There’s more than one way to succeed in the vacation rental industry. Some professionals start by purchasing investment properties. Others lease strategically located homes and offer them as short-term rentals. Many begin by managing properties on behalf of owners who want the income but not the day-to-day workload.
Whichever model you choose, the key to long-term success is treating your operation like a business from the beginning. That means setting up efficient systems, offering a seamless guest experience, and knowing the trends in the vacation rental industry to make informed decisions that support growth.
In this guide, we’ll walk through the most common business models, the essentials you need to have in place before you go live, and the tools and strategies that help professional Property Managers scale sustainably.
Choosing the Right Business Model
One of the first decisions you’ll need to make is how you want to structure your business. Here are three proven approaches:
Buy and Operate
This is the traditional investment path. You purchase one or more properties and manage them as short-term rentals. It requires more capital upfront but gives you full control over the asset and long-term equity. Investors often start with a single property and expand into a portfolio using data to identify high-performing markets.
Although it’s not the most common model, many of the Property Managers we work with at 365Villas follow this approach, and it can be very profitable if you have the capital to get started.
Lease and Rent
Rental arbitrage has become increasingly popular in urban markets. According to AirDNA, over 20 percent of new urban listings in 2024 followed this model. This approach involves leasing properties long-term, furnishing them, and offering them as short-term rentals. It allows for faster scaling with lower upfront investment, but success depends on strong lease agreements, careful market selection, and full compliance with local regulations.
Property Management or Co-Hosting
This is the most common model among short-term rental professionals and often the easiest way to get started, since it doesn’t require any upfront investment in property.
Instead of owning or leasing homes, you grow your business by managing or co-hosting properties on behalf of others. As a co-host, you might start by helping an existing host manage bookings, guest communication, or cleaning coordination. Over time, this can evolve into full-service property management.
It’s a service-based approach where strong performance reporting, smooth operations, and a great guest experience are key to retaining clients and growing through referrals.
Many of the Property Managers we work with at 365Villas started with just a few properties, sometimes as few as five, and scaled to managing 50 or more in a relatively short period of time. When you deliver great results, word of mouth becomes your most powerful growth tool.
To get started, consider offering your services to someone in your network or reaching out to hosts already on platforms like Airbnb who may need help managing their listings more efficiently.
Set the Foundation for Long-Term Success
Regardless of which model you follow, success comes from careful preparation.
Understand Local Regulations
Before you list any properties on online travel agencies, make sure you’re compliant with local laws. This includes things like business licenses, registration requirements, occupancy limits, and tourist taxes, which vary by market and can change frequently.
Create a Professional Setup
From furnishings to Wi-Fi speed, every decision impacts your guest experience. Invest in the essentials and create a space that’s functional and comfortable. Listings with professional photography can earn up to 40 percent more than those without.
Build a Financial Plan That Matches Your Model
Your startup costs, operating expenses, and revenue model will vary depending on whether you buy, lease, or manage properties. Define your goals and forecast monthly and annual targets, factoring in technology subscriptions, cleaning, maintenance, taxes, and potential seasonality.
Use the Right Technology from Day One
A proper Vacation Rental Software and a Channel Manager are foundational for managing bookings, calendars, guest communication, and performance tracking. The right solution helps you scale without chaos.
Build Your Brand and Website
Your website is one of your most important assets. It gives you full control over your branding and helps position you as a serious business, even if you only manage a few properties.
If you promote your properties through social media, directing traffic to your own website is far more effective than sending potential guests to platforms like Airbnb, Booking.com, or Vrbo, where you also pay high commissions.
Each Property Management Software offers a different website solution, and choosing the right one is essential. Otherwise, you may face high switching costs later on. At 365Villas, we use a WordPress-based solution, giving you the flexibility to scale and the ability to customize your site as your business grows. WordPress is one of the most widely used and trusted platforms in the world, and it’s known for its SEO-friendliness, which helps improve your visibility on Google.
Plan for Guest Experience from the Start
A consistent, thoughtful guest experience improves reviews, boosts visibility, and drives repeat bookings. Start strong by making these elements a priority:
- Use smart locks and clear instructions for seamless check-ins
- Offer fast Wi-Fi, blackout curtains, and comfortable beds
- Provide extras like welcome notes or local guides
- Use automated messaging to answer questions before they’re asked
- Maintain strict quality control over cleaning
For a more elevated communication strategy, connect with guests through WhatsApp.
Track, Adapt, and Improve
Success comes from learning what works and doing more of it. Monitor metrics like occupancy, average daily rate, and revenue per available night. Test pricing strategies and adjust amenities based on guest feedback. Leveraging data with the right tools, this becomes part of your regular operations.
Scale with Purpose
Once your systems are solid and your listings are performing well, you’re ready to grow. That could mean taking on more owner clients, adding leased units, or buying new investment properties. The key is doing it in a way that protects quality and profitability.
- Standardize your operations
- Build a network of reliable contractors
- Offer consistent branding and service across every property
- Stay selective and strategic in what you take on
For more expert advice on growing sustainably, listen to the podcast episode where our CEO, Dave Payette, shares practical strategies and lessons learned.
The Right Software Makes All the Difference
Scaling a vacation rental business isn’t just about adding more properties. It’s about doing it efficiently, sustainably, and profitably. The software you choose should streamline operations, adapt to your workflows, and integrate with the tools you already use to grow.
At 365Villas, we support professional Property Managers in over 60 countries with a comprehensive All-in-One platform that includes PMS, Channel Management, Website services, Accounting, GuestApp, and an extensive Integrations Marketplace.
With customizable features, time-saving tools, and hands-on support, we help clients run their business their way while maximizing results. If you’d like to see how 365Villas can support your success, book a free demo today and let us show you what the right software can do for your business.
