👋 Hola, entrepreneur!
The rental business is one of the lucrative business ideas even in 2023.
You might want to start a side hustle or your own business like Airbnb. Whatever your goal is, this guide will assist you in getting there.
So, what you'll learn from this guide?
1. Reasons why you should consider rental business as a potential revenue stream in 2023
2. Actionable steps to start your rental business
3. How can you make money from it?
4. 20+ crazy rental business ideas
5. How much money do you need to start a business?
6. And a lot more!
🤘 Stay till the end.
First things, first!
What is an online rental business?
You might have visited 🏡 Airbnb's website to book your stays. It is one of the biggest rental marketplaces in operation right now.
An online rental business operates on top of the marketplace platform where the renters [customers] rent properties of any kind for a certain period.
The property might be a car, vacation home, party equipment, etc. [Which we'll cover in the later sections]
But isn't it tough to compete in the market? Why should I invest now? - these might be the burning questions you have now.
So here's the answer 👇
Why start a rental business in 2023?
Many rental hosts on Airbnb and other major rental websites were unhappy with their policies.
And they began creating their own rental businesses without depending on third-party providers like Airbnb.
💪 Which is a bold move, I say!
Here are some compelling reasons to establish an online rental business in 2023:
- Rental is an evergreen industry. You could earn more when you offer the best services.
- Opportunity to start a business you love.
- You could easily scale 📈 your business.
- Rental business is one of the best side hustle ideas. You could manage it even when you have a primary job.
- People prefer to rent goods and services rather than purchase them.
Let's see how you can start one.
10 highly actionable steps to start a rental business in 2023
Here are the exact steps that you can follow, [Take it one step at a time to get a sense of what you need to know and work on.]
Step #1 - Pick your rental business niche
But wait, what do you mean by business 'niche'?
A business niche is a particular segment of a broader market on which it focuses.
In the rental industry, for example, you might choose from a variety of niche markets such as vehicle rental, bike rental, vacation home rental, and so on.
How to choose a niche for your rental business?
- Identify your areas of interest or the ones you are passionate about.
- Write down the areas you have chosen out of your interest.
- Identify the search volume and target market interest - using Google search, Ahrefs, social media platforms, forum sites, etc.
- Repeat the steps for all the areas/ideas.
- And pick the one that matches your passion and the market demand.
Step #2 - Identify your target audience
After choosing the niche, it's time to determine who you want to serve.
Determining the target audience will help you reach the people who are interested in your rental business and would like to use your services.
For rental business, your potential audience might be:
- Business travelers
- Leisure travelers
- Short terms rentals
- Long term rentals
Choosing your business audience would help you conduct market research to identify potential problems they face and resolve them with your business.
Speaking of market research..!
Step #3 - Conduct competitor analysis & market survey.
Conducting a market analysis will help you validate your rental business idea and uncover untapped business opportunities.
Market research can be done in two ways:
✅ Primary research
✅ Secondary research
You may gather first-hand information from your potential clients by conducting primary research. Surveys and focus groups can be used to acquire information about the business.
To acquire insights via secondary research, you can leverage pre-existing data from third-party surveys and market analysis on the internet. In secondary research, picking the right audience segment is crucial.
😵 That's a lotttt of data you have to process, phew!
But it's worth it.
Step #4 - Create a rental business plan
You've decided on a niche, defined your target market, and conducted comprehensive market research.
Now you have to combine all these data points to create a rental business plan.
A well-crafted business plan [like the one you're about to write] should highlight your company's future, financial aspects, and core objectives.
Things to include in your rental business plan:
- Executive summary [includes business vision, mission, services you offer, growth potential, etc.]
- Business objectives
- Financial planner and analysis
- Management hierarchy
- Marketing plan
Here are some tools that can help you create a rental business plan.
Step #5 - Choose a business name
Here's the fun part!
Choosing a business name for your rental business helps you with branding and creating an identity.
Here are some tips for coming up with a great business name:
- Your business name should reflect the purpose of your business.
- It shouldn't be too hard to pronounce.
- It shouldn't be too similar to other businesses in your niche.
- Make it short and readable.
Here's a hack, you can use business name generators to find one.
🚀 Time to officially start your rental business!
