Vacation Rental Business Plan
You’ve come to the right place to create your Vacation Rental business plan.
We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Vacation Rental companies.
Below is a template to help you create each section of your Vacation Rental business plan.
Executive Summary
Business Overview
Liberty Vacation Rentals is a vacation rental company located in Boston, Massachusetts. We rent residential properties around landmarks and points of interest to provide convenient lodging for travelers. Our accommodations can be rented daily, weekly, or monthly. We also offer bed and breakfast-style rooms in addition to whole-property rentals. No matter how long you visit the exciting and historic city of Boston, you’ll enjoy a luxurious experience that will feel like a home away from home.
Liberty Vacation Rentals is led by Andrew Collins, who is a licensed real estate broker with 20 years of experience. He has spent much of his career working in different real estate agencies where he specialized in rentals for 5 years before specializing in vacation sales for the next 10 years. His skills and experience will make him invaluable to our company’s mission.
Product Offering
Liberty Vacation Rentals will offer luxurious vacation rentals for residents and tourists of the Boston, Massachusetts area. We offer several different property types:
- Houses
- Condos
- Apartments
- Villas
- Townhouses
We offer waterfront properties as well as properties located near downtown and historical landmarks. We also have bed-and-breakfast-style properties in addition to whole-property rentals.
Customer Focus
Liberty Vacation Rentals will primarily serve tourists and business travelers that visit the Boston area. About 23 million people visit Boston every year, meaning there is an incredible demand for vacation rentals and other accommodations. Many tourists, especially those who are affluent, are looking for lodgings that are comfortable and luxurious. Liberty Vacation Rentals will offer these lodgings so that our properties can feel like a home away from home.
Management Team
Liberty Vacation Rentals’ most valuable asset is the expertise and experience of its founder, Andrew Collins. Andrew has been a licensed real estate broker for over the past 20 years. He has spent much of his career working in different real estate agencies where he specialized in rentals for 5 years before moving to specialize in vacation sales for the next 10 years.
Liberty Vacation Rentals will also employ an experienced assistant to help with various administrative duties around the office and several contractors that will lead the repairs and renovations that need to be done.
Success Factors
Liberty Vacation Rentals will be able to achieve success by offering the following competitive advantages:
- Location: Liberty Vacation Rentals’ location in the downtown area is central to historical landmarks, tourist attractions, corporate centers, shopping districts, and restaurants.
- Business Amenities: All of Liberty Vacation Rentals’ vacation properties have basic business amenities including high-speed internet.
- Management: The management team has years of business and marketing experience that allows the company to market and serve customers in the same manner as its most sophisticated competitors.
- Relationships: Having lived in the community his whole life, Andrew Collins knows all of the local leaders, as well as many of the area’s newspaper reporters and other influencers. As such, it will be relatively easy to build the Liberty Vacation Rentals brand.
Download the Vacation Rental business plan template (including a customizable financial model) to your computer here <–
Financial Highlights
Liberty Vacation Rentals is seeking a total funding of $350,000 to launch the business. The capital will be used for funding capital expenditures, salaries, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Office space build-out: $50,000
- Office equipment, supplies, and materials: $50,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $50,000
- Working capital: $50,000
The following graph below outlines the pro forma financial projections for Liberty Vacation Rentals.
Company Overview
Who is Liberty Vacation Rentals?
Liberty Vacation Rentals is a vacation rental company located in Boston, Massachusetts. We rent residential properties around landmarks and points of interest to provide convenient lodging for travelers. Our accommodations can be rented daily, weekly, or monthly. We also offer bed and breakfast-style rooms in addition to whole-property rentals. No matter how long you visit the exciting and historic city of Boston, you’ll enjoy a luxurious experience that will feel like a home away from home.
Liberty Vacation Rentals is led by Andrew Collins, who is a licensed real estate broker with 20 years of experience. He has spent much of his career working in different real estate agencies where he specialized in rentals for 5 years before specializing in vacation sales for the next 10 years. His skills and experience will make him invaluable to our company’s mission.
Liberty Vacation Rentals’ History
After working as a real estate broker for 20 years, Andrew decided to start a new company that offers luxurious vacation rentals in the Boston area. He knew that Boston was a prime location for tourism and that there never seems to be enough accommodations to keep up with demand. He scoped out the areas for properties that would be valuable- specifically luxurious properties that are located near historical landmarks and the waterfront.
