do
• Maximize our company’s website to promote our business
• Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, LinkedIn, Google+ and other platforms (real estate online forums) to promote our business and list our properties for sale and for lease.
• Install our billboards in strategic locations in and around the university community/campus in San Diego, California
• Distribute our fliers and handbills in targeted areas from time to time
• Attend landlord association meetings with the aim of networking and introducing our business.
• Ensure that all our workers wear our branded shirts and all our vehicles and ambulances are well branded with our company’s logo et al.

12. Our Pricing Strategy

Part of our business strategy is to ensure that we work within the budget of our clients to deliver excellent properties to them. The real estate industry is based on commissions and properties are valued by professionals based on the area the facility is located, the type of facility and other factors.

Since we are not directly in control of the pricing system in the real estate industry, we can only abide by what is obtainable when it comes to pricing structure. Part of what we intended doing that will help us cut cost is to reduce to barest minimum all maintenance cost by renting/leasing any property under our care to responsible tenants who won’t cause damage to our facility.

• Payment Options

At John Johnson & Co® Property Rental Agency, LLP our payment policy is all inclusive because we are quite aware that different people prefer different payment options as it suits them but at the same time, we will not accept payment by cash because of the volume of cash that will be involved in most of our transactions.

Here are the payment options that John Johnson & Co® Property Rental Agency, LLP will make available to her clients;

• Payment by via bank transfer
• Payment via online bank transfer
• Payment via check
• Payment via bank draft

In view of the above, we have chosen banking platforms that will help us achieve our plans without any hitches and we will also pay our freelance sales agents (real estate brokers) with same platforms. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our services.

13. Startup Expenditure (Budget)

From our market survey and feasibility studies, we have been able to come up with a detailed budget on achieving our aim of establishing a standard and highly competitive rental property company in San Diego, California and here are the key areas where we will spend our startup capital;

• The total fee for registering the business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits – $1,500.
• Marketing promotion expenses (8,000 flyers at $0.04 per copy) for the total amount of – $10,000.
• The total cost for hiring Business Consultant – $5,000.
• The amount needed for the purchase of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $30,800.
• The total cost for the purchase of accounting software, CRM software and Payroll Software – $3,000
• The total cost for leasing facility for the business – $60,000.
• The total cost for facility remodeling to fit into the type of jet ski rental business facility – $30,000
• Other start-up expenses including stationery – $1000
• Phone and utility deposits – $3,500
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, tables and chairs et al) – $4,000.
• The cost of launching a Website – $600
• Miscellaneous – $5,000

Going by the report from the market research and feasibility studies conducted, we will need about two hundred and fifty thousand (250,000) U.S. dollars to successfully set up a medium scale but standard rental property business in the United States of America.

Generating Funds/Startup Capital for John Johnson & Co® Property Rental Agency, LLP

John Johnson & Co® Property Rental Agency, LLP is a business that will be owned and managed by John Johnson, Carson Reeves and Lance Taylor. They decided to restrict the sourcing of the startup capital for the business to just three major sources.

• Generate part of the startup capital from personal savings and sale of stocks
• Generate part of the startup capital from friends and other extended family members
• Generate a larger chunk of the startup capital from the bank (loan facility).

N.B: We have been able to generate about $100,000 (Personal savings $80,000 and soft loan from family members $20,000) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting John Johnson & Co® Property Rental Agency, LLP is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to rent out properties a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

John Johnson & Co® Property Rental Agency, LLP will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check : Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Renting of Office Facility and remodeling the facility in San Diego, California: Completed
• Conducting Feasibility Studies: Completed
• Generating capital from the CEO / President and Business Partners: Completed
• Applications for Loan from our Bankers: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with key players in the industry (networking and membership of relevant real estate bodies): In Progress

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How to start a short-let apartment business..

Short-let apartment business has become one of the thriving niches in real estate, and the quest for comfortability and a home away from home experience contributed to the enormous growth of the industry. Unlike custom hotel rooms, a short-let apartment provides a homely experience, it has every home appliance and offers more luxury services at affordable prices. Now that you have decided to start a short-let apartment business, keep in mind that it has to do with top-notch hospitality and managing people. As the case may be, you would have to deal with your customers, staff, and house owners if you can’t afford to buy a house.