Step #6 - Register and get a license
Registering and getting the required business licenses will make you a legal entity.
The process for registering your rental business varies based on the location and your business model.
Decide on your business structure (LLC, Corporation, etc.) and register with state and federal agencies.
For more information on business registration, read this article.
Step #7 - Creating your rental website
COVID19 paved the way for digital transformation in various businesses around the world.
People began to book their services through mobile applications.
Creating your rental website and application will give you an edge over your competitors in the market.
Here are the four key benefits of creating a rental marketplace app:
1. Your customers can easily book rentals.
2. You can build a direct marketing channel.
3. You can provide better customer service.
4. You can effectively manage your business from anywhere.
But you might be wondering, "How can I make a rental app like Airbnb?"
Here's the answer to your question:
There are two ways you can create your app,
1. Creating an app from scratch, and,
2. Making use of pre-made applications.
Both have their own pros and cons, but the cost is the most important factor to consider as a business owner.
Creating an app from scratch might cost you around $65000. As a startup owner, you might not have this much amount to spend on app development alone.
How much does a readymade app cost?
Creating a rental marketplace app like Airbnb using the readymade Airbnb clone will cost you around $2000 to $3000.
And they will have all the necessary features that an app like Airbnb should have to operate.
⏱️ It's time for you to decide!
Step #8 - Buy insurance for your business
Purchase insurance to protect your online rental business. General liability insurance is the most frequent type of insurance that a company can purchase.
You can also get a Business Owner's Policy to protect yourself from the threats that all small business owners encounter.
Step #9 - Invite relevant rental owners to host
🏁 You are all set to invite other rental owners to your platform.
Inviting other rental owners will help your customers pick the rental that best suits their needs.
Additionally, having a diverse portfolio of properties will allow you to make more money.
Many hosts on Airbnb and other rental platforms have concerns with the platforms commission fees. You might have the advantage of having them on your platform at a competitive fee.
Step #10 - Marketing your rental business
You have your website and hosts.
Now it's time to welcome customers into your platform.
You can use social media to attract customers to your platform. Booking.com's Instagram account might provide you with ideas.
They create content around the best destinations to visit and encourage users to take action.
User-Generated Content [UGC] is another option. You might invite your customers to tag your business on Instagram with their vacation photos.
It's a great way to get brand exposure.
Speaking of exposure, as an online rental business, you could also use SEO to drive traffic and increase brand awareness.
👉 Here are some other rental business marketing strategies that you can follow.
How does an online rental business like Airbnb make money?
We all know that online rental is a profitable business niche.
But how do they earn a profit? 💰
Commission fees are how online rental website like Airbnb generate money.
To use the platform, both the rental owner and the customer must pay a certain percentage of commission.
And there will be a commission fee for every booking made on the platform.
You could follow suit!
Additionally, you could use subscription-based services to earn more. [Uber does the same!]
20+ crazy and profitable rental business ideas
Here are the 20+ profitable rental business ideas for you to choose,
- Vacation rental
- Car rental
- Equipment rental
- Boat rental
- Campsite rental
- Furniture rental
- Construction equipment rental
- Office space rental
- Garage rental
- Party space rental
- Clothing and fashion rental
- Bike rental
- Dumpster rental
- Event venue rental
- RV rental
- Camping gears rental
- Fitness equipment rental
- Used vehicle rental
- Camera and filming gear rental
- E-scooter rental
- Music instrument rental
- Home & kitchen equipment rental
- Tech rental
- Surfboard rental
- Kayak rental
How much money do you need to start an online rental business?
Starting an online rental business might cost you around $5000 to $7000. While depending on your business idea, location, and other considerable factors, the startup cost might vary.
The startup costs we mentioned above include the following:
- Website and mobile application cost
- Business license and permits cost
- Insurance cost
- Other initial marketing expenses
Here's the startup cost worksheet from the U.S. Small Business Administration that helps you draft a startup cost for your business.
We've gone through some intensive steps to start an online rental business. It might be overwhelming. [😁 I can feel you!]
No worries! This guide will go nowhere.
Take your time, give it a read again, and you will find your way to success.
Need help? We're here for you.
Just ping us on WhatsApp.