For those wondering, "I'm a salaried worker but want to start a side business in vacation rentals （Minpaku). Can I really earn money? Isn't it hard?"
This article delves into why operating a vacation rental is considered a fantastic side businesses and what you need to know to succeed!
Running a vacation rental as a side business isn't just about lending out a room. Behind the scenes, a solid strategy and knowledge are essential.
What You'll Learn in This Article▼
Why vacation rentals(Minpaku) are a fantastic side business
Pros and cons of running a vacation rental as a side business
Things you're missing out on by not knowing about managing vacation rentals
About the Author▶ Air Host Marketing Team
We're experts in vacation rental and hotel management. With a sprinkle of digital smarts, we're here to make things easy for owners and help them earn more. The world of vacation rentals and hotels is changing, and going digital is the way forward. Trust in Air Host: we've got the latest tips and tools to help owners shine in their business.
The reasons why a vacation rental(Minpaku) side business is fantastic include:
There's a certain level of entry barrier
It's a safe and secure side job
It offers flexibility
There's a chance to attract customers from all over the world
It's easier to earn a steady income
It can easily contribute to local revitalization
It's a business where semi-passive income is achievable
Let's take a closer look.
The reason vacation rentals are a great side hustle is that there are certain hurdles to get started. You need to follow specific legal rules to set up a rental, which can be a bit daunting for some people. This means fewer folks jump into the business, so there's less competition.
With fewer people to compete with, you have a better shot at getting guests and making more money.
Plus, these hurdles help keep the quality of rentals high. You have to work hard to offer a place that's safe and comfy while sticking to the rules.
So, because of these hurdles, not as many people get into vacation rentals, which means you've got a better chance to stand out and do well if you're up for the challenge.
Vacation rentals have evolved from being seen as "dodgy back alley lodgings" to becoming recognized as trustworthy accommodation options. This shift is largely due to the government implementing specific regulations for vacation rentals, allowing them to be operated legally.
For instance, there are set rules that owners must follow, such as fire safety measures and consideration for neighbors.
It's precisely because of these established rules that guests can stay with peace of mind, and owners can run their business safely and within the law. As a result, vacation rentals are becoming a clean and respectable side business option.
Understanding Fire Safety Regulations in Vacation Rental Operations: Insights from a Pro (Coming Soon)
Remember the 180-Day Rule When Running a Vacation Rental (In Preparation)
Vacation rentals offer a high degree of flexibility, as long as you operate within the legal framework and rules. For example, you can style an urban property like a shared house or renovate an old country house.
Additionally, when not used for vacation rentals, these properties can serve as personal vacation homes or second houses, offering a dual-purpose advantage.
Operating a vacation rental in Japan opens up opportunities to target tourists from all over the world.
Particularly now, with the yen's depreciation, what might seem expensive to Japanese might not feel as costly to foreigners.
Moreover, tourists from Europe and other regions often stay in Japan for extended periods. They tend to prefer accommodations where they can relax as if at home, rather than luxury hotels. This preference can lead to longer bookings, which translates to higher revenue.
Thus, while operating within Japan, there is a chance to earn an income comparable to international standards.
Compared to businesses that require setting up a new storefront, vacation rentals don't demand a significant initial investment. Plus, attracting guests is as simple as registering with a booking website.
This method allows for automatic reservations from guests, eliminating the need to build a customer base from scratch, which is a considerable advantage.
However, it's essential to make an effort to showcase the appeal of your rental through good reviews, ratings, and attractive photos. Satisfying guests can increase the likelihood of them becoming repeat customers.
How to Power Up Your Guest Attraction Strategy for Vacation Rentals (Coming Soon)
Vacation rentals also serve as a business that can boost local tourism.
Through vacation rentals, you might be able to promote the local area's charm.
With AirHost's "AirHost ONE," you can even broadcast the local allure through custom menus.
You might be able to provide guests with valuable local information that's not available anywhere online!
If your side business in vacation rentals leads to local revitalization, it could also bring a sense of fulfillment.
Check AirHost ONE
Did you know that local governments provide grants and subsidies to vacation rental operators to boost tourism?
You can find information about subsidies for opening accommodation facilities and ICT adoption on the official websites of the Japan Tourism Agency or local governments.
Reference Site: Tourism Agency | Tokyo Tourism Foundation
List of Grants and Subsidies for Vacation Rental Operations (2024 Edition) Coming Soon
By incorporating operational support services that leverage digital transformation, it's possible to achieve semi-passive income.
Examples of operational support include:
Marketing: Support in presenting your property in a way that entices guests to click.
Price Optimization: Setting property prices to maximize revenue while considering the season and demand.
Guest Support: 24/7 support for inquiries and troubleshooting.
Cleaning Arrangements: Scheduling cleaning and linen exchange.
Automation: Implementing smart locks, 24-hour check-in, and unmanned reception.