In March 2023, Andrew Collins incorporated Liberty Vacation Rentals as an S corporation. Since incorporation, the company has achieved the following milestones:
- Acquired a centrally-located office from which to operate Liberty Vacation Rentals headquarters
- Began recruiting key employees
- Acquired rental contracts with 10 different residential properties
Liberty Vacation Rentals Services
Liberty Vacation Rentals will offer luxurious vacation rentals for residents and tourists of the Boston, Massachusetts area. We offer several different property types:
- Houses
- Condos
- Apartments
- Villas
- Townhouses
We offer waterfront properties as well as properties located near downtown and historical landmarks. We also have bed-and-breakfast-style properties in addition to whole-property rentals.
Industry Analysis
Over the past five years, the Vacation Rental industry has grown steadily, despite the challenges of the COVID pandemic. According to Allied Market Research, this growth is expected to continue as the Vacation Rental industry is expected to grow at a CAGR of 12.4% from now until 2031.
Millennials are the major force in boosting the growth of the vacation rental industry. Rising expenditure on travel, vacations, and accommodation among this generation is fueling the market growth. Travelers in this demographic are more inclined towards vacation rental property over hotels owing to the comfort, low cost, and additional privacy of these accommodations. In addition, many rental properties accept pets for additional fees or a security deposit and feature fenced backyards.
Furthermore, now that the world has moved on from the pandemic and the economy is recovering, people are eager to spend their disposable income on travel. They are more willing than ever before to spend top dollar to have the ultimate travel experience. This includes paying higher costs for more luxurious vacation rental accommodations. Due to all the above factors, the Vacation Rental industry is in a prime position to grow significantly and be highly profitable over the next decade.
Download the Vacation Rental business plan template (including a customizable financial model) to your computer here <–
Customer Analysis
Demographic Profile of Target Market
Liberty Vacation Rentals will serve tourists who travel to the Boston area. Many of these travelers are affluent, or at least have enough disposable income to travel to this historic city.
Customer Segmentation
Liberty Vacation Rentals will primarily target the following customer profiles:
- U.S. tourists
- International tourists
- Business travelers
Competitive Analysis
Direct and Indirect Competitors
Liberty Vacation Rentals will face competition from other companies with similar business profiles. A description of each competitor company is below.
Boston Rentals
Boston Rentals is a luxury vacation rental company nestled just outside of Boston. They have a total of 10 rentals that all offer luxury accommodations. They are conveniently located near the airport, Boston College, and other popular tourist locations. Tourists who rent out these properties can expect elegant amenities, such as walk-in tiled showers with heated floors, soaking tubs, quality linens, fireplaces, outdoor grills, convenience kitchens, original artwork, XM Radio, Direct Dish Satellite, 32″ plasma flat screens, wi-fi, and large furnished screened in porches.
MA Cottages
Established in 1928, MA Cottages is a collection of individual cabins strewn around Massachusetts. Each one offers a cozy cabin experience but is also equipped with wifi, satellite TV, heating and cooling, and modern bathrooms. Depending on the size, each cottage can accommodate anywhere from 2 to 8 guests. Though many of the cottages are nestled in more rural areas, they still offer easy access to Boston and other historic locations.
Bayside Houses
Bayside Houses is a local vacation rental company that offers house rentals along the bay. The houses can accommodate up to 10 people. Each kitchen is fully equipped and the living rooms have stereo and wifi access. Some houses have pools and other luxurious outdoor amenities. Each home is kept in perfect condition and offers a stunning view of the bay area near Boston.
Download the Vacation Rental business plan template (including a customizable financial model) to your computer here <–
Competitive Advantage
Liberty Vacation Rentals will be able to offer the following advantages over their competition:
- Location: Liberty Vacation Rentals’ location in the downtown area is central to historical landmarks, tourist attractions, corporate centers, shopping districts, and restaurants.
- Business Amenities: All of Liberty Vacation Rentals’ vacation properties have basic business amenities including high-speed internet.
- Management: The management team has years of business and marketing experience that allows the company to market and serve customers in the same manner as its most sophisticated competitors.
- Relationships: Having lived in the community his whole life, Andrew Collins knows all of the local leaders, as well as many of the area’s newspaper reporters and other influencers. As such, it will be relatively easy to build the Liberty Vacation Rentals brand.
Marketing Plan
Brand & Value Proposition
Liberty Vacation Rentals will offer a unique value proposition to its clientele:
- Offering rooms and entire residences suited for tourists and business travelers
- Offering multiple properties for rent in Boston, Massachusetts
- Providing excellent customer service
- Offering properties near the waterfront and historical landmarks
Promotions Strategy
The promotions strategy for Liberty Vacation Rentals is as follows:
Advertisement
Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The company will advertise its products in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.
