How Does VRBO Vacation Rental Work?

Vrbo is one of the top vacation rental platforms out there today. But what is it really, and what can it do for you as a rental property investor?

As someone interested in starting a rental property business for short-term stays, you must know how a specific platform works and what it offers. While several impressive options exist, what makes this particular platform stand out?

Table of Contents

1. What Is Vrbo?
2. How Does Vrbo Work for Hosts?
3. Getting Started With Vrbo Vacation Rental Listings: 6 Easy Steps
4. 10 Alternatives to Vrbo and How They Stack Up Against It
5. Mashvisor: The Best Tool for Finding Ideal Rental Properties

In many cases, a vacation rental business’s success largely depends on the platforms they are on. Many short term rental owners list their properties on several sites to increase their online visibility and exposure. One of the most popular platforms for vacation rental owners and guests is Vrbo.

In this article, we will take a closer look at Vrbo as a short-term rental platform and discuss how hosts and investors can use it to their advantage. We will also explore other similar options and find out how to spot the best rental properties to use as vacation rental homes. 

What Is Vrbo?

Vrbo is an online platform that lets users book rental properties for short vacations from rental property owners and managers. It stands for “Vacation Rentals by Owner.” This vacation rental platform works similarly to Airbnb. Users can book vacation rentals for short periods online as more affordable alternatives to expensive hotels and resorts. 

The great thing about this particular solution is that it gives users a wide range of vacation rental homes to choose from. The choices include the following: 

• Single-family homes
• Condo units
• Apartment units
• Townhouses
• Cabins
• Beach houses and a whole lot more

Would-be hosts need to know that Vrbo is much stricter than other short-term rental platforms. This is especially true when it comes to shared letting. It only allows you to rent out entire properties and prohibits shared houses and rooms, unlike Airbnb, which gives you shared options.

Vacation rental sites like Vrbo remain among the most popular and trusted choices for short-term rental property bookings. The platform, launched in 1995, continues to pair homeowners with folks who want to find a vacation home to stay in while on a trip. 

The vacation rental platform is now considered a major global brand, with over two million vacation homes in 190 countries worldwide.

The company attracts loyal users, especially since it offers vacation rental insurance. The insurance protects guests’ payments against fraud and provides rental property owners with liability insurance. 

No wonder Vrbo continues to make a loud noise in the vacation rental industry. 

How Does Vrbo Work for Hosts?

As a business model, Vrbo operates similarly to another popular vacation rental platform, Airbnb. It connects folks looking for alternative vacation accommodations. The rental properties include apartments, cottages, condo units, beach houses, and pretty much any property that owners are willing to rent out for short-term stays. 

Vacation rental listings are pretty popular accommodations of choice. Compared to hotels, they are much more affordable and offer certain amenities and features that expensive hotels don’t. 

For rental property owners, Vrbo rental homes are an excellent way to establish a passive income source. It allows them to build equity and wealth, especially if their properties are in hot real estate markets. 

Let’s take, for instance, the Florida rental market scene. The Sunshine State has been one of the hottest real estate markets in the US for several years. Real estate website Mashvisor regularly updates its rental market database, including short term rental data on Florida. 

According to Mashvisor’s April 2023 data, Florida’s short-term rental market shows a good cap rate of 2.41%, decent cash on cash return rate of 2.37%, and a healthy average monthly vacation rental income of $2,904.

An investment property with a vacation rental agreement in Florida will likely make a good return on investment for its investor and host. And since Vrbo vacation rental property listings aren’t just limited to the US market, listing a property on the platform provides excellent exposure. 

Because of the high-level exposure—with over 48 million users globally having access to the platform–rental property owners find it a very worthwhile platform to list and advertise their vacation rentals. 

Getting Started With Vrbo Vacation Rental Listings: 6 Easy Steps

Real estate investors who wish to get a piece of the Vrbo action can list rental properties on the platform in six easy steps.

1. Find the Right Rental Property 

The most important thing an investor needs when listing a vacation rental property on the platform is to find the right investment property. There are several ways of looking for the right rental property. However, modern-day investors recognize the greater potential of using technology to their advantage. 

This is where a real estate investment platform like Mashvisor comes in. Mashvisor has helped tens of thousands of real estate investors make the wisest investment decisions since 2014. The website gives you access to information and tools to find suitable real estate properties that match your needs and goals.

You just need to log onto Mashvisor to search for potential income-generating properties in your chosen location. Afterward, you can perform an investment property analysis for every property you’re interested in. The site is easy to use, making navigation such a pleasant experience for both newbies and experienced investors. 

Some of its newest features are:

Market Finder

Mashvisor’s Market Finder feature takes property search to a whole new level. Instead of just looking for good investment properties in a particular area, it allows you to look for the most profitable rental markets in any location you choose. 

