How to Invest Wisely: A Guide to Buying an Airbnb or Vrbo Property

Owning a vacation rental property is becoming one of the most popular ways to earn extra income while building equity in real estate. Thanks to platforms like Airbnb and Vrbo, renting out a short-term property has become much more accessible—not just in big cities or tourist hotspots, but also in small towns, countryside retreats, and unique off-the-grid locations.

But let’s be real: it’s not as easy as just buying any house and listing it online. Owning a short-term rental takes research, careful planning, and a good understanding of what works (and what doesn’t). Here’s everything I’ve learned about investing in vacation rentals so you can get started the right way.

Why Are Short-Term Rentals So Popular?

First, let’s look at why this market is booming and why so many people are diving in.

1. Short-Term Rental Trends

Over the last decade, short-term rentals have exploded in popularity. Travelers love the personal touches, privacy, and unique stays they offer compared to traditional hotels.

Airbnb, for example, is known for quirky spaces like tiny homes or treehouses, while Vrbo tends to attract families and larger groups looking for entire vacation homes. Both platforms are growing fast and make it easy for property owners to connect with guests.

2. Why It’s a Good Investment

Short-term rentals often bring in more income than long-term rentals, especially in places that attract tourists. Plus, when your property isn’t rented out, it can double as your personal vacation spot.

Another thing I love? Hosting can have a positive impact on the community. It’s a great way to share what makes your area special while helping boost local tourism.

Do Your Homework

If you’re thinking about jumping in, it’s important to do some research first.

1. Pick the Right Market

Location matters—big time. A great house in the wrong spot won’t get booked. Look for areas with steady tourist activity, whether it’s a beach town, mountain retreat, or even a hidden gem that’s growing in popularity.

Use tools like AirDNA or Mashvisor to find information on nightly rates and occupancy levels in different locations. It’s also helpful to check local tourism websites or economic reports for trends in the area.

2. Check the Rules

Not every town welcomes short-term rentals with open arms. Some have strict rules, like limits on how many nights you can rent out or special permits you’ll need.

Call the local city office or talk to a real estate lawyer to make sure you’re following all the rules. It’s better to know upfront than to run into trouble later.

Crunching the Numbers

A big part of investing in short-term rentals is knowing the costs and potential profits.

1. Budget for Everything

Start with the basics, like the down payment, closing costs, and any renovations to make the property rental-ready. Don’t forget about ongoing expenses like cleaning services, utilities, property management, insurance, and taxes.

And here’s a tip: always leave room in your budget for surprises. Unexpected repairs (like a broken water heater) happen more often than you think.

2. Estimate Your Income

Look at how much similar properties are earning in the area to estimate your potential income. Keep in mind that bookings can drop during the off-season, so don’t assume every month will bring in the same amount.

Use tools like AirDNA’s Investment Explorer to figure out if the numbers work—and whether you’ll actually see a good return on investment.

Finding the Perfect Property

Once you’ve done your research and crunched the numbers, it’s time to look for the right property.

1. What to Look For

Think about what guests want. Is the property close to popular attractions? Does it have features like multiple bedrooms, a hot tub, or great views? These extras make your listing more appealing and can help you charge higher rates.

At the same time, don’t overlook the basics. Properties that are clean, well-maintained, and ready to rent will save you time and stress.

2. Inspect Before You Buy

Always inspect a property before making an offer. Ask questions about the condition of the home, and hire a professional inspector to check for any hidden issues.

If you’re not familiar with the area, work with a real estate agent who specializes in short-term rentals. They’ll know what works in the market and can guide you to the best options.

Getting Your Rental Ready

After you’ve bought your property, the next step is turning it into a space guests will love.

1. Create a Cozy, Inviting Space

Furnish your rental with comfort and style in mind. Add personal touches like cozy blankets, local artwork, or a welcome basket with snacks. Safety is a priority too—make sure the property has smoke detectors, carbon monoxide alarms, and secure locks.

2. Market Your Listing

First impressions matter! Use high-quality photos and write a detailed description for your listing on Airbnb, Vrbo, or wherever you plan to advertise. Highlight what makes your property unique and why guests will love staying there.

Promoting your rental on social media or working with local businesses (like tour guides) can also help get more bookings.

Be a Great Host

Owning the property is just one part of the job. To keep your guests happy (and your reviews glowing), you’ll need to focus on being a great host.

1. Communicate Clearly

Quick responses and clear communication go a long way. Send guests all the info they need for their stay—like check-in instructions—and be available to answer questions.

Little touches, like a handwritten welcome note or local recommendations, can make a big difference.

2. Handle Reviews Professionally

Guest reviews are everything in this business. Encourage happy guests to leave reviews, and handle any negative feedback calmly and professionally. Positive reviews build trust, while a good response to criticism shows future guests you care.

Final Thoughts

Owning a vacation rental can be an exciting and rewarding investment, but it’s not something to rush into. Take the time to do your research, understand the market, and make sure the numbers work for you.

At the end of the day, it’s not just about earning money—it’s about creating a space where guests can make lasting memories. And who knows? Your rental might just become someone’s favorite vacation spot.

Have questions or tips to share? Let’s chat—We’d love to hear your thoughts!