Ever dreamed of buying an investment property for short-term vacation rentals? Whether you’re setting up shop in Columbia, SC, or in a Rochester, NY, apartment, we found experts to share their stories and offer valuable lessons they’ve learned along the way to help newcomers troubleshoot short term rental problems with practical solutions. Read on to learn how to turn your property into a five-star rental.
1. Expanding your network in the STR landscape
“I have been a realtor since 2009, primarily specializing in selling investment properties used as short-term rentals,” shares Danny Margagliano from Destin Property Expert. “Recently, my wife and I purchased our first condo, which we are self-managing as a short-term rental property. One of the most significant challenges we encountered at the outset was selecting a Property Management Software (PMS). With numerous companies available online, the decision can be overwhelming. A valuable piece of advice I can offer is to join larger Facebook groups dedicated to short-term rental properties, Airbnb, or VRBO. These groups provide access to experienced hosts who are more than willing to offer assistance.”
2. Navigating a competitive market with trifecta-like customer service
“Having worked for a decade in a fiercely competitive vacation rental market like San Diego – first as a property manager and now as a business owner – I’ve pinpointed three pivotal aspects that spell success for your enterprise,” shares Jeff Nisuis, owner of Titan Beach Rentals
- “Firstly, customer service must reign supreme for both your guests and owners. We prioritize responding to guest messages and calls within an hour, while also ensuring monthly reviews or updates for owners.
- Secondly, a well-rounded tech stack is indispensable for achieving this feat. This begins with implementing a property management system such as Guesty to streamline and automate your company’s workflow and communication.
- Lastly, the cornerstone of it all is accurate pricing. Employing a dynamic pricing tool to automate nightly rates and monitor market trends and demands not only saves time but also enhances pricing precision, revenue, and occupancy rates.”
Courtesy of Titan Beach Rentals
3. Offering virtual guides and demonstration videos
“Every home in our program is unique, and it’s impossible to keep track of every quirk in each home without a system. One of our secrets to successfully addressing guest questions is dedicating time to create a virtual guide for each property,” recommends Hilton Head Rentals. “Most guest queries can be resolved using our virtual guide. Even if guests don’t use the guide, we rely on it to swiftly and accurately respond to their questions.
We also produce a series of ‘quick and dirty’ videos demonstrating how to operate certain unique features in the homes, such as turning on the oven hood, adjusting the thermostat, or activating spa jets. It’s somewhat amusing to revisit our own videos months later to remind ourselves how things work in specific houses. This approach reduces the need for dispatching personnel, saving us money, and enables us to promptly enhance the guest experience by promptly addressing their inquiries.”
Courtesy of Hilton Head Rentals
4. Turning a million-dollar setback into success with rapid recovery and communication
“’I’m not going to lie, we are really freaking out over here’, the owner confessed to me two weeks after I signed her property – my first valued over one-million dollars. Unbeknownst to all of us, their previous management company canceled all bookings in June and July upon switching, resulting in the loss of nearly 30-thousand dollars in expected revenue,” shares Joel Harris from Port Aransas Airbnb Vacation Rental Property Management by Grand Welcome.
“The lessons I learned along the way are one, when confronting challenges, formulate a plan using the tools at your disposal and relentlessly execute it. Within 24 hours, our ads were up and running. I maintained constant communication with the owners, updating them about our progress, actions, and results two to three times daily. As our ads gained momentum, I shared our analytics daily and later on a weekly basis. After three days, we secured our first booking. Another followed just two days after. Gradually, the pressure eased as reservations steadily flowed in.
Second, maintain frequent and transparent communication, substantiated with real data and examples. In the absence of information, our minds concoct stories. To counter this, we provided our owners with detailed and factual information about the issue at hand. We outlined the steps we were taking to resolve it, employing regular and effective communication. And behold, despite starting from scratch this summer, the property that had us ‘freaking out’ became one of our top earners.”