A short-let apartment works in different ways, you can either buy a property in your name or the purpose of partnering with a building owner to use their apartment to run your ideas. Starting a short-let business is a great endeavour towards getting an extra source of income from investment, this is because running a short-let business is a real estate investment technique that allows you to make a huge profit by getting a real estate property, developing it, and renting it out for a short duration.

Short-let apartments are also known as Serviced apartments where contract workers, travellers, families, and business owners rent for a short period as the name implies, it can be for 2 or 3 days, or for as long as 3 months. The prices of a short-let apartment vary depending on the type of luxury it offers, the facilities, the location, and other factors, regardless it’s an interesting and smooth way to make money. 

Short-let apartments range from self-contained or studio apartments to bungalows, room and parlour self-contained, and duplexes. The most important aspect, however, is its upkeep and management. To run a successful short-let apartment business, you’ll need a trustworthy apartment manager to oversee all the activities and monitor all transactions for the business.

How to Successfully Start Your Short-let Business

Before you can fully dive into the business, there are some basic things you need to do. This will enable you to fully understand how to go about the business even if you don’t have any knowledge about real estate. Below are the necessary steps to follow before starting your business.

Market Survey:

The first and most important step in how to start a short-let apartment business is to run a market survey, and acquaint yourself with what the niche entails. You must have heard about the business from someone; somewhere, or somehow, however, you need to get your facts right, don’t jump to conclusions based on what someone said. So, do a careful analysis of how you want to go about your own business, what other short-let businesses do or how they are doing, the prices of short-let apartments (lowest and highest prices), location of apartments, real estate property managers, platforms for short let apartments and so on. A market survey is important if you want to make money by starting a short-let apartment and since nothing is new under the sun, you need to analyze what successful owners in the niche are doing.

Prepare a Business Plan:

This is the next step on how to start a short-let apartment business, the outcome of your market survey would help you make an informed decision in starting your own serviced apartment business. Your short let apartment business plan must feature the method, rules, goals, and objectives that would guide how you run your business, note down the services that your short-let business would offer, and the prices.

Your business plan must also include how you want to get your first short-let apartment: will you start with your home or do you want to rent out a space and furnish it to suit your need or do you want to buy the apartment from the owner?

Also, how do you want it to be furnished, and who should you employ for the setups? What are the methods of reaching your potential customers and vice versa, if you can’t handle the apartment yourself, make plans for contacting a real estate manager. Furthermore, make plans for your foreign clients, and ensure that there is proper documentation of all customers. There is a short-term rental business plan pdf template that you can also use to draft your own.

Register Your Business:

Next thing is to register your short-let apartment business, once you have a well-furnished apartment in a good location, you are ready for business. So, register your business with CAC and connect with other real estate managers in the industry, follow the necessary guidelines and launch your business. Some other regulations and licenses would be required for your business, also consult the necessary authorities to ensure smooth running

Setting Up a Website:

As you know, the world has gone digital, the fastest and easiest place where you can advertise and attend (take bookings) to your customers is by creating a website. The key thing that would drive sales is marketing your business and setting up a website for your Air BnB. This would make it easy for customers to check out the apartments without having to be there physically, it would save a lot of time and energy, you can also get more clients when you advertise on Jiji, bookings.com, and other popular platforms. 

Draft Up an Agreement/Contract for Your Clients:

Finally how to start a short-let apartment business is to prepare a written contract that must be signed before your customers pay for their choice of apartment. This contract should include the agreed price, duration of stay, damage fees, and the dos and don’ts of the apartment.  

Easy Ways To Start a Short-let Apartment

Prepare Your Capital:

By now you know the amount you need to start the business, so go ahead and put the money to use. Register your business, and set up your website, you have to pay a web developer for this Make sure it’s easy for the will be best if you can

Buy, Rent or Build an Apartment in a Good Location:

One good thing about starting a short-let apartment business is that you don’t have to own the building, and you can start your business with just one apartment, that’s why you need to be futuristic in your business plan. Now depending on your capital, you can buy a house, and furnish it then start your short-let business, you can equally rent the building from the owner with a clear agreement on what it would be used for, you just have to furnish it to the taste of what your business offers, these two methods would be the ideal way to start a short-let apartment business. You can either do this alone or find someone to invest in your idea, this way you can buy land and build the kind of apartment you want.

