With Vacation Rentals becoming increasingly popular, it seems many people are getting into the Vacation Rental Management Business making it seem like a very easy and profitable business to operate. This couldn’t be further from the truth, as getting into this type of business, especially if you are looking to invest in and own properties without proper information and the technical know-how can incur huge losses.
Property management is the process of managing properties by keeping up and dealing with everything you need to run a rental business. Office staff, managers, and mechanical teams are generally used to help oversee the many aspects that go into rental properties, whether they are individual family dwellings or apartment buildings.
Property managers operate, control, and oversee all aspects of these units to ensure that they are running to their full potential and smoothly for the owner of the properties. It helps give accountability to those renting the properties when they have a professional to speak with regarding issues they may be having with the property. This can be long-term properties, or those looking for vacation rentals.
There are numerous benefits to the owner of the properties when they use property management companies such as:
Whether you plan to manage your own properties or you plan to hire a property management company, your one wise investment will be a Vacation rental software which enables owners and property managers to easily manage their businesses and take advantage of the tools that come with it.
Your number one goal should be to find an App or Property Management Software (PMS) that will allow you to manage all your properties and guests with ease. The best property management software provides a multitude of easy-to-use tools for every professional to help them better manage the vacation rental properties while giving access to the best information on them.
So before you purchase a PMS solution, make sure you read through the software reviews carefully to ensure the software solves all your problems, like being able to manage multiple properties, multiple kinds of properties, automated customer service, etc to get the best of the business and make profits.
The first step in managing your short-term rental business is coming up with a unique management strategy. Your strategy should be based on the following factors: your monthly expenses; profit margin goals; your ideal occupancy rate; your ideal guest; marketing strategy; and business goals.
Identify key selling points
Start by making a list of your rentals’ location, size, and amenities. Is your property an urban apartment or a cottage by the beach? The type of your property and its location are the first factors to take into account when shaping your unique offer.
All this information will help you to identify your ideal guest. A city center apartment with garage parking is more likely to attract a business traveler, while a lakeside house could attract families with kids. Make sure to include the relevant information in your listing description. Make it even more prominent by adding professional photos.
Set out your business goals
After you’ve identified the unique features of your listing and the type of guest it’s likely to attract, you can begin planning your short and long-term business goals. What is the average monthly occupancy rate you’d like to hit for your rentals? Bear in mind that your occupancy rate will vary throughout the year based on when your high and low seasons take place.
You will need to try and align your occupancy rate goals with your profit margin goals. Make sure you know the minimum number of days that your vacation homes need to be booked to cover your set monthly expenses, so you’re not making a loss. You can use this data during your low season to make necessary rate adjustments and special offers to ensure you’re covering your costs.
When it comes to setting a fee for your rentals, it’s a good idea to adopt a dynamic pricing strategy. Your monthly rental fees will sometimes fluctuate depending on the time of the year, the season, current events taking place, and the prices your competitors are charging.
Estimate your expenses
First, write a detailed list of your monthly business expenses. You want to make sure your monthly earnings exceed your expenses and also generate a profit. If you’re unsure what profit margins you should be aiming for, consult a financial advisor who can guide you.
To start off the pricing process, take a look at the rates that your competitors have set for their listings. Pay attention to their rate in relation to their rentals’ size and amenities to get an idea of the price range to work from. Then, take another look at your monthly expenses and calculate how much you would need to make per month to cover them. Add your profit margins on top of that to calculate your monthly rental rate. After that, divide it by the number of nights in a month to get your final nightly rate.
Once you’ve done this, re-examine the rates of your competitors and compare them to your own. If your rate is within their range, then you know you’re on the right track. If your price is a lot higher than the average, take another look at your calculations and pinpoint what’s driving your fee up. Maybe you have an expense you could eliminate, or your profit margins are slightly too high? Bear in mind that this is just one way of calculating your rate. There are different pricing strategies hosts can use for calculating their rates. Ensure you have a good bookkeeping and accounting mechanism in place.
Test your prices
Don’t be afraid to adjust your prices to test what works. If your booking rate is exceeding your expectations, raise your nightly fee, and see if online bookings decrease or stay the same.
Likewise, if your calculated rate seems to be putting off guests from booking with you, lower it slightly and see if the booking rate increases. A bit of testing can always help to determine if you are overcharging or undercharging for your rental.
One of the most essential aspects of vacation rental property management is communication with your guests. Excellent guest communication is vital for ongoing business. It can affect your overall host rating and reviews of your property listing.
It’s important to always be friendly in your messages with guests, and try to reply as promptly as possible. Guests who get a direct response from a host sooner than later are more likely to follow through with the booking. In addition, guests are also more likely to book with a host who makes them feel welcome.
Even in situations where guests may be complaining or behaving rudely, you should remain professional. If you show guests that you’re willing to listen and help, they’ll be more likely to leave you a good review or recommend your rental to other travelers.
Each time a guest checks out of your rental, you will need to arrange for cleaning to take place before your next guests check in. Scheduling regular cleanings will ensure your property is in pristine condition for your guests.
In addition to this, any damage to the property or amenities will need to be handled by a maintenance team. It’s in your best interest to schedule any repairs or maintenance work as quickly as possible, so it doesn’t affect your guests’ stay. If guests have an unpleasant experience staying at your rental due to a tap leaking or a pipe bursting, they will be less likely to leave you a positive review.
If your property has additional amenities, such as a pool or a hot tub, you will also need to arrange for appropriate cleaning and maintenance work to be done.
Conduct property inspections
Conducting regular property inspections and safety checks of your listing can help to prevent future hazards or headaches. Try to work with a vacation rental property management checklist when doing an inspection. This way you will be able to ensure that you don’t miss out on anything important. Preventing problems, rather than solving them, is a better strategy to use when handling cleaning and maintenance issues.
Effective marketing is the cornerstone of a successful vacation rental property management plan. Rental owners spend around $1,150 annually on advertising. But as many as 94% of homeowners think they could be doing more to market their properties. The vacation rental industry is competitive, and only using one marketing strategy is not enough to make your listing stand out. It’s a good idea to market across various platforms and channels to maximize your listing’s visibility.
Make your listing shine
Make sure that your listing descriptions are detailed and appealing. Include all the unique features of your property and the amenities it offers, as well as nearby places of interest. Use high-quality professional photos to visually market your listing to guests. If your property is pet-friendly and/or children-friendly, say so in the listing.
Market your business via Social Media
Once you have listed your property on the primary vacation rental platform, set up business pages on social media channels like Facebook and Instagram. Visual platforms like Instagram and Pinterest work well for content marketing. They are great for sharing travel-related inspiration and nearby attractions to your vacation rental. If you are looking to attract business travelers, Linkedin might also help. If you’re unsure about how to market on social media, take a look at your competitors for inspiration.
Create your own website
If you have multiple properties it’s ideal to have your own business website where guests can contact you directly. To strengthen your online presence, make sure your social pages link back to your website.
Vacation rental property management may seem simple enough when you start out. However, it can quickly become quite an extensive responsibility as your business grows, and you take on more rentals and guests.
Whether you choose to manage your properties as a host or you want to become a professional property manager, it can quickly become overwhelming trying to keep track of each task needed for every rental and guest by yourself.
Automation relieves hosts and managers of the day-to-day pressures that they encounter when juggling multiple responsibilities, allowing them more time to focus on larger business operations and goals.