5. Crafting unique spaces and thoughtfully designed rooms
“At Urban Sands we strive to curate a unique experience at each one of the properties we manage. We spend a lot of time with our interior designer, Theresa Danna at Designed to a T. Together we are able to create inviting spaces that help maximize booking revenues for our clients. Finding the most reliable vendors, cleaners, and admin in our area has really helped us overcome any challenges that are thrown at us,” suggests Chloe and Bryce Mayer, Owners of Urban Sands Vacation Rentals.
Courtesy of Urban Sands Vacation Rentals
6. Embracing technology for extra booking and revenue growth
“As a vacation rental property manager, the biggest challenges I experienced were two-fold – homeowners and guests. The most common issues several of my homeowners had in the past were related to bookings and revenue generation,” shares Kristian Lewis from New Braunfels Airbnb Rental Property Management by Grand Welcome.
“At Grand Welcome we ensure our properties are being highlighted and getting exposure on over 40 national and international travel websites to provide homeowners with consistent marketing growth. Additionally, we use dynamic pricing algorithms to establish optimal pricing based on seasonality, demand, and market trends within our region. For guests, we want to provide high-level boutique service during every phase of their visit from booking to check-out, so we have dedicated guest service teams who are available 24/7 to assist with any questions, issues, and concerns almost immediately.
Each of our properties is equipped with an in-home concierge tablet that includes a welcome guide with detailed self-check-in instructions, local recommendations, and contact information for our local team. The implementation of comprehensive software, at all levels, not only improved guest and owner satisfaction but also increased efficiency, revenue, and retention. Embracing technology while creating personalized touch points has been pivotal in elevating our brand and the overall experiences of owners and guests who utilize our vacation rental management services.”
7. Focusing on local expertise in vacation rental management
“As a vacation rental property manager, we are constantly working to improve the entire experience of the guests we host, as well as the owners that we partner with. As we look to stay ahead of the ever-evolving industry, we are focused on differentiation by being experts in our market,” suggests Compass Vacation Properties.
“We focus on local recommendations, things to do, behind-the-scenes activities and hidden treasures in our communities. This solution not only improves guest satisfaction but also drives interest in, and business to many of our fellow local small business owners. Embracing the impact of the community has been instrumental in enhancing our guests’ experiences and improving our vacation rental management operation.”
8. Automating and integrating processes for success
“At Landlord Studio, we believe that embracing technology isn’t just about convenience – it’s about transforming the way you think about your rentals,” suggests Charles Chan, CEO of Landlord Studio. “Integrating solutions into your property management not only creates new efficiencies but is also a key step in developing your portfolio into a scalable and profitable business. Therefore, whether you have one or a hundred units, it’s essential that you possess the right tools – tools designed for you – to help you stay on top of everything from income and expense tracking to managing cleaning and maintenance.”
9. Maximizing value in challenging times with consistent occupancy
“During challenging times, it’s often the core and simplest strategies that produce the most consistent value and return to homeowners. While a small percentage of all homes can hold the same rates year-over-year, or even increase them, that’s not the case for a majority of homes,” says Portoro.
“Every home in the short-term rental market is its own product line with 365 opportunities to generate a sale. That means that occupancy is the primary driver of revenue, and not nightly rates. Smart property management means having the operational infrastructure to successfully produce a full calendar even at lower daily rates.
This helps the property manager and homeowner achieve the following:
- Total revenue generated close to or at year-over-year expectations
- Ability to maintain the property as an STR under portfolio (avoid long term rental (LTR) discussion)
- Steady stream of income to maintain operations, housekeeping, and vendor relations”
10. Streamlining rental management processes through online platforms
“Embracing technology is a critical stride towards achieving success in the vacation rental industry. As technology providers, we are dedicated to helping hosts and vacation rental businesses regain valuable time and boost their bottom line. Often, property operators find themselves consumed by tasks like addressing guest queries, managing calendars, pre-arrival guest communication, and coordinating cleaning services,” says Fred Bassili, Marketing Manager at Hostfully.