Employ Staffs:

As a new business, you might start by hiring two or three people. A manager, Receptionist, and cleaner.  that would be there to cater to the needs of the guest and keep clear records of every one of them. There should be someone that would manage the cleaning, listings, guest checking, bookings, and other services that come with your apartment. Movements must be duly documented to ensure the security of life and properties.

Partner With a Real Estate Company:

If you are not sure you can handle the business, it will be best if you can employ the services of a real estate agent. While you do other things, let them handle it for you, it will even be easier because they know more, so reach an agreement with them on the percentage they would get for each stay.

Benefits Of Starting a Short-Let Apartment Business

As mentioned earlier, the short-let apartment business is prospering, and it’s one of the easiest and quickest ways to make money in recent times. It is beneficial to both the customer and the Owner. Since Short-lets are usually fully equipped, it gives the guest a homely feeling and provides them with the essential cooking utensils to make their meals and do other things that could be done at home. So, the guests, do not need to worry about packing and unpacking because the apartment comes fully equipped with everything they need to live comfortably. In comparison to staying in a hotel, it also offers a more cost-effective option. Short let’s are ideal for business travellers, contract workers, and people visiting friends or family in another city for a few days or weeks. Families who are renovating their home or looking for a rental or purchase property could benefit from short lets as well. Short-lets give you the privacy you need while still allowing you to entertain your guests.

Benefits for the Business Owner:

• As for the business owner, one of the benefits of starting a short-let apartment is the ability to control your taxes and acquire loans from banks, investors or building owners who can use their newly-acquired apartment as collateral to obtain a loan for a new business or investment. Also, this business is capable of generating enough capital for other businesses in a short time. 
• Another benefit for the owner is the high-income rate; we are in a period where many individuals and families travel for vacations and or business trips and they find short-let apartments more private, and the facilities are preferable compared to a hotel room. Also, the owner can decide the duration of stay for each guest thereby controlling the income rate.
• Lastly, the value of the property is always liable to increase over time, as a result of changing market conditions; even if the property does not change, the value may rise significantly over time.

Amazing Facts you Should know About Serviced Apartments:

• Serviced Apartments are cheaper alternatives to hotels: One of the expensive expenses when travelling for leisure or planning an event outside where you reside is accommodation. Air BnB serves as a superior and more affordable lodging alternative, as it allows you to enjoy a home away from home feeling for a lot less money. When it comes to accommodations, short-term apartments provide what is commonly referred to as “affordable quality. Serviced apartments are emerging as a hotel substitute due to their accessible elegance. The average cost of short-term apartment rentals in Lagos is N65,000 per day, according to data from the Nigeria Property Centre. This is comparable to the average of N100,000 or more charged each day by hotels for a similar apartment that falls under a four-star rating.
• A win-win for customers and owners: While some house owners are directly benefitting from the short-let niche, others are enjoying early rent payment from their tenants who put out their spare rooms up for short let. People go on vacations for a lengthy period leaving their properties unoccupied. They receive no further benefits from these vacant flats that sit idle. A few months of building rental would generate extra cash at no further expenditure. Industry analysts predict that more Nigerians would follow their peers and offer their properties for short-term rentals, which will subsequently result in lower pricing for tenants to enjoy.
• Short-let apartments have a higher value in appreciation – Since the rental value may be quickly converted into resources for other businesses while turnover rises, a short-let rental flat has a larger value appreciation than hotels. That’s why new companies invest well in their apartments, the more you invest, the more you gain.
• It Is Needed for Flexible Business Travel: People are travelling more, and not just for pleasure. Employees of multinational corporations seeking to exchange knowledge and expertise around the world have grown accustomed to flexible business travel. When travelling for leisure individuals are eager to immerse themselves in the culture of the country, hoping to find the best spots no one knows about and when going for business, people desire space and home-from-home comforts. Whether travelling for business or pleasure, everyone wants to feel at home. Let them have it so you gain more.