Searching for good income-generating properties is much easier, especially since you can now easily compare multiple rental markets side-by-side. The tool gives you a bird’s eye view of your preferred location so you can see which neighborhoods are worth investing in. You can use filters to customize your search and narrow it down only to the ones worth your time. 

Dynamic Pricing

As a vacation rental property investor, you must understand how important setting nightly prices is. It is the lifeline of your business. However, setting nightly rates can be quite challenging, especially if you’re not intimately familiar with the territory.

Mashvisor’s Dynamic Pricing taps into its database, allowing you to automate your pricing to make things easier for you. The tool factors in data from rental comps, community events, and other important local information needed to set reasonable nightly prices. 

New and seasoned Airbnb investors and hosts will surely get a kick out of this new tool as it makes managing short term rental properties much easier and more efficient. This works for those who have multiple Airbnb accounts and properties. It eliminates the need to switch from one account to another to update and manage listings.

Get access to Mashvisor’s Market Finder, Dynamic Pricing, and other tools to get you on your way to a thriving real estate investing career. Get started on your 7-day free trial today.

2. Register as a Host on the Platform

Registering as a host on the platform offers several advantages. The platform provides its users with more flexibility regarding its fees. 

Compared to its competitors, it allows hosts to select their fees. Users have two choices: a one-time payment of $499 or a 5% per-booking fee plus a 3% credit card processing fee. 

Depending on how much you want to operate, one of the two fees can be more suitable for your situation than the other.

3. Check Local Ordinances on Short Term Rentals

Owning a vacation rental property can be financially rewarding, but not all locations welcome short term rentals with arms wide open. In fact, many places are cracking down on vacation rentals. So before you buy a property to list on short term rental platforms, make sure to check in with the local government first to see their short term rental regulations. 

4. Create an Ad and Start Marketing Your Property

Once you’re officially registered, you can start creating your vacation rental listings and marketing your property to generate enough momentum to give you a healthy positive cash flow. 

Expect to get messages from guests who want to ask questions about a property, its rates, and its availability. Be sure to respond to those messages and inquiries promptly. 

5. Come Up With Rules and Nightly Rates

Investors who do their homework will get a good idea of how to set nightly rates. It is why a rental market analysis is critical. Obtaining the correct information and relevant data will help investors come up with the most ideal and competitive nightly rates for their rental properties.

On the same note, investors should also list a concrete set of rules that address proper guest behavior and etiquette for their entire stay on the property. 

If you’re not good with words and find it hard to compose messages, you can use apps like ChatGPT. You could also ask a friend or family member for help in writing automated responses.

6. Publish Your Listing

Once you’ve done all the previous steps, you may now publish your listing, entertain inquiries, and start earning money.

If you want to know more about listing your vacation rental property on Vrbo, IGMS has a full guide on creating Vrbo listings.

10 Alternatives to Vrbo and How They Stack Up Against It

Vrbo vacation rental site isn’t the only one of its kind. Several other websites offer guests and investors the same services and investing opportunities. That said, here are other vacation rental sites:

1. Airbnb

Among all of Vrbo’s competitors, Airbnb is perhaps the one it is most compared with. After all, they pretty much share the same features and cater to the same target market. The only difference is that Airbnb allows shared housing, unlike Vrbo, which makes starting a vacation rental business much easier. 

2. FlipKey

Just like the top two platforms, FlipKey comes with an abundance of vacation rental inventory all around the world. Since TripAdvisor is its parent company, this helps generate business for rental properties listed on it. Its inventory includes plenty of bigger properties that are perfect for small groups of travelers. 

3. TurnKey

One of the main advantages of TurnKey as a vacation rental platform is that it no longer uses key exchanges, fully utilizing the door code system. It gives you the freedom to come and go as you please without worrying about misplacing or losing a key. 

All you need to obtain a door code is to download an app, which you can also use to find the best dining and entertainment spots in the place you’re visiting. It is one feature most vacation rental platforms don’t offer their users. 

4. Plum Guide

If you’re looking for the absolute best vacation rental properties, Plum Guide is the app for you. Its strict vetting process ensures that only the highest quality and exquisite properties are on the platform. The platform offers outstanding customer support in addition to providing the most luxurious vacation accommodations. 

5. Booking.com

Unlike Vrbo and Airbnb, Booking.com allows you to find not just vacation rental homes but book hotels, too. However, unlike the two rental platforms, the booking process on Booking.com is very similar to that of a hotel room online. 

There is no host-guest interaction whatsoever. So, you cannot chat with a host to know more about the place or make special arrangements for your visit.

6. Outdoorsy

Individuals into life on the road will get a kick out of Outdoorsy, the RV and campervan equivalent of Vrbo. With over 14 million RV rentals, you can enjoy a vast array of choices. You can choose which mobile home will fit your needs and preferences for a road trip.

7. Homestay

Homestay is a rental platform that gives you a more personalized and authentic local experience. As a guest, you will need to stay in properties where you have to be under the same roof as the property owner. Of course, it comes with perks and drawbacks. Ultimately, it is an experience you will never forget. 

