2.2 Your VRP Business Plan

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A Better Way to Operate Richard had just left the whole thing alone. He left his VRP to other people who, in the end, were not professional managers. The twist here is it is actually okay to leave your VRP alone if you make good decisions in the beginning. This means doing your due diligence on the management company you choose to work with, for example, and being willing to pay them 30% of your rental income to ensure they take care of business.

I ultimately took Richard over to a paradigm-shifting VRP management company you’ll learn more about in Chapter 9, and introduced him to the owner. You could see the light bulbs going off in his mind. He said, “Oh wow. So, there is a lot of work to this.” He learned how a professional third-party VRP management company makes your residence yours each and every time you return to it. In other words, when you go to that home, your pictures are up. Your bed sheets are on. Your silverware is there. Everything that makes it personal is put in place before you arrive.

When you leave, all of that personal stuff is collected, put in the owners’ closet, and the hospitality items comes out. The bed sheets with the same thread count in every home in the development or resort. The standard towels, the dishes. A skilled third-party management company transforms from your home into a hotel suite for guests. It provides a high level of service.

Ten years after his failed experiment on that lake in Canada, Richard is going to invest in VRP again. But this time, he’ll do it right. He’ll manage the manager, and he will learn his business. Then he’ll go fi shing.

2.2 Your VRP Business Plan

One of the most important things you will do before purchasing a VRP is create a strategic vacation rental business and management plan. This should be a disciplined and thoughtful process, and again, it should occur long before you consider making that fi rst purchase off er. Creating a strict business plan will help you examine the risks

CHAPTER 2

and set in motion a process before you invest. This will provide an exponential increase in your statistical probability of having success in your VRP business.

Your business plan is your strategic battle plan. It includes a set of rules, goals, procedures, and frameworks that will help you to make decisions for your new business and its future. Not only will the business plan help you defi ne the strategy with which you will run your business, but it will also be a useful tool to refer back to time and time again to make sure you are going in the right direction.

What Should You Prioritize in Your Business Plan? We know that with so many things to keep in mind, it could be hard to focus on the most important ones. With the VRP industry growing more and more competitive every day, with more websites opening up and listing your competitors’ rentals, you may be looking for that extra edge. Here are some helpful guidelines to follow:

1. Have fun with it. “Do what you love, and you will never work a day in your life,” as they say. This is a world of vacationing that you are about to enter. Embrace both sides, the fi nancial profi t planning, and the scheduling of the vacations for your family in your vacation home(s). Additionally, you will be speaking with many renters of your home who are looking for that same enrichment that you enjoy in your vacation home. You are, in essence, contributing to maybe the only vacation they get per year. You should feel great about it!

2. You will get out of this experience exactly what you put into it. As in most eff orts in our lives, if you make a half-assed attempt, you will get half-assed results. Invest your time in gaining the knowledge, experience and skills that will make you grow, as your business grows. If you commit to learning, and invest your money and your time wisely, you will reap the rewards, both fi nancially and personally. You do not need to be better than everyone else, only better than you were yesterday. Make your growth in the

WEALTH AS A VACATION

business a daily habit. Divide up all the areas of expertise into categories and study something in each one, every day. Like I said, this book is a good primer, but it’s only the beginning. If you read only this book and call it good, your experience as a VRP investor will not be as good as it could be.

3. Quality will always outperform quantity. You may get some short-term punch from buying several cheap vacation homes, but in the long run it will cost you dearly. Learn about construction, design, and locations. I have overviews on these subjects in later in this book. Use these primers as a stepping stone to search online to understand the impact of these variables. Purchasing a VRP with quality construction and design, as well as more durable furnishings may cost a bit more in the beginning, but it is worth it in the long term. This approach will also allow you to save on marketing as renters will return each year to quality, much more than price.

4. Be surgical in your marketing spending, but be aggressive. Again, I have an entire segment of this book dedicated to the marketing of your VRP. Read through it, then get out there and do more research. This area is changing, adapting, growing, and becoming more sophisticated almost every day. If you sit back and continue to go “old school” (depending on last week’s tactics in this business), you will be left behind. Remember to pursue the online grassroots of advertising. Your Facebook, LinkedIn, Instagram and all the other social and business media platforms are amazing at branding your business. These will supplement all your paid booking engines and listings. Create the “perfect storm” of presence online and you will have more bookings than availability.

5. Determine your sources of funds. Put together your personal fi nancial statement and examine where you have funds that can be applied to VRP investing. Then, look at all the potential avenues of funding open to you, remembering that 401k and IRA funds that are locked into inaccessible accounts may be a source.