Final Notes

short let business in Nigeria  is a unique business that unites property owners in various locations with individuals, groups, and corporate firms who require a home for a short stay rather than hotel lodging. The short-letting industry in Nigeria is a particular niche that has flourished for a variety of reasons, most notably as a reliable source of income.  This article on how to start a short let business will help you to successfully kickstart your own business in no time, It contains the necessary steps you can easily follow to learn short let management.

Aishat Sadiq

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Starting your own short-let business

The short-let market boom is real, and many landlords and investors are reaping the benefits of the UK’s tourist and business accommodation industry to increase their property yields. While currently a very profitable model, it comes with its own challenges and pitfalls. We sat down to speak to Ahmed Khan , who has quickly build a portfolio of properties in the serviced apartment and short-let markets, and asked him to share some key takeaways from his time as a property manager and a public speaker, having engaged with hundreds of landlords.

HW • Hi Ahmed! How did you start in the short let market?

AK • I was interested in getting involved in the property market for some time but after doing some research, I realised that the established property investment models such as Buy-to-Let were very slow and did not produce a very high return. A lot of the traditional strategies are designed to help you achieve wealth over a long period of time, as opposed to cash now to live on.

So I started looking at other ways to make money from property and came across the short-let model. Since the end of 2016, I have been leasing properties and letting them out as short-let properties. If you can find areas with good margins between the rent you’re paying and the nightly rate you can charge, it can be a very lucrative strategy .

• • • • • • • • • •

HW • What were your best and worst decisions when preparing your first property?

AK • The best decision I made was to invest in a design process. In the short-let market, you want your property to look well-designed and stand out vs. competitors to maximise the number of bookings you receive.

The worst decision I made was taking too long to design the apartment. The longer you spend designing the apartment, the more money you are losing from not having a live listing . In an ideal world, I should have started the design process as early as possible in order to get the highest yield-generating design live quickly - which is why Homewings is such a great solution to anyone looking for a rapid redesign without compromising quality.

HW • What are some useful tools that help your property management process?

AK • The most useful tool a landlord can use for the short-term business is a channel manager. The one I use is called Guesty . This will do the majority of the work for you and I believe it's an absolute necessity if you want to remain sane in this business! For example, Guesty will send the checkin and checkout instructions to guests, take payment from guests, schedule cleans for the cleaners and deal with the majority of the guest communication. It has reduced my time input significantly.

HW • Would you prefer to use a management agency or manage your properties yourself?

AK • I personally self-manage all my properties but then again this is a full time business for me. If you don't have the time to manage then the first thing you should do is put in all the systems, like channel managers, to drastically reduce your time input. If after that, you still think the workload is too much for you, then provided the numbers work, you can get a management agency which will do everything for you. If you’re going to use an agency, tell them to send you some links to other properties they manage and see the sort of reviews they've been getting - the reviews will generally tell you how good their management is.

HW • How would you advise someone on choosing between short- and long-let?

AK • If you want to make the most money from your properties then generally short-letting a property will almost always generate a higher return, compared to if it was on the long-term let . However, if you want your property investment to be 100% passive and not have to deal with anything then first you should consider using a short-let management agency as they will do all the work for you, and you will still receive a higher return than you would on a long-term model. So you get the benefit of a higher return, without any more work - so there is no risk!

HW • What's next for you?

AK • Up until now, I have always leased properties, which I have then rented out on a short-term basis. The strategy is absolutely amazing for cashflow, however, you don’t benefit from any capital appreciation as you do not own the property. So my plan going forward is to start buying properties, so I get the benefit of both high cashflow from the properties I don’t own, and capital appreciation from the ones I do own.

As a property investor, you ideally want both cashflow and equity and striking a balance at times can be hard. But combining these two strategies will help me achieve this. Aside from this, I am also a public speaker and I speak at events throughout the country about investing in short-let properties, business and sales and help others achieve the same results that I have achieved.

More on Ahmed Khan’s work here: https://www.ahmedkhan.co

If you're interested in redesigning your space specifically for the short-let space then get in touch here and find out how Homewings can help you differentiate from competitive listings in your area to increase your nightly fee and occupancy rates.

Would you like to discuss a project?