Website & SEO Marketing
The company will utilize the website and SEO to attract new customers. The website will be easy to navigate and provide all the information and pictures needed to show our properties’ amenities. The SEO strategy will also be managed to ensure that anyone searching “vacation rentals near me” or “vacation rentals near Boston” will see our company listed at the top of the Bing or Google search engines.
Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The company will use social media to develop engaging content, such as educational content about Boston and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.
Special Offers
Offers and incentives are an excellent approach to assisting businesses in replenishing the churn in their customer base that they lose each year. The company will introduce special offers to attract new consumers and encourage repeat bookings, which will be quite advantageous in the long run.
Pricing
The company’s pricing will fluctuate based on the season and occupancy percentages using a computerized yield management system. However, pricing will always place the Liberty Vacation Rentals in the mid-range, below luxury offerings, but above motels and other cheap accommodations in the area. Customers will feel they receive great value when patronizing our vacation rentals.
Operations Plan
The following will be the operations plan for Liberty Vacation Rentals.
Operation Functions:
- Andrew Collins will be the Owner and President of the company. He will oversee all staff and manage the general operations of the company. Andrew has spent the past year recruiting the following staff:
- Jacqueline Miller will serve as the Office Manager. She will manage the office administration and accounts payable. She will also handle much of the marketing efforts until the agency becomes large enough to hire a marketing team.
- John Bell will be the Maintenance Director, who will provide all maintenance at the properties.
- Maria Hernandez will be the Customer Service Manager. She will manage all customer relations, including confirming bookings and answering questions.
- Andrew will outsource professionals to handle the accounting and human resources aspects of the business.
Download the Vacation Rental business plan template (including a customizable financial model) to your computer here <–
Milestones:
Liberty Vacation Rentals expects to achieve the following milestones in the following six months:
5/202X – Finalize purchases of initial vacation rental properties
6/202X – Finish all required maintenance and renovations
7/202X – Kickoff promotional campaign
8/202X – Hire and train initial staff
9/202X – Open Liberty Vacation Rentals
10/202X – Reach break-even
Management Team
Liberty Vacation Rentals’ most valuable asset is the expertise and experience of its founder, Andrew Collins. Andrew has been a licensed real estate broker for over the past 20 years. He has spent much of his career working in different real estate agencies where he specialized in rentals for 5 years before moving to specialize in vacation sales for the next 10 years.
Liberty Vacation Rentals will also employ an experienced assistant to help with various administrative duties around the office and several contractors that will lead the repairs and renovations that need to be done.
Financial Plan
Key Revenue & Costs
Liberty Vacation Rentals’ revenue will come from charging daily fees to customers who rent out our properties. The major costs for the company will include staff salaries, property maintenance, and brand-building. In the initial years, the company’s marketing spending will be high, as it establishes itself in the market.
Funding Requirements and Use of Funds
Liberty Vacation Rentals is seeking a total funding of $350,000 to launch the business. The capital will be used for funding capital expenditures, salaries, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Office space build-out: $50,000
- Office equipment, supplies, and materials: $50,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $50,000
- Working capital: $50,000
Download the Vacation Rental business plan template (including a customizable financial model) to your computer here <–
Key Assumptions
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Annual lease costs: $100,000
- Average annual property maintenance costs: $50,000
- Average number of customers per day:
- Year 1: 10
- Year 2: 15
- Year 3: 20
- Year 4: 25
- Year 5: 30
Financial Projections
Income Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
| Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
| Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
| Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
| Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
| EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
| Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
| PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
| NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
| Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
| Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
| Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
| Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
| TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
| Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
| Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
| Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Investment | ($180,950) | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
| Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
| Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
Vacation Rental Business Plan FAQs
What Is a Vacation Rental Business Plan?
A vacation rental business plan is a plan to start and/or grow your vacation rental business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your Vacation Rental business plan using our Vacation Rental Business Plan Template here.
What are the Main Types of Vacation Rental Businesses?
There are a number of different kinds of vacation rental businesses, some examples include: AirBnB rentals, Luxury rentals, Beach house rentals, and Cabin rentals.
How Do You Get Funding for Your Vacation Rental Business Plan?
Vacation Rental businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a Vacation Rental Business?
Starting a vacation rental business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A Vacation Rental Business Plan - The first step in starting a business is to create a detailed vacation rental business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your vacation rental business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your vacation rental business is in compliance with local laws.
3. Register Your Vacation Rental Business - Once you have chosen a legal structure, the next step is to register your vacation rental business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your vacation rental business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Vacation Rental Equipment & Supplies - In order to start your vacation rental business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your vacation rental business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.