8. Sonder

If you’re looking for inexpensive rates like Vrbo and Airbnb but also the best accommodations like hotels and resorts, you will want to check out Sonder. It offers the best of both worlds and only lists private rental apartments. It means you don’t need to share space with the property owners. 

The best thing about Sonder is its highly efficient app, which can pretty much do everything without any need to interact with the host.  

9. OneFineStay

OneFineStay is unlike any other rental platform on this list. All the properties listed on it go through a thorough vetting process conducted by its staff, who actually stayed on the property and tried out the amenities themselves. The site only lists the cream of the crop, which ensures only the best hotel-like stay in an “unhotel” experience for guests. 

10. Vacasa

Vacasa, often referred to as a “tech vacation company,” rounds up our list of alternatives. It uses artificial intelligence to its advantage as a vacation rental platform, which helps guests and, more importantly, rental property owners like you. 

From 3D property tours to an all-around app that gets everything done for you, Vacasa is another outstanding alternative worth checking out. 

Mashvisor: The Best Tool for Finding Ideal Rental Properties

As an online real estate marketplace, Mashvisor covers almost all real estate markets in all 50 states. Because of its widespread coverage, investors are more confident in the information and data available. 

We already talked about some of the website’s newest features. Let’s take a look at some of the others:

Property Finder

A lot of investors prefer to use Mashvisor because of its user-friendly features. When you log into the site, the Property Finder tool is the first thing you’ll see. You don’t need to navigate different dropdown menus to find the tool. Instead, it’s right there smack in the middle of the page, ready for use. 

Using Mashvisor’s Property Finder tool is simple. All you need to do is enter the city, neighborhood, zip code, or specific address you’re looking for. Then, it will lead you to a page where you can see investment, traditional rental, and Airbnb properties in the area of your choice. 

You may sort the results shown on the right-hand side of the screen according to:

• Listing price
• Area by the square foot
• Number of bedrooms
• Number of bathrooms
• Cash on cash return
• Rental rates
• Cap rates 

Each listed property may fall under any of the three tabs (Investment, Airbnb Comps, and Rental Comps) for easier property searches. The feature is perfect for investors serious about starting a rental property business like a vacation rental. 

Real Estate Heatmap

After hitting enter on the Property Search bar, a page loads where you can see a map of your search area. It is not an ordinary vicinity map but a brilliant real estate heatmap. The heatmap helps investors locate the best possible deals using different filters. The filters include the following: 

• Traditional Cash on Cash Return
• Airbnb Cash on Cash Return
• Traditional Rental Income
• Airbnb Rental Income
• Listing Price
• Airbnb Occupancy Rate

Turning on the heatmap feature shows areas that perform excellently and poorly under your chosen filters. The heatmap uses a spectrum with green and red as opposite extremes. The greens represent top-performing areas, while the reds show neighborhoods performing poorly. 

You can select which filter to use by clicking on the dropdown menu labeled Heat Map Filters in the upper right corner of the map.

After selecting the preferred filter, the heatmap will show a colorful display of the vicinity representing the different performance levels of properties. Users can zoom in on certain areas and select properties (represented by blue dots) to see how they fare against each other. 

The heatmap tool makes searching for an investment property much faster and more efficient compared to the old-school way of doing research and analysis.

Investment Calculator

Last but not least, Mashvisor’s investment property calculator—which also works as an Airbnb calculator—allows investors and users to ensure the math checks out on the properties they are considering. You can make fairly accurate profit projections and ROI calculations thanks to the website’s regularly-updated database. 

It utilizes data gathered from highly reliable sites like Zillow, Realtor.com, the MLS, and Airbnb as default numbers for computations. And since its database is regularly updated, you can be confident that you will get accurate and realistic results when using Mashvisor’s calculator.

The best thing about the investment calculator is that you can search for properties that align with the projected numbers once you finish the calculations. It makes the process of weeding out irrelevant properties less time-consuming. 

Wrapping It Up

Investing in a short term rental property for Vrbo, Airbnb, and other short term rental platforms is an excellent way to build equity and wealth, provided you do it right. 

If you do it right, investing in a vacation rental property can be a very lucrative venture and business model. Just ask the tens of thousands of successful rental property investors who’ve made considerable money as vacation rental owners and hosts. 

Of course, it all starts with spotting the perfect real estate deals to help you achieve your investment goals. 

For this reason, you should take advantage of what technology has to offer and use a real estate website like Mashvisor to ensure you find the best investment opportunities. Using Mashvisor to find and analyze rental markets will save you lots of time and money compared to doing things the conventional way. 

Its database will give you all the market data and relevant information you need to make an educated decision. Its tools allow you to find the right investment property in markets with the best returns.

If you need help analyzing the profitability of potential vacation rental properties, schedule a demo with Mashvisor today to get access to the best real estate data and tools.