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Q&a with jeremy slater - general manager, london residents club, beyond the capital - booming short-let markets across the uk, how to choose the right product or design for your short-let space, short-letting on airbnb: the pros and cons.

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The Rise Of The Short-let Business In Nigeria

Though they have been in existence in Nigeria since 2011, the not so popular short let apartment leveraged the COVID-19 lockdown, a period when most hotels were out of business and were forced to close their doors to occupants, to record breakthroughs.

As the name implies, short-let describes furnished self-contained apartments that are rented for short periods, usually by the month as opposed to annual rentals in the unfurnished apartment rental market.

Short let apartments are firing shots at hotels as the big-wigs in Nigeria’s hospitality industry are losing market share to the smaller short stay ventures.

Not many people predicted that an industry as acute as the apartment and hospitality would become as economically fruitful and profound as it is now. A niche which has been carved for people who are willing to take up the challenge in its stride and run with it; it’s produced results that industry leads never anticipated.

The COVID-19 pandemic which resulted to a long closure of many establishments across the world did not topple the solid foundation of the Short let World. Rather, it improved the short lets business in Nigeria.

Low cost of the home-like short let apartment, the fear of hotel crowd and high chances of virus exposure, ability to choose the apartment of choice are top reasons short-stay apartment saw a boom in 2020, and is projected to maintain the same momentum in 2021, as compiled from BusinessDay survey.

Estimated at hundreds of millions of naira, Nigeria’s short let market is having a slice of the hospitality business in terms of the volume and value of transactions it is taking from the conventional hotels.

While data from Statista put the average occupancy rate of Nigeria hotels at 47.5 percent in March 2021, a survey by BusinessDay across three Nigeria’s busiest cities shows the average occupancy rate for short let apartments increased to 76.3 percent in March from 54.6 percent reported three years ago. Analysts believe short let holds investment opportunity for strategic investors.

Before the COVId-19 induced growth, short-let apartments in Nigeria were already gaining grounds as the owners of the hub for short let and the biggest in the world, Airbnb ranked Nigeria in 2019 as one of the fastest-growing markets globally for Airbnb.

Described as the most affordable option for long month stays. They are seen as an alternative to hotels. Some of the property operators permit pets, just like some people would ordinarily allow in their homes.

According to Tunde Balogun, CEO of Rent Small-Small, the supply of short let properties in Nigeria has grown to a stage that has surpassed demand. The many offerings in the short-let business must have stirred up competition and as a result influenced the relatively lower price charged by the operators as against the conventional hotel price.

While hotel remains the primary provider of hospitality services in Nigeria, the following are the reasons why short let is becoming a strong competition to the hospitality industry.

1.Cheaper alternative:

Accommodation and the right event venues are considered some of the most expensive items when either traveling or organizing an event. It also serve as a better and cheaper alternative to hotel accommodation, so you can enjoy the service of a hotel, in a residential environment and pay far less than a hotel. Short let apartments offer what industry players describe as “affordable quality” when it comes to accommodation. The affordable luxury nature of short let apartments is making the venture to become an alternative for hotels. According to data from Nigeria Property Centre, the average price of flats short let in Lagos is N65,000 per day. This is compared to the average of N100,000 or more charged per day by hotels for a similar apartment that falls within the three or four-star ratings.

2. A win-win for tenants and landlords:

While some landlords are directly reaping from the short let industry, others are enjoying early rent payment from their tenants who put out their spare rooms up for shot let. People go on vacations for an extended period leaving their properties vacant. These empty flats stay unused and bring them no added benefits. Renting out the building for a few months would make an extra source of income, at no extra cost. According to industry analysts, more Nigerians are expected to join their peers and list properties for short let and it would consequently lead to lower prices that will be enjoyed by occupants.

3.Complete Peace of Mind for the Homeowners and Tenants:

Short let is hassle-free for the homeowners, and it gives them complete peace of mind. A team of cleaners prepare the property for the tenants’ arrival (fresh linen and towels, wardrobe and fridge space). This continues if it is a serviced apartment. If it is not, the apartment is cleaned again when the tenants leave. And in the meantime, you’re getting someone to keep an eye on your house when you’re not there.

