Are Vacation Rental Properties Profitable?

Are vacation rental properties profitable?

At PMBO the most common question we get asked is, are vacation rental properties profitable? The short answer is, yes! There are some critical factors to consider that can impact your profitability though. Not all investments are equal, but with PMBO you can be sure you’ll make more profit from your vacation rental, and we’ll show you how.

It’s true that not all investments are made equal, but with PMBO you can be sure that you’ll make a profit from your vacation rental. Maybe even a more significant profit than you thought, and we’re here to show you how. So let’s talk about it.

How to make money with a vacation rental property

If you’re considering investing in a vacation rental property and you aren’t sure where to start, then you’re in the right place. Many different benefits come from this type of investment. However, it is crucial that you take a look at all of the pros and the cons before making your decision on whether it’s the right choice for you.

Just like any other investment purchase, if you’re going to put your hard-earned money into it, you’ll want to make sure you’re buying in at a decent price. One thing you don’t want to do is put all of your eggs (in this case, cash) in one basket and then not receive a return on it.

At PMBO we don’t offer real estate purchasing advice, but we do know the value of a dollar. And making a smart investment goes a long way into running a profitable vacation rental. Once you’ve found the location that works for you, then we can certainly help you make it more profitable.

As soon as you think you’ve found a profitable investment rental at a reasonable price, the next thing you’ll want to do is check your local ordinances and your HOA to ensure that you can comply with their rules and regulations.

If there’s one thing we know, it’s that nothing will cut into the profitability of a vacation rental more than you not being to rent out your property. So be sure to check the zoning laws to prevent from being fined or possibly shut down by the city.

Ok so now you’ve picked out the perfect property to invest in, and you’ve checked the zoning regulations, now you need to compare local rental rates in that area. One of the most important things to consider when investing in a vacation rental is if that investment is profitable.


Compare the rates of local rentals to make sure that your rental is going to allow you room to profit. Take into considerations all aspects of the rentals including location, seasons, zoning, construction, etc.

When you invest in a vacation rental, what you are doing is becoming a business owner. And as a business owner, you have the opportunity to deduct business expenses from your taxes.

A few deductions you could be eligible for as a vacation rental business are property tax, rental income, insurance, and supplies you need to buy for the home. These tax deductions mean the less money you have to spend, and more you get to profit.

Another huge part of making a profit from your vacation rental is the marketing aspect of it. These days you may think it’s as simple as listing your property on Airbnb. Though that’s what they would like you to believe, that isn’t always the case.

As with any business, you’ll need to advertise your rental to receive the full benefits of running it. PMBO can get your rental better advertising placement across all channels.

Considering which extras to include with your vacation rental could mean the difference between high and low volume traffic. Amenities are another thing you want to compare when you check local rental rates. What are people including in their prices?

Some rentals will include the bare minimum while some will be all-inclusive. Making sure you including the right amenities in your vacation rental could make all the difference between getting passed over for another property down the street.

Other things to consider that affect profitability

Now that you know that you can make money with a vacation rental let’s talk about a few things you should take into consideration when managing your rental. These are some things that could affect your profit if you don’t take them into account.

We touched based on this a little bit in the paragraphs above, but if you need help managing your vacation rental hiring a property manager is something you may want to consider.
There are many different options out there to help you manage your rental property. Check out our comparison sheet that breaks down the details of PMBO, property management companies, and owner managed rentals here.
At first, it might seem like managing and adding your vacation rentals to all the major channels might be more profitable. But sometimes that isn’t the case. Not only does the PMBO software save you time, but it also saves you money. As a super host and VRBO premier partner, we get your rental better placement across channels like VBRO.

No matter whether this is your first time buying a vacation rental or you’ve invested in one before, you should always be on the lookout for unexpected costs. Because this is an investment, you’re going to need to spend before you see an actual profit.
These unexpected costs could include things like taxes, inspections, insurance, cleaning, repairs, updates, and or utilities. And if you happen to live in another state, you might also want to consider a caretaker to meet and greet your guests when they arrive or be around in case of an emergency.

If you ever want to use your investment property for personal use like taking a vacation with your family, then that’s something to consider when you offer to rent it out especially if you’re renting it out for an extended period.

You do have full control over your schedule, but you also wouldn’t want to confirm a booking and then suddenly remember that you have a trip planned for your pleasure. If you do plan on using your vacation rental, the best idea is to block out time each year so that you can use it without it cutting into your profits.

Another good thing to take into consideration when committing to a vacation rental is whether or not you’ll use a property management company. Many vacation rentals use property management companies to keep things organized and keep their stream of income flowing.
The typical property management company takes 35-55%. AT PMBO you’ll start by paying only 10% when you sign-up. As part of our loyalty program, each year you remain active you’ll receive a discount on the reservation commission paid to PMBO. So, every year your vacation rental becomes more and more profitable.

So, as you can see, it is possible for you to make money with a vacation rental. It’s good to know all the ins and outs before you invest so that you can get an idea for the journey ahead. Because when you embark on this journey, investing in a property management company like PMBO is a critical part of maintaining a successful vacation rental.

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