2.3 Executive Summary

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There are excellent self-directed fi rms that can unlock these for you. Friends and family as investors are also great sources. However, approach friends and family as a fund manager would: have your plan laid out in detail, with payout and payback schedules clearly outlined. Remember; this is a business proposition for them. Finally, look into your credit card and home equity potential. These cash-fl ow sources are not prime choices for an initial home investment, but they can be useful backups for short-term expenses. It’s a good idea to have these options on hand in the event of expense emergencies.

You MUST take the time and put in the eff ort to write a business plan before you buy that fi rst vacation rental home. This will allow you to truly judge if it is a worthwhile investment and business venture. Additionally, ask the experts: those who already have a proven business record in the vacation rental market in your area. Talk to vacation rental veterans, and experienced vacation rental management companies. The knowledge you will collect from their experience is pure gold.

If you are entering the Vacation Rental Property business for the fi rst time, knowing what to include in your strategic plan can be confusing. I will give you some guidelines to follow, with a list of things you will want to include. I recommend that you follow this template to make it easier for you to understand how to create your own holiday rental management and business plan.

2.3 Executive Summary

Unless you are working within a corporate culture, and/or in the fi nancial sector, you may not be familiar with the purpose and structure of an Executive Summary. Consider it this way: when you go to a bookstore searching for a new novel or a well-known classic, you usually pick up the book and read the blurb at the back to get a short, comprehensive idea of what the story is about. Well, an executive summary is very similar to that blurb. It is just a few short sentences

WEALTH AS A VACATION

that explain your VRP business, providing the most important information about the business that you want to get across to yourself, your guests, and others. Anyone should be able to read the fi rst page of your plan and have a relatively good idea about what your business entails.

The easiest way to begin an Executive Summary is with the fi ve W’s: Who? What? Where? When? Why? This will help you pull together the fundamental information for your business, without panicking that you’re missing something.

Ask yourself the following questions:

Who is it for? • Families? • Couples? • Large groups of friends? • Golfers, skiers, sightseers, other recreation or activity fans?

What is it? • Is it a condominium, townhome, or attached home? • Is it a detached single-family home? • What size is it, and is it low-market, mid-market, or luxury?

Where is my vacation house located? • The beach, mountains, city, small town, isolated? • How close is it to tourist attractions? • Is it near major shopping and event centers?

When is it best to stay at my rental? • Is it seasonal only? • Is it suitable all year-round? • Is it a midweek, weekend, one week, or longer stay?

Why do I have this property? • Are you buying for all rental or also for your own use?

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• Are you buying as a “one off ” or are you trying to build a portfolio of VRP? • Are you buying because it is your family’s preferred vacation location, or because it is a good investment, or a balance of the two?

Feel free to add any additional questions that you feel are appropriate for your own business. You do not need to follow this structure exactly, but this exercise will help you outline the information you would need to include in your executive summary. You can then rewrite it to make sure it spells out a short narrative of your executables.

Note: If you are still not sure about the details of your Executive Summary, feel free to do it at the end of your business plan. However, it is a very important part of the plan. Do not skip it or leave it out. You will do yourself a great service to go online and do some searches on everything you read here. Research these areas in more depth. Knowledge is power.

A Sample Executive Summary Even if you choose to buy a VRP property in a branded community and use a third-party management company, you still need to write your Executive Summary. You should go through the planning process and have a very clear feel for how your property will be used, and by whom. Again, a VRP isn’t just an investment, and it’s not a hobby.

Start by asking, “Who’s it for?” It’s for your family; it’s for you; it’s for your future; for all of those things. But there are two sides to this thing. The second part is to consider, “Is this a one off or is this a part of a business I want to grow?” You may not know the answer to this question at the beginning, but it doesn’t hurt to ask anyway. Don’t go into VRP saying, “I’m just going to do one. We don’t need to worry about all these details, or do all that much planning. We’ll just make a few extra bucks.”

It doesn’t work like that. A successful VRP investment requires