4.It is needed for flexible business travel:

Travel has changed. People are traveling more, and not just for leisure, employees have become used to flexible business travel with International companies looking to share skills and experience across the globe. When travelling for leisure people are looking to immerse themselves in the culture of the country, wanting to discover the best places no one knows about and when travelling for business, people want space and home-from-home facilities. Everybody wants to feel at home, whether on a business travel or for leisure. Let them have it, while you make more money.

5. Higher value in appreciation:

A short-let rental apartment obviously has a higher value appreciation since the rental value can be used as resources for other enterprises in a short period of time while turnover increases.

The Bottom line

Companies offering short-term lets have worked to make the process as simple as possible, taking care of the whole booking and payment process with just a few clicks. You also have your very own local host to tap for knowledge on the area so you can find all the best places that aren’t generally in the tour guides on the website. It’s a truly personal way to see a city.

Of course, high-end serviced apartments which also benefit from the attentive service you would expect from a top hotel are available for short lets. Each one-bedroom apartment oozes contemporary design with luxury finishes including cinema-style projector screen, wall mounted speakers, and fluffy bathrobes etc. you may never want to go home.

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What Exactly Is A Short Let Apartment?

With the popularity boom caused by the pandemic, folks are beginning to opt for a Short Let Apartment rather than a hotel stay.

To put it plainly, there’s no one definition. It’s more of an umbrella term, with a general definition. Essentially, renting a short-let apartment is becoming more preferable than renting a hotel. Primarily to business professionals and travellers.

What’s The Difference?

We’re so glad you asked, reader! There can be numerous differences, and benefits, depending on who you ask. Many prefer the homelier feel of a short-let apartment. Here, you can cook your own meals, wash your own clothes, and enjoy your own space. They are often decorated to be a home away from home, too. Whereas hotels can feel unfamiliar in comparison. If you’re someone who travels a lot and misses the comfort of home, renting a short-let apartment could soothe some of those woes for you.

What’s Good About Them?

A variety of things, for a variety of different people. Families appreciate them for their close-knit feel. In a hotel, a family holiday may feel quite far apart. Even when you’re supposed to be becoming closer as a family unit! This could occur due to the far-apart feel of the rooms, or the intrusion of strangers in your immediate area. A short-let apartment completely negates this by recreating the vibe of being at home. In one house, all together. No strangers, no staff, just you and your loved ones.

For business professionals, it’s the ease of access. It’s the fact that you can set up a little home whilst you’re away from your own. Being constantly on the move may feel a little uprooting, but with a short-let apartment, it doesn’t have to be. Besides, parking is usually much easier! There is also much more privacy. This is ideal for stays that are a little longer, too, around the six months mark. Hotels are fantastic and can be truly comforting, but six months in one may be too much for those of us who are prone to homesickness.

Not only this; as we adapt to the pandemic, safety is a huge concern. Short-let apartments take away the risk of transmission by minimizing contact with strangers. This is ideal for keeping peace of mind. Not to mention, keeping yourself safe!

How Much Are They?

That all depends on the short-let apartment! Things like location and size come into account. A short-let apartment could cost you anything from £500 a month to upwards of £1000. While saving money, it’s also important to pick the best short-let apartment for you. Not sure how to do that? No problem. We thought ahead and have prepared this handy guide to show you what to look for in this type of accommodation.

This blog post is not intended to constitute legal or financial advice.

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How To Start A Shortlet Business in Nigeria and make N100k Every Day in Passive Income..

I have been thinking of the shortlet market lately. It’s still an untapped segment of the real estate market. My wife and I have been studying that segment of the real estate market since after our wedding in May this year. We experienced it first hand when we were booking accommodation for our wedding guests and discovered it was actually cheaper to use multi-room shortlets than hotels. So we got interested and planned to look into it fully when we fully settle down. We are getting set to acquire our first shortlet apartment for business.

What is Shortlet?

It’s simply a process of acquiring a property on rent or outright purchase with the intention of converting it to shortlets business purposes. You furnish it and then list it on popular platforms such as AirBnB, bookings.com, etc. It’s attractive to tourists visiting the country, newly weds for romantic gateways, house parties by buddies, and just about anyone who wants a home away from home.

