Is Your Budget Built for the Future?

Hal Conick
2/4/2025

As an entrepreneur—restaurants, nightclubs, selling solar panels—Nir Maimon learned a lot about starting a business. After arriving in the vacation rental space, he saw just how much he needed to learn about growing a business through operations, accounting, and budgeting.

In 2020, Maimon became president of Maimon Group, a Los Angeles-based luxury vacation rental business founded by his brother. For the first couple of years, growth was at more than 100% each year, Maimon says, before coming down to 30% to 40% growth. Maimon, now at the helm of the developmental side of the business, wanted to ensure the company kept growing at that rate for years. The way forward, he saw, was through good budgeting.

Quickly, Maimon met with consultants to gain a fundamental understanding of budgeting and how to use it to grow the business. The consultants taught him about the cost of goods sold, net profit, and EBITDA (earnings before interest, taxes, depreciation, and amortization). He felt enthralled by learning about the financial levers he could pull to save money while growing revenue.

“If you’ve overpriced yourself, you’re not going to capture revenue; if you underpriced yourself, you’re going lose money, and you’ll never be able to grow your business,” Maimon says.

To build a better budget, Nir first looked at the company’s gross profit, as well as the state of competitors and the local market to benchmark their business. Then, Maimon measured the company’s top-line revenue—the total money made from their properties—before measuring its take rate, the amount of revenue the business keeps. He also measured what the take rate needed to be to sustain the Maimon Group’s current growth versus growing even more.

These simple calculations got him to his first budget as president, which has led to a lot of success. When Maimon joined as president in 2020, Maimon Group had 10 homes and little technology. Now, the company has 100 exclusive homes, a full technology stack, and Maimon has a view of how the Maimon Group can grow even more through its budget.

“It’s been great. We’re growing and onboarding a lot of homes every year,” Maimon says. “And we’re only starting.”

The First Step: Gaining a Top-Down View

Learning to budget is something that many in the vacation rental industry often avoid.

Currently, growth in the vacation rental market is so good that many businesses have been growing while only budgeting loosely, if at all. Grand View Research reports that the market was worth $89.3 billion in 2023 and is slated to grow 3.7% each year until 2030.

Rachel Alday says that she and her husband Rob, co-founders of Abode Luxury Rentals, managed their business without much of a budget for its first many years. Mostly, they spent conservatively as the industry and business grew in Park City, Utah. But as they hired more personnel and expanded into new markets, Alday says that the need for a budget became obvious.

“We needed to know how much it’s going to cost for us to market the house, to take care of the house, to hire more people,” Alday says. “And then figure out what’s our take of the rental revenue.”

As they figured out the budget, Alday says that the company grew bigger and they’ve felt more mature as business owners. Budgeting has taken some of the mystery out of what was happening, allowing them to ensure growth now wasn’t coming at a cost to their future.

Getting that kind of top-down view of the business is a good first step in budgeting, according to Jacobie Olin, president of C2G Advisors, a vacation rental strategic consulting firm. Olin grew up in the vacation rental industry, as his dad managed properties on the Gulf Coast of Florida in the 1980s, and he’s seen first-hand how a business can struggle and succeed. When asked whether most vacation rental managers are good at managing budgets, Olin stifled a laugh and gave a frank answer: “No.”

No matter the size, whether 25 units or 3,000 units under management, Olin says most vacation rental managers don’t spend much time with their company’s numbers. They don’t tend to have a pulse of what’s happening with their flow of funds, nor do they have well-formatted income statements. This may work well enough when the industry is booming, but it could be the downfall of a business if times get tough.

When Olin works with clients, he starts from the top by fixing and formatting the company’s profit and loss (P&L) statement. “And then you need to know your expenses,” Olin says. “I’d say greater than 50% of the companies in this industry don’t even have a COGS [cost of goods sold] section. Step one for us is making sure they can work through their chart of accounts. Then they can have an actual income statement to use as a benchmark and measure as they start creating their budgets for the month, quarter, or year.”

Olin says that he preaches to vacation rental managers that they can’t measure the business if they don’t know what to measure. That’s why getting the initial benchmark—starting from the top and drilling down into the business, as Maimon and Alday learned—is essential.

