Owning a vacation rental can be a great way to earn extra money. With the right property and a smart approach, you can turn a second home into a rental business that pays for itself.
But success isn’t just about the location. It’s about knowing how much your property can earn and how to run it well.
This guide gives you a clear, step-by-step plan for how to make money on vacation rental property.
Step 1: Find the perfect vacation rental property
We’ll assume the big decision has already been made. The numbers work, you’ve run your mortgage and tax calculations, and you’ve looked into the local regulations. In both the US and the UK, short-term rentals are increasingly regulated, and many councils or municipalities require permits or licenses. Confirming those requirements is the first step.
Next, it’s time to find the property itself:
- US buyers can search Zillow for vacation homes or use sites like Redfin and Realtor.com for local trends and valuations.
Look beyond price when choosing a property. Consider:
- Is it in a year-round tourist destination, or is demand seasonal?
- How close is it to local attractions, transport and amenities?
- Does the property appeal to the type of guests you want to attract? Will it appeal to families, couples, or business travelers?
The vacation property itself is your foundation. But before you commit, you’ll want to know how much money it can realistically earn.
Step 2: Validate income potential with data
Not every second home makes a profitable vacation rental. That’s why it’s critical to check both the property market and the rental data before you buy.
For all investors: AirDNA
Once you know what the property is worth, you need to know what it can earn. AirDNA provides vacation rental analytics for more than 120,000 markets worldwide, including the US and UK. It shows:
- Occupancy rates
- Average daily rates (ADR)
- Revenue per available rental (RevPAR)
- Seasonality and demand patterns
This helps you forecast realistic revenue for your second home, based on what similar rentals are earning in your chosen location.
For UK investors: Property Market Intel
Property Market Intel offers real-time analytics to help you evaluate investment opportunities. You can check comparables (similar, recently sold properties in the same area), sold prices, yields, profitability calculators, and market timing. It also overlays insights directly on Rightmove and Zoopla listings. Use these analytics to make your eventual purchasing decision with greater confidence.
Remember: The goal is to balance affordability on the purchase side with proven income potential on the rental side.
Step 3: Run it like a business with short-term rental software
Even if you’re managing just one second home, using a professional property management system (PMS) will make your life easier and provide guests with a more professional experience.
Here’s what an all-in-one vacation rental software solution should include:
Deep, built-in OTA connectivity
A professional channel manager doesn’t just sync calendars – it auto-maps your updates across Airbnb, Booking.com, Vrbo, Expedia and more. That means your photos, descriptions, amenities, terms & conditions, taxes, policies, fees and extras all update automatically, with no manual input.
Direct booking engine
Secure more revenue and opportunities for repeat business by giving guests a way to book directly with you, commission-free.
AI-powered unified messaging
Manage all guest conversations in one place, no matter where they come from – Booking.com, Airbnb, Expedia, Vrbo, Google, WhatsApp, SMS or your direct booking site. Make sure you’re able to automate communications throughout the guest journey and respond to common queries fast with AI-powered replies and a 24/7 virtual concierge on your website.
Promotions and extras
Run offers to encourage early bookings, longer stays, or guest loyalty. Use your direct booking pages to upsell extras such as excursions, attraction tickets, or late check-outs to increase revenue per stay.
Secure and automated payment processing
Your PMS should connect to a PCI-certified, PSD2-compliant provider with 3D Secure processing. Automating payment processing protects you and reassures guests that your website is safe.
To save time and prevent errors, look for software that enables you to automate the following:
- Deposits
- Validity checks
- Pre-authorizations
- Full prepayments
- Security deposits
- Balance collection
- Refunds
- Cancellation fees
Cleaning and task management
Automatically schedule changeovers assign tasks, and track progress in real time. With integrated cleaning management tools, nothing slips through the cracks. This ensures every guest arrives to a spotless property.
Contactless check-in and check-out
Every guest can arrive and leave smoothly with pre-arrival check-in instructions, secure access codes, and pre-departure invoices or payment instructions. This creates a modern, hassle-free guest experience, while giving you peace of mind that arrivals and departures are handled seamlessly – even if you’re managing remotely.
Invoicing and accounting
A robust PMS should allow you to generate invoices instantly, track taxes, and keep accurate financial records. Automation here reduces human error, saves you hours of admin, and helps you stay fully compliant with local regulations.
Revenue management and smart pricing
Dynamic pricing tools adjust nightly rates automatically based on demand and seasonality, so you can earn more during peak demand and remain competitive in quieter periods. This level of automation ensures your property is always priced strategically, without guesswork.
Customer relationship tools
For continued success, it’s vital to keep track of guest preferences, encourage reviews, and turn one-time visitors into loyal customers. Automated CRM tools make it easy to personalize communications, build repeat business, and grow long-term profitability.
Mobile app access
A feature-rich mobile app version of your PMS enables you to manage bookings, guest messages, payments and pricing on the go – so you’re always in control, wherever you are.
Many of the above tools allow you to automate tasks when managing your short-term rental. Even with a single property, integrated automation tools reduce admin and support exceptional guest experiences.
Step 4: Prepare to scale your business to increase your vacation rental income
Once you’re comfortable managing your second home, scaling into a true vacation rental business is the natural next step. Our guide to growing a short-term rental business shows that successful growth depends on a strong foundation.
As you expand, consider the features and functionality you’ll need to manage multiple properties effectively:
- Bulk management tools: Update rates, availability, policies and promotions across multiple listings in just a few clicks, instead of adjusting each property individually.
- Filterable multi-property calendar: Keep a clear overview of your portfolio at a glance. Smart filters should allow you to drill down by property, date, team member, or status.
- Team adoption: Multi-user systems ensure staff can learn and securely use the platform as you grow, giving everyone confidence and consistency in their workflows.
- Permissions by role: Assign different levels of access for staff, cleaners, accountants or external owners, so that everyone has the tools they need without compromising security.
- Teams and property sets: Group properties into sets and assign them to dedicated teams for more efficient operations, whether you’re scaling to five, fifty, or five hundred units.
- Owner management: If you manage properties for others, transparent reporting and automatic charge and fee processing build trust and credibility with property owners.
- Integrations: Connect your PMS with advanced pricing, cleaning or accounting tools to unlock even greater efficiency and flexibility as your portfolio grows.
Scaling effectively is about keeping control, staying efficient, and building trust. By choosing a PMS that offers these tools from the start, you’ll be ready to grow without the growing pains.
Final thoughts
Successfully making money on a vacation rental property isn’t just about buying in the right location. It’s about validating the income potential with hard data, then managing it professionally so it runs smoothly from day one.
Platforms like Zillow, Rightmove and Zoopla help you find the right property. Property Market Intel ensures the purchase stacks up in the UK. AirDNA shows whether it will truly perform as a vacation rental, anywhere in the world.
And when you’re ready to host guests, an all-in-one property management system (PMS) like eviivo Suite brings it all together: bookings, payments, guest communication, and automation tools.
With the right mix of property searching, market insight, rental analytics, and management software, your vacation home can become a booming business.
Next step
Your Multi-Everything Checklist
Ready to grow beyond a second home? Download the Multi-Everything Checklist — your practical guide to scaling your property management business. From operations to owner relations, it shows you how to keep everything running smoothly as your portfolio expands.
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