The vacation rental industry has experienced exponential growth during the past decade due to the popularity of short-term rental platforms and apps. Globally, this market is valued at USD 109.76 billion in 2022, according to Grand View Research. The industry is predicted to grow further, with a compound annual growth rate (CAGR) of 11.2 percent from 2023 to 2030. It’s no wonder that property managers and owners are eager to capitalize on this lucrative industry. 

While a lot of people view the vacation rental business as an opportunity to gain passive income, nothing could be further from the truth. The reality is that managing your vacation rental property is essentially like having a hotel of your own where you need to check in and check out your guests constantly. In between, you have to take care of the maintenance and cleaning to ensure that the next guest has an immaculate space to enjoy.

That said, there’s money to be made as long as you avoid mistakes in managing your vacation rental property. To give you an idea, here are some pitfalls to avoid:

1. Disregarding Local Laws and Regulations

One of the gravest errors vacation rental property owners can make is disregarding local laws and regulations governing such properties. From zoning restrictions to occupancy limits and tax requirements, failure to comply with legal obligations can lead to fines, legal disputes, and even forced shutdowns. 

In New York City, for instance, the mayor rolled out the prohibitive Local Law 18 in 2022, which curbed the operation of short-term rentals in the city. In the new regulations, short-term rentals are required to be registered with the mayor’s Office of Special Enforcement (OSE) before they can list short-term stays on online travel agents (OTAs) like Airbnb and

To avoid these types of issues, take the time to familiarize yourself with the laws in your area, and ensure your rental property operates within all legal parameters.

2. Overbooking Your Rental Property

Overbooking is a nightmare scenario for any vacation rental property manager. It can lead to disgruntled guests, negative reviews, and damage to your brand’s reputation. 

You can prevent overbooking by using a vacation rental channel manager, a software solution that synchronizes rates, calendars, and listings across multiple booking platforms, or OTAs. This rental management solution virtually eliminates booking errors, which is a common occurrence when you have to manually log into each platform to check your bookings. 

3. Accepting Every Booking

While it may be tempting to accept every booking that comes your way, it’s essential to consider the potential consequences. First, you have to screen your guests. Do they appear to be looking for a venue for a party that could turn rowdy? Could they be renting your place to do something illegal? Do they have bad reviews from other hosts? While making a full background check on a short-term renter can sometimes be a hassle, you can still ask questions about their plans for their stay. If the guest is being evasive, it may be a red flag to watch out for.

Another reason to reconsider a booking is to optimize profits, especially if you don’t have multiple rooms or properties to rent out. Ideally, you would want to choose the booking that gives you the most profit. To illustrate, if a guest books their stay on just a Sunday, you lose the chance to offer your property for a full weekend, which is typically the day when you can charge the most for your rental.

Accommodating incompatible guests or compromising property standards can result in a drain on your profits. As such, establish clear booking criteria and policies to ensure a positive experience for both yourself and your guests.

4. Doing Everything Yourself

If you own a vacation rental property, you might be tempted to do everything yourself to save on cost. While this is understandable, you have to realize that managing properties tends to take a lot of time and effort. If you also have a full-time job while managing your vacation rental business on your own, you can easily burn out, which will compromise both your job and your business. 

Before it comes to that, find ways to outsource different tasks such as cleaning, maintenance, and guest communications. Hiring a professional property manager may cost you some of your profits, but it’s well worth the cost when you consider the hassle of doing everything yourself. Also consider adopting vacation rental software, which should help you streamline your operations, automate many of your tasks, and enhance guest experiences, ultimately saving you time and maximizing your rental income.

5. Limiting Your Exposure to Just One Platform

Don’t limit your property’s exposure by listing it on only one vacation rental platform. To maximize visibility and reach a broader audience, consider listing your property on multiple online travel agencies (OTAs), such as Airbnb, VRBO, and Furthermore, utilize channel management tools to effectively manage listings across different platforms.

To increase your property’s online exposure, you can also set up a business profile for your property on different social media platforms. Regularly, update these profiles with content featuring your property. 

6. Neglecting to Ask for Reviews

Guest reviews play a vital role in building credibility and trust, and in attracting future guests. According to data from PhocusWire’s US Short-Term Rental Report 2021, 29% of consumers check guest reviews when comparing properties with similar characteristics. In addition, 40% of remote workers who travel consult reviews of other remote workers when it comes to renting short-term vacation properties.

To shore up your property’s reputation, you can encourage your guests to leave reviews by providing exceptional experiences, sending follow-up emails, and offering incentives. Also monitor these reviews and respond to feedback promptly, whether they are positive or negative, to demonstrate your commitment to guest satisfaction.

Successfully managing a vacation rental business requires diligence, attention to detail, and a commitment to excellence. You can enhance the guest experience, maximize profitability, and build a great reputation by avoiding these common mistakes. 


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