“However, the implementation of suitable technology can drastically reduce or even eliminate these laborious duties. The impact is profound – we’ve witnessed business owners trimming over 100 hours of weekly work to just a few hours, or attaining consistent five-star reviews by bolstering efficiency and preventing errors. When seeking technology solutions, it’s essential to define your specific challenges, attend multiple demos, and ask pertinent questions during these sessions. Since vacation rental software is not one-size-fits-all (each has strengths and weaknesses), finding the best fit for your business is paramount”
11. Setting a price strategy
“The short-term rental market has become extremely competitive and saturated with an increase of supply following the pandemic. The increase in vacation rental rental supply has created an environment where nationwide occupancy has decreased year-over-year compared to prior years. As a result many owners and operators have decreased their nightly rates to try to increase their bookings,” says Sean Bakhtiari, Founder of Seacoast Vacation Rentals.
“We have a different strategy. First, we’ve invested in new amenities and design features to make our properties standout from the crowd and create better guest experiences. Secondly, although our portfolio occupancy rate dropped slightly (four percent year-over-year), our overall revenue grew seven percent thanks to “Average Nightly Rates,” increasing by 11 percent. When many owners and operators have been reducing their nightly rates, we’ve increased them and simultaneously reduced our minimum nightly stay requirements. This flexibility has been extremely beneficial for all our properties, in this more competitive environment.”
12. Maximizing revenue and guest satisfaction
Master Vacation Homes focuses on reducing maintenance costs for owners and maximizing rental income. We are one of largest property management companies in Orlando with over 500 properties boasting the highest returns in the industry.
Here’s a few reasons we are able to bring above average returns to our clients:
- Revenue management: We have a team responsible for pricing the homes that follow a strategic methodology that focuses on high occupancy X high daily rates.
- Superior home care: Currently we have 16 Property Managers caring for 30-40 homes each. They are responsible for the inspection of each check-in, dealing with all things related to the care of their homes and the investors that own each property.
- Operations and guest support: Our logistics operations are unmatched by the competition. We have designated field teams for each city area limited by a certain amount of homes so they are not overwhelmed. Our guests have support just minutes away if an emergency occurs.
- Setting a target market: Over time we learned one of the most important lessons so far. We needed to say no to clients that were not aligned with the way we operated and with our philosophy. Firing clients is counter intuitive, because as a business, you always want as many clients as possible. But in this industry, every owner wants to impose their wishes and demands on how they think their home should be managed. It turns out, it is impossible to manage multiple homes differently. After a few years of experience and seeing what works best, we slowly transitioned to work solely with investors rather than the traditional owner of vacation homes. This solidified our identity as a Management Company and allowed us to focus in the areas we excel.
Courtesy of Master Vacation Homes
13. Researching markets before you enter
“We cannot stress enough how important it is to do your research first before you start your vacation rental business,” recommends Mashvisor. “The industry is more competitive than ever, so you need data, and not just observations or hearsay, to help you in making decisions. Many users of our platform end up being surprised to find out that their first choice of location might not be as lucrative as they thought. So they’re glad to have used a real estate analytics website to not just confirm or deny their initial hypothesis but to also help them find another vacation rental market to invest in.”
14. Prioritizing customer service and resolving problems quickly
“While being the owner of MATCH Property Managers, we have experienced many challenges in the vacation rental side of the business, but have worked diligently as a team to overcome the challenges associated with renting vacation properties. Guests sometimes have maintenance issues while on vacation, and we have found that top-notch customer service can easily derail any problematic issues that could create a bad review for your rental company,” suggests MATCH Property Managers
“The key advice for vacation rental managers is to maintain 24/7 availability for guests in case of issues. Utilize answering services for prompt communication. Always respond with appreciation, conveying that guest satisfaction is a top priority. Actively listen to guests, gather necessary details for repairs, and apologize for any inconvenience. Keeping $25.00 gift certificates on hand showcases care for guest experience. Avoid showing inconvenience at guest calls, as respect can be lost. Post-issue resolution, follow up with guests to ensure their comfort. Ultimately, prioritize creating a memorable and enjoyable vacation experience.”
Courtesy of MATCH Property Managers
15. Hiring local property managers for out of state STR owners
“After working in the short-term rental industry for over 13 years now, we have discovered that the most successful vacation rental properties have engaged owners. To help owners who live in another town or state from their rental property take advantage of this, we developed a hybrid property management system,” shares Scott Westfall, Owner of CGP Real Estate.