“Then you can start looking at what your current revenue streams are and what your current gross margin is—that’s your revenue minus COGS divided by your revenues,” Olin says. “Then, you can look at your fixed versus variable expenses and compare them over time.”

Jesse Ehrert, who founded and serves as CEO of vacation rental accounting solution company Ximplifi, says that vacation rental managers without their financial house in order often have a false sense of security. They see revenue coming in, akin to a big bucket of money, but often spend more than they have before giving the owners their cut. This can cause money issues, hurt feelings between the business and owners, and waste a lot of time.

“Spending time growing revenue or growing our portfolio of homes is much more valuable,” says Ehrert, whose company developed a trust accounting plug-in for the vacation rental industry called VRPlatform. “And when you budget well, you get a firm foundation and accurate picture of how you’re performing as a company, which can take you take it to the next level.”

Learning and Finding Help

When Abode Luxury Rentals took on more properties and hired more staff, Alday and her husband saw the need to budget. But like Maimon, they also needed help in learning how to budget.

To get help, they adopted budgeting software made for vacation rental managers, something Alday said wasn’t widely available until recent years. Now, tools like Escapia, Guesty, as well as Ehrert and Olin’s companies, exist in the market. The software helped Abode Luxury Rentals set up a framework that gave them prompts, walking them through the process of creating an operational plan and a task management checklist.

And like Maimon, Abode Luxury Rentals hired consultants to help work on culture and key performance indicators, pushing the team to understand how to positively affect the numbers in the budget.

By learning from software and consultants, Alday says that they’ve been able to stop, assess, and reflect on where the business stands and where it’s going. It’s allowed them to become more efficient, she says, and helped them continue to grow geographically and in revenue.

Vacation rental managers must know that budgeting is not something they’ll understand overnight, Maimon says. The process of learning about budgeting, and then putting that knowledge to work, will take time, effort, and dedication. Maimon suggests first budgeting for time in the schedule to learn about the budget—consultants, books, YouTube videos—while also carving out time to look at the business’s numbers.

Maimon says that any company struggling with budget or technology can reach out to him on his LinkedIn, as he wants to give back to the industry. “I’m happy to help anyone who is going through this process because it’s a lot of fun,” Maimon says. “We’re very passionate about it. If I can give back a little bit, I’ll be honored.”

Budgeting for Technology

Looking at the business’s technology stack can be a helpful budgeting exercise. Ehrert says that his clients tend to spend about 2% per year on their technology, but some spend much more.

At the beginning, Maimon says that managers should stick with the percentage of the budget they benchmarked—Ehrert’s suggestion is a good start. But as managers learn more and see what levers truly influence their revenue, they can spend more on new gadgets, new pieces of software, and new innovations that serve the business.

When learning about what to adopt and what to budget, Olin suggests that managers reach out to companies that they admire.

“Let’s say you’re at 50 properties under management, find two or three property managers you think are great players in the industry—they might have 100 properties under management,” Olin says. “Call them up and ask them what tech stack they use and what challenges they deal with. That will give you better direction than if you just test out a million different new pieces of software from companies that are calling every day.”

Maimon says that this kind of homework is essential for adopting any new piece of technology. There are cost-effective tools, he says, but also a lot of shiny tools that only provide shallow utilities that vacation rental managers could find for less money elsewhere.

Wield the Power of Data in Budgeting

One tech-stack tool that Maimon has found especially useful is software that digs deeper into insights from both the budget and business.

Finding insights from data was one of Maimon’s first steps after solidifying the company’s budget. He wanted the budget to work off data, ensuring that every decision they make is measurable. The Maimon Group adopted a few different tools and ensured that the tools were being fed good data from across the company.

“Start starting by mapping your data,” Maimon says. “Dive into your QuickBooks, NetSuite, or your property management system, and then let’s start segmenting things.”

Almost immediately, he saw that applying data to the budget could help save money and generate revenue. About six months ago, for example, Maimon found a leak in the budget. When looking at insights from the data, Maimon saw that they had hired new maintenance workers who weren’t as cash-efficient as others in the maintenance department. The data showed that this was likely due to the rising cost of gas in California.

