VRBO: Pros and Cons of Investing

The VRBO industry can be incredibly lucrative, and a fantastic investment opportunity! However, it's important to weigh the potential risks and rewards, and know exactly what you're getting yourself into. Vacation rentals by owner, (VRBO), is an industry that has exploded in recent years. More and more travelers are opting for the convenience and affordability of renting a beautiful private home or apartment instead of a traditional hotel. For new and experienced investors, this business approach presents a potentially lucrative opportunity! In this article, we'll get into exploring the VRBO industry and detail a few things you need to know before investing.

WHAT IS VRBO?

The VRBO industry, which is an acronym for, and also known as the vacation rental industry, is a type of temporary travel lodging where travelers can rent private homes, apartments, or other properties directly from the owner themselves. This interesting industry has grown incredibly rapidly in recent years. This is of course thanks in part to the rise of online platforms like Airbnb and HomeAway that make it incredibbly easy for property owners to list and rent their luxury homes to travelers. As an industry, VRBO offers a range of benefits for both travelers and property owners! But before you invest, you need to know exactly what you're getting into.

PROS

Investing in the lucrative VRBO industry can offer a wide range of benefits for property owners! One of the biggest advantages in this particular industry, is the potential for high rental income! Vacation rentals can often command much higher rates than traditional long-term rentals and even hotels, depending on the amount of luxury being offered. Additionally, VRBO gives property owners more control over their rental properties, including setting their own rental rates, customizing the experience for the guests, and even choosing their own guests. Finally, investing in VRBO can offer a truly unique and creative opportunity to diversify your investment portfolio, and if you do it right, earn loads of passive income.

CONS

While you're investing in the VRBO industry, it's great to have a well-rounded view of the industry. This investment opportunity can offer many benefits, but of course, there are also potential drawbacks to consider before making the leap. One of the biggest risks is the potential for high vacancy rates, particularly during off-seasons, if there's issues in the neighborhood or home, or in areas with high competition. Additionally, property owners may face higher maintenance and cleaning costs, especially if you want to offre a fantastic experience to your guests. These factors are important to consider, as well as the need to constantly update and refresh their rental properties to attract new guests, and keep consistent ones coming. Finally, when you're investing in VRBO, you'll be required to fulfill a significant upfront investment. This is an entry fee that may not be feasible for all investors.

TIPS FOR SUCCESS

Despite all of the potential risks, investing in the VRBO industry can be a super lucrative opportunity! If done correctly, you'll be making a bunch of passive income, and have the opportunity to get creative in the interior design. One big tip for success is to carefully research the market, seek out people who are experienced in the field, and choose a location with high demand and low competition. It's also important to set realistic rental rates, and be realistic about what your market value is when you first get started. It's important to have a solid marketing strategy in place to attract guests. Additionally, when investing in a property management company, it can help to alleviate some of the maintenance and cleaning responsibilities!

IS IT RIGHT FOR YOU?

Ultimately, the decision to invest in the VRBO industry depends on a few incredibly important factors. Your individual financial goals, risk tolerance, and level of commitment will all have a massive impact on if you can and should get into the VRBO industry. While there are certainly potential rewards, such as gaining passive income and long-term appreciation, there are also plenty of risks. These risks range from things such as market fluctuations and unexpected expenses. It's incredibly important to carefully weigh the pros and cons and consult with a financial advisor, and experienced parties before making any of these important investment decisions.