The growing vacation rental industry presents an opportunity to meet a need: short-term vacation rental property management. The National Association of Realtors found 30 percent of vacation rental homeowners will rent their properties as short-term rentals.
While owners want profit, they don’t necessarily want to handle marketing, booking, and maintenance. A vacation rental management business helps owners deliver exceptional guest services and handles these tasks for them. How do you get started in the short-term rental industry? Here’s what you need to know about vacation rental property management.
Follow vacation rental rules and regulations
Regulations on the short-term vacation rental industry and its service providers vary from each state and municipality. Some states require service providers to hold a property management certification, even for vacation rental properties.
Check with your local government as legislative changes for the vacation rental industry are ongoing; your specific area may have just implemented new rules or be planning to in the coming months.
Set up business operations
You can’t be profitable without tracking revenue and operating expenses. Find a system able to track accounting and taxes. For specific vacation rental business tax questions, consult with a tax professional. Some software accounting services assist with calculating owed taxes.
Protect your vacation rental management business with insurance. You or your employees will be accessing other’s private property. Background checks deter untrustworthy applicants and provide clients peace of mind, but anything can happen. The insurance covers your liability in the case of accidental damage to a client’s private property.
What to offer when managing vacation rental properties
The key to generating profit in a vacation rental management business will be in the services you offer. Owners like the convenience of working with one-stop shop companies. Common services include:
#1- Cleaning and maintenance
Cleaning before and after each rental is a top concern for vacation rental owners. Contracting with a reliable management company eases that burden. Figure out early on how to handle tight turnovers. Companies that can deliver a fast, detailed cleaning on time is vital to the rental success and earning customer loyalty.
Besides cleanings, offer more services like deep-cleanings, professional linen cleanings, and maid services.
Vacation rental properties still have maintenance associated with home upkeep. A property management company with on-call handyman services, lawn maintenance, or vendor partnerships is helpful for the owners.
#2- Property listing and marketing
How you market your vacation rental determines how frequently it will stay occupied. A vacation rental management business helps owners win bookings by offering high-quality photography services, staging advice, and copywriting for the vacation rental listing.
Smart vacation rental business owners list on multiple websites, like Airbnb, Vrbo, and HomeAway. They take initiative to market using social media. Vacation rental management business handle marketing the property’s availability across channels on behalf of the owners.
#3- Automated vacation rental management
Vacation rental management business owners find there are tasks they execute over and over again. These tasks include reserving the property on the booking calendar, scheduling cleaning and maintenance, and sending reports to the owners. Automated tools save time, increase profitability, and improve communication. Use the technology and handle your daily tasks related to short-term rental business faster and easier.
#4- Clear communication
Vacation rental property management companies must please the property owner and their guests. Clear communication is the best way to avoid host complaints on both ends of the spectrum. Let the guests know what to expect from the property in the advertising. Charge a security deposit to encourage them to follow property rules. Keep the owner informed of what’s happening at their property, both the good and the bad.
Define your pricing strategy
Vacation rental service providers must prove their services increase rental revenue by delivering exceptional guest service. However, booking fluctuations create a challenge when creating a pricing structure that generates revenue for your business and value for the owner.
There are two common pricing structures for a vacation rental management business:
- Commission model: offer flat fees for services plus a percentage of booking profits. The fees are deducted from the owner’s share of the profits when paid on a monthly basis.
- Guaranteed model: the property owners earn a fixed fee each month regardless of bookings. Think of this structure as sub-letting the owner’s property.
Find additional income sources
Make your managed vacation properties more attractive for booking and boost your bottom line with value-added options. Check these nine ideas on additional services that can generate more income per vacation rental, such as bicycle rentals or cooked meals. Another option is to add special services direct to the owners, like in-house lawn care or handling key drops.
Use vacation rental software
It’s critical to stay organized when running a management business. Luckily, today’s vacation rental software automates many aspects of vacation rental management, like bookings, payments, and communication. Vacation rental management software can:
- Organize online bookings in a calendar
- Manage guest check-in and messaging
- Offer an automated dynamic pricing strategy
- Communicate with your clients, staff, vendors and property guests
Decent vacation rental software can save you a lot of time and effort while helping to increase the occupancy rate of properties you manage.
Starting your vacation rental management business
Around 297 million people are projected to book vacation rentals in 2019, showing the short-term rental market is strong with travelers. The expanding vacation rental industry represents a real opportunity to meet a need for these owners.
Starting a vacation rental management business is not a walk in the park. It can be quite challenging and time-consuming. Still, the result may be well worth it if you spend enough time setting up your business operations and developing your long-time strategy.
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