“Our maintenance department suddenly became negative, and we started losing money,” Maimon says. “I was like, OK, hold on a second, that’s not OK. We used to charge about $55 an hour for a maintenance guy. Now, we’ve raised it to $85 an hour and it’s profitable again.”

This is where data can play a huge role in growing revenue, Maimon says. Once the budget has been set and categorized from the top down, applying data-driven technology to the budget and studying the insights can help vacation rental managers see trends they would have otherwise missed. This can be used to close leaks but also raise the cost of underpriced areas to improve revenue.

“The beautiful thing is once you have a powerful budget, now you can start being very creative,” Maimon says. “You can start implementing business intelligence tools and exception reports, which highlight when something deviates significantly from the budget.”

Maimon has also used data to create bonuses and compensation plans for his managers, which are based on them meeting or exceeding your budget. If the Maimon Group needs to bring in $100,000 over the next month, for example, he’ll tell employees that if they exceed that number by 20%, they’ll get a 25% increase in their income for the month. This kind of data-driven incentive, with the budget at its heart, helps the business grow while also paying employees well. “Everybody wins together,” he says.

And Maimon says that managers can use data to step back and get an even better big-picture view. If revenue is growing at 20% per year, but operations costs are growing at 22%, the company is losing money. From there, a manager can dig down and figure out why operating costs are so high while looking at ways to keep revenue high.

“And that’s the true challenge of a strong CEO,” he says. “You always have to be willing to change, to adapt, and to look at the next new things. Some people say, ‘Oh, I’m good.’ No, you’re not. The moment you’re good, that’s when you lose ground.”

Rainy-Day Spending

Long before most vacation rental managers obtain a true understanding of their budget, Olin says that they surely know the timing of their high seasons and low seasons. What gets tricky for those who don’t budget is knowing how to save for both low seasons and when times get tough.

“The discretionary spending, or the rainy-day fund, is important in the industry because of natural disasters,” Olin says. “So many vacation destinations are in areas that have potential hurricanes—basically all of Florida, the Gulf Coast, and some of the East Coast. Then you’ve got wildfires and other natural disasters that can happen. These can cripple your company for six to 12 months, which throws a budget completely out of the window.”

With enough money built into the budget to cover low seasons and potential disasters, vacation rental managers can also play with using the discretionary fund on other investments.

The discretionary budget may be used to adopt new technology, upgrade accommodations, or spend more on advertising—it’s about what each business may need or want to experiment with. Ehrert warns that many in the vacation rental industry already overspend on ads, as they overestimate their effectiveness. He advises his clients to spend somewhere between 2% and 3% of the budget on ads, only spending more if the results truly dictate spending more.

Most important, Olin says that managers must be sure that they have money budgeted for when times get tough, saving enough to keep the company afloat for a year. Low seasons, natural disasters, and potential unknowns—consider the first weeks of the COVID-19 pandemic, when no one was certain of the future—can get businesses into trouble quickly, turning what was once extra money into necessary funds for survival.

Growing Your Business with Your Budget

Budgeting may feel overwhelming for vacation rental managers, Olin says, an area of work where they’ll have to push past their comfort zone.

But planning now means success for tomorrow. Alday says that going from loosely to precisely budgeting has shown her that for long-term plans to come true, short-term plans must first be successful. Ehrert says that as vacation rental managers understand their current financial situation, the drivers of the business, it can lead the way toward long-term success.

And for Maimon, budgeting has meant growing revenue and building toward a more successful future. At Maimon Group, he says that they talk a lot about developing a business that can one day be sold, and budgeting is a way to know the relative valuation of the business while finding unique ways to grow each year.

The most difficult part of budgeting, according to Olin, is starting. Managers—especially those at small- and medium-sized operations—are already leading so many different aspects of the business. Often, they’re on calls, helping customers, sometimes even stripping sheets. Most don’t want to end their day of working in the business, then stop to look at numbers and work on the business. It’s not glamorous, Olin says, but doing this up-front work on the budget will pay dividends for any vacation rental manager who takes it seriously.

“When managers actually go through the process of doing an audit, spending time looking at their own books, they will find something incredible,” Olin says. “Like, whoa, our payroll was out of whack, or we went crazy on technology spin this last quarter. Then they can start seeing that making measurable database decisions can change the entire business—it’s like night and day.”

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