It’s similar to what I do with cars. I buy a sedan car like a Toyota Corolla for the purpose of doing Uber. I list it on Uber platform and make money daily in passive or active income.

So in the case of shortlets, you can buy a 2-bedroom flat, furnish it lightly and convert it to shortlets. You can market it directly to your target audience or simply list it on Bookings.com or AirBnB to leverage on their massive traffic.

Depending on the location of the property, the average booking per is 70k-120k. Properties in highbrow areas of Lagos like Ikoyi, VI, Lekki Peninsula go for more premium prices.

So let’s say you buy a 3 bedroom apartment for N25 million. Let’s say you furnish it to taste with N3 million. That’s N28million in total.

Let’s do some maths… If your booking price per day is N100k and you have 70% occupancy rate per week.. That means, in a week, atleast 4 days are fully occupied. That’s N400k per week.

In a month (4 weeks): N1,600,000 In 12 months: N19,200,000 In 18 months: N28,000,000 (break even)

Barring minor repairs and replacements, the rest is pure profit alongside the continuous increase in the value of your property.

Imagine having 3 units of 3-bedroom apartment in your investment portfolio.

And you continue earning for life as long as the property belongs to you.

This is crazy

Why You Should Invest in Shortlets.

Higher in Demand Than Hotels: You can get a 3-bedroom shortlet for 120k which can house up to 10 people but hotels usually have restrictions as to the number of guests in a room; usually not more than 2 persons. In most cases, shortlets can have some amenities such as Netflix, kitchen area and spa at no extra cost, something not usually accustomed to hotels.

So people are more inclined to use shortlets than hotels. Hence the occupancy rate of most shortlets is up to 90% in most busy locations like VI and Lekki.

I have a feeling that developing areas such as Ibeju-Lekki, Abijo all the way to Abraham Adesanya axis of the Island would see a meteoric rise in the shortlet market due to the massive urbanization going on there. The presence of the Dangote refinery, Airport and the increasing migration of people and businesses to that area would give rise to shortlet businesses . So it’s better to tap into that market now before it gets saturated.

How to Tap into The Shortlet Business.

-Find an apartment to buy. There are amazing offers on ground from reputable real estate companies such as the Cedarwood Apartments and Terraces and Bungalows and Fairfield Apartments all going for very affordable prices and are in prime locations with flexible payment plans up to 12 months.

List of very affordable new apartments you can buy and convert to shortlets

• Cedarwood 1-Bedroom Apartments- N15.5m ( https://pukenaproperties.com/property/cedarwood-luxury-apartments-1-bedroom-solo-apartments )
• Cedarwood 2-bedroom Apartments- N21.4m ( https://pukenaproperties.com/property/cedarwood-luxury-apartments-clique-apartment-2-bedroom/ )
• Cedrawood 3-Bedroom Aparments- N35m ( https://pukenaproperties.com/property/cedarwood-luxury-apartments-combo-terrace-3-bedroom-bq/ )
• Cedarwood Luxury 2- Bedroom Bungalows- N18.9m ( https://pukenaproperties.com/property/2-3-bedroom-cedarwood-luxury-bungalows/ )
• Cedarwood Luxury 3-Bedroom Bungalows- N22.3m
• Fairfield Apartments- From 14m – 25m/1-3-bedroom respectively ( https://pukenaproperties.com/property/fairfield-estate-abijo-finished-apartments/ )

-Find a Property Management Company . If you don’t have the time to manage your shortlet business, you can find reputable shortlet managers in Lagos to handle your business for you. Pukena Properties Ltd has a dedicated team of shorlet managers that can manage your business effectively and make sure you have the best returns on your investment.

-Pool funds together and own collectively. This is an idea where a group of investors can pull funds together and buy a property with the intention to use it for shortlet business. Each person earns up to 30% ROI on his investment quarterly for life. The property will be held in trust for the investors and shares can be transferred from one investor to another. This is very easy and cheap to start. If you are interested, kindly reach me for further details.

The shortlet market is getting popular and will soon replace the hotel industry as the preferred option for Nigerians due to it’s affordability, flexibilty and viability.

Jump in now to start your journey!

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