“This provides responsive on-site management through a local team, while the owner manages their online presence and booking preferences. Giving owners a way to be hands-on while operating long-distance has helped them increase bookings, revenue, and guest satisfaction by providing the personal marketing touch guests are looking for – without sacrificing quick and professional response to on-site management and guest needs.”
16. Adapting to changing market conditions
“As a vacation rental property manager, a common challenge we face in Panama City is trying to compete for occupancy during off-season. Coming out of COVID restrictions in 2021, Panama City Beach finds itself in a very saturated market regarding Vacation Rentals. Occupancy has taken a hit and as new rentals continue entering the market, everyone’s peak season seems to be getting shorter,” says Panama City Beach Airbnb Rental Property Management by Grand Welcome.
“Our approach was to implement a hybrid system of renting short-term during the summer, and mid-term during the late fall and winter. To do this we not only appeal to the Snowbird crowd, but also to the overlooked traveling professional industry. This has helped keep business on the books when otherwise we may have faced vacancies.”
17. Fostering repeat visits
“We established Vacation Rentals of North Myrtle Beach due to local companies lacking urgency and professionalism. With a modest start, we now manage 130+ properties in 13 years. Our focus is on collaborating with property owners, acting as partners to nurture their business,” Barefoot Resort Vacations suggests.
“As hands-on owners, we and our dedicated team strive for exceptional guest experiences, aiming for repeat visits. Any issues during stays are promptly communicated, demonstrating our commitment to swift solutions. Challenges arise, but we face them with an open mind and humor. Our motto for owners: everything is fixable, repairable, and paintable – we’re determined to deliver a sense of urgency and professional results.”
Courtesy of Barefoot Resort Vacations
18. Increasing bookings with The Big Three
“After more than $100 million in guest bookings over the course of my career in vacation property management, we’ve discovered a combination of property features which maximize guest interest, boost rental rates, and extend occupancy in nearly every market. Internally known as ‘The Big Three,’ the combination of ‘pets, water, fire’ is the insider secret,” suggests Wes Walker, CEO of Popersum.
“Pet friendly properties routinely generate 20% (and sometimes more) than non pet properties. A water feature, such as a hot tub or modern pool, natural water view, or even an elaborate fountain also captures online attention and generates higher bookings and rates. Finally, fire as in a photographic fireplace or a fire feature near seating, extends most seasonality and produces higher interest. By combining The Big Three, competing with the traditional ‘location, location, location’ properties is not only possible, but often an outperforming combination.”
19. Forecasting a conducting thorough inspections
“Effective vacation rental management encompasses more than just maintaining the property. We’ve embraced a forward-thinking approach, consistently conducting inspections to preemptively tackle any looming issues. Coupled with technological tools, such as predictive analytics, we’ve been able to forecast high-demand periods, ensuring optimal occupancy and unwavering quality. This comprehensive strategy has solidified our reputation as a reliable choice in Austin,” recommends STR Management.
20. Nurturing a versatile team
“As is true with any business, your employees are critical to your success. We are a relatively small vacation rental management company so when hiring our reservationists and managers, we look for people who are willing and able to be a jack-of-all-trades and exhibit the flexibility and smarts to jump in on whatever is needed and to expect the unexpected,” recommends Beach-N-Bay Getaways.
21. Adopting a software management platform when you expand
“The primary focus for property managers should be on delivering excellent experiences for guests and homeowners. However, the complexities of managing monthly statements, booking inquiries, and pricing strategies can often divert attention from this vital role. As portfolios grow, pursuing excellence becomes even more challenging, and guest reviews may slip,” shares Gather Vacation Rentals.
“At Gather, we’ve confronted these challenges firsthand. Our solution extends beyond a mere set of tools; it’s a comprehensive partnership designed to streamline various facets of property management. This includes simplifying financial reporting through an integrated accounting system, efficiently handling inquiries, creating optimal pricing strategies backed by real-time data, and enhancing marketing efforts through targeted campaigns. Moreover, we offer risk and portfolio management insights, provide business development resources to fuel growth, and support a robust tech stack that aligns with the evolving needs of the industry.”