Pros and Cons of Vacation Rental Business

All of us would like to have a solid source of passive income and earn extra cash without much time or effort investment. With a vacation rental business, you can make additional money while pursuing your primary job. If your short-term rental venture is truly successful, you may even want to quit your main job and rake in cash just by leasing out your spaces to vacationers.

The idea of running a short-term rental property appeals to many people as it can quickly bring a good return on investment and promise financial security in the future. Still, like any other enterprise, owning a short-stay rental home has its downsides you want to be aware of before pouring your hard-earned dollars into this type of project. Hosty is an expert in Airbnb rentals and reveals all pros and cons of the vacation rental business for potential hosts like you.

Benefits of Being a Short-Stay Rental Owner

Yes, you can really earn big $$$

This is the main reason why people consider investing in a vacation rental property. What can be better than generating extra cash just by having accommodation for rent? Moreover, a vacation rental home can be your own retreat when you want to escape from the stress and fuss of everyday life. If you own a rental property in a hot spot, for example, near universities, colleges, or in a popular touristic destination, you are highly likely to build wealth by leasing your spaces out.

Real estate prices are continuously increasing

Property is getting more expensive every year, and if your short-term rental is properly cared for, its value will only appreciate over time. This is especially true for homes in high-demand areas. Even if you decide to sell your vacation rental business, chances are that you will get a great deal of money from that.

Tax deductions!

If you diligently pay rental income taxes, you can qualify for tax deductions and write off some business-related expenses. For instance, running a short-stay rental property allows you to claim deductions for your cleaning/upkeep expenditures, utilities, property taxes, or for hiring a professional property manager. If you are paying a mortgage, you may be able to write off mortgage interest as well as homeowner insurance premiums. Each region has its own taxation system, so you want to research which tax benefits can be applied to your rental business in the particular place.


A beginner host may be overwhelmed with responsibilities to keep their rental property attractive and lucrative. Fortunately, there are lots of short-term rental management software that can automate most of the time-wasting tasks associated with administering a short-term rental and help you maintain a high occupancy rate. The best thing behind such solutions is that they allow you to manage a rental anywhere in the world. It means you do not need to be physically present in the place where your rental locates, as the majority of managerial duties will be put on auto-pilot.

Guests will easily find you

Since the home-sharing industry is thriving, there are plenty of online platforms that connect travelers with hosts, including Airbnb,, VRBO, TripAdvisor to name a few. So, you can advertise your listing on various websites to increase your chances of making a deal. Airbnb, for instance, gives you access to some property management tools to administrate your listing, such as availability and marketing tools. But with the help of specialized property management software, you can access dozens of essential features to make your business more efficient, including the ability to manage multiple listings across different marketplaces through a single dashboard, calendar synchronization, payment processing, and much more.

Disadvantages of Running a Short-Term Rental Business

Bad tenants

Before investing in buying a rental property, you need to realize that you are going to let strangers from all walks of life in your home. No one can guarantee that the guests will respect your property and leave it in pristine condition when checking out. Damage from ill-behaved customers can dramatically outweigh potential earnings so that even property insurance may not be enough to recover your losses.

Strict regulations

Short-term rental properties are heavily regulated in many countries. While most Airbnb-friendly towns do not set strict regulations and limitations for rental owners, in some regions, real estate investors may face stringent laws and prohibitions that can make the rental business totally impractical. In some cities, you cannot start a vacation rental project without the consent of your neighbors. Check out Airbnb’s Responsible Hosting page to know what regulations may apply to hosts in your given area.

Tiresome upkeep and maintenance

Housekeeping, cleaning, restocking, and repairs after each stay will become the necessary evil you will have to handle properly. If you have multiple rentals in different locations, you will also spend lots of time and strengths on traveling between properties and sprucing up each of them. On top of that, you will have to allocate time to respond to prospect’s inquiries, promote your listings across different platforms, update your rates according to the demand, deal with reviews, and keep the availability calendar adequate. This can be too much on your plate, so one day you might end up with physical and mental exhaustion.

A very few cons of being a rental owner should not impede your decision to invest in a vacation rental business. Luckily, there are lots of smart software solutions that will help you make your rental business profitable and stress-free. Hosty is powerful Airbnb management software that can take care of all your business needs so that dealing with your rentals will turn into a breeze.

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