AirHost is currently offering comprehensive operational support that covers the above services.
If you can skillfully integrate operational support, you can reduce the effort of management while efficiently overseeing more properties.
Aim for Smart Operation with Vacation Rental Management Services (Coming Soon)
Running a vacation rental as a side business isn't all positives, naturally.
Operational costs can be significant.
Measures to avoid troubles are necessary.
Revenue can be unstable at times.
Let's take a closer look at each of these points.
Managing a vacation rental can be more labor-intensive than expected.
Think of the accumulation of daily tasks such as reservation management, communication with guests, cleaning, and pricing.
Especially during peak seasons, the consecutive check-ins and outs, along with guest inquiries, require immediate attention.
To significantly reduce these efforts, utilizing a property management service can be effective.
Check out AirHost's One-Stop Operational Support
Be aware of the risks involved in running a vacation rental, such as disputes with guests, property damage, and issues with neighbors.
For instance, guests might damage the property during their stay, or noise complaints might be filed by neighbors.
Preparing a guidebook can be an effective way to prevent such troubles.
It's crucial to have measures in place to prevent issues and to be prepared with response strategies if they do occur.
What Kind of Troubles Can Occur in Vacation Rental Operations? Strategies to Handle Them (Coming Soon)
Why It's Complicated Without a Guidebook (Welcome Guide) in Vacation Rentals (Coming Soon)
The revenue from vacation rental operations can fluctuate significantly due to social circumstances, travel seasons, and local events.
For example, during the off-season for tourism or months without major events, reservations may decrease.
It's essential to anticipate these fluctuations and devise strategies for stable operations.
Additionally, the new vacation rental law includes a "180-day rule."
Under this law, operations cannot exceed 180 days per year, even as a side business. (Some local governments may set shorter periods than 180 days.)
As an operator, it's necessary to comply with this rule and plan your operations carefully.(For example, renting out the property as a weekly or monthly mansion during the off-season.)
Remember the 180-Day Rule if You're Going to Run a Vacation Rental (Coming Soon)
Let's share some key points to ensure success in managing a vacation rental as a side business.
Do not compromise on location and property selection.
Conduct local research and consult with professionals.
Analyze using actual feedback and data.
Let's see these points in detail.
Since the location and property directly affect guest satisfaction and repeat rates, you should not compromise on these, even for a side business.
If I were to make a recommendation, operating a vacation rental as a side business is particularly advisable with standalone houses or traditional homes.
Compared to apartments, standalone houses or traditional homes tend to have less competition and higher profit margins. Additionally, they often come with fewer neighborhood issues and lower operational costs.
It's also beneficial to articulate the concept of your vacation rental. Set a clear target audience and strive for differentiation.
(For example: a vacation rental offering a farming experience, a traditional house where guests can fish, or a rental with an antique ambiance.)
By not compromising on property selection and opting for standalone or traditional homes, you can pave the way to success.
5 Tips for Crafting a Vacation Rental Concept! (Coming Soon)
In addition to gathering information yourself, it's crucial to seek the opinions of experts.
Some local governments have their own unique rules for vacation rentals, so preliminary research is necessary.
Moreover, incorporating advice from vacation rental professionals and successful operators can make the path to success in the vacation rental business much shorter.
Since monthly income from vacation rentals can be unstable, it's important to plan carefully.
Under the new vacation rental law, you can only operate for 180 days a year. For the remaining 185 days, you cannot operate as a vacation rental.
Think about how to make good use of the periods when you cannot operate.
(For example, renting out as a weekly or monthly mansion.)
Valuing the opinions of guests and other operators is also important.
Feedback from guests and information exchange with other operators can be a valuable source of information for improving services.
Additionally, the numbers that demonstrate the results of your operation will clearly tell you where improvements are needed.
If you're considering operating a vacation rental as a side business, don't forget to check the following:
Confirmation with your employer
Tax measures and tax filing
Whether it can be balanced with your main job
Let's take a closer look.
Check with your employer to see if side jobs are permitted.
Unauthorized side jobs could potentially lead to problems later on.
The amount deducted for resident tax may change, which could reveal your vacation rental income to your employer.
To avoid unnecessary worries, first confirm and consult whether you can have a side job.
Income from vacation rentals is subject to tax, so proper management and tax filing are necessary.
Understand the income patterns when operating a vacation rental as a side business in advance.
Is tax filing necessary for vacation rental operations? Are you sure about the income category? (coming soon)
Consider whether you can balance the vacation rental side job with your main job.
Can you properly manage cleaning, laundry, guest support, and reservation management without any issues?
If you're considering balancing it with your main job, using a management service is also a viable option.
To succeed in the vacation rental business as a side job, proper knowledge and preparation are necessary.
From property selection to tax management, operational costs, and simulation, make sure to plan carefully!
If it's difficult, consulting with a professional is also a wise choice.
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