Guide to managing a vacation rental
If you are the owner of a vacation rental, you have two main options for utilising it. The first is to utilise it by exploiting its through short-term rental capability, by using platforms such as Booking.com & Airbnb, an option that is becoming increasingly popular while the second option is to use it for long-term rentals.
Each of these options has its pros and cons. For example, the option of short-term rentals offers high rents, which are seasonal and sometimes uncertain but also require much more of your time. Guests staying at you vacation rental will expect high quality services, let’s not forget that they will be on vacation, and a bad review can negatively affect your occupancy levels.
So before creating your listings on platforms like Airbnb, Booking.com & Expedia you should first ask yourself the following:
1) Do you have the time and willingness to offer excellent services?
Do you live near the property? Is it easy for someone to contact you?
2) Do you find your property in an attractive area?
3) Is your property suitable? It must be furnished, maintained and clean!
After deciding that your accommodation is suitable for short-term rentals, you need to consider the pros and cons of managing an Airbnb property.
The advantages of short-term rentals
Profitability: According to statistics, a short-term vacation rental can generate up to 60% more revenue. The best way to find out is to check the daily rates for similar properties on platforms like Airbnb.
Flexibility: One of the biggest advantages is that as an owner you have complete control over when and for how long your vacation rental will be rented. If you wish you can deactivate your listing and sell it or move in the property yourself. You can also take your summer vacation the days that you want. This flexibility is not possible in the case of long-term rental.
Makes life interesting: If as a person you enjoy human relationships and enjoy meeting travelers from all over the world, you will probably realize the benefits of renting your accommodation to tourists. It will give you the opportunity to meet many interesting people and share your experiences with them, something that can make your life more colorful.
Disadvantages
Being on Call: If you make this decision then you should be available to meet tourists and reply to their messages 24 hours a day. Listing your property on platforms like Airbnb is sure to bring a lot of questions and requests from visitors. If you refuse to answer within a satisfactory period of time this will be detrimental to your score and will affect your ranking and visibility.
Continuous Cleaning: If you have new guests staying in your vacation rental every week this means a lot of dusting, mopping and general cleaning. There are also bed linen and towels that need to be washed regularly. If you do not enjoy housework it would be good to hire a professional but make sure you set the appropriate cleaning fee to cover your costs.
Trust: It is difficult to trust your space to people you do not know. In general, platforms like Airbnb have succeeded in maintaining a high level of trust in the community they have created.
Higher costs: The costs of managing a tourist accommodation include increased costs for maintenance, cleaning and equipping the property with the appropriate consumables but also covering the property’s utility bills.
The Advantages of Long Term Rentals
Peace of Mind: Having long-term tenants you do not have to worry about promoting your property. You can relax knowing that your property will be occupied for a long time. It takes a lot less effort on your part as you do not have to communicate with tourists or coordinate the various tasks that need to be done.
Guaranteed Income: Of course there is more revenue through short-term rentals but no one can guarantee that you will maximize your occupancy and revenue. Through long-term rentals you are guaranteed for longer periods of time.
Disadvantages
You lose your flexibility: As you know, life sometimes hides pleasant but also unpleasant surprises. Having an annual contract with a tenant is not always ideal as situations can change. Long-term rentals do not allow you to change your thoughts about occupancy, and they do not allow you to use your property during the summer.
Giving up Control: When you rent your property with short-term leases you have the opportunity to enter the property when tourists leave and do whatever you want in terms of maintenance, upgrading and cleaning. With long-term tenants the power is handed over and you are at their mercy on how your accommodation is taken care of.
Bad Tenant Issues: With short term rentals your payments are guaranteed, especially if you use online platforms and have them handle your payments. If you get a bad tenant through long terms, there is always the risk of not receiving your payments in time or not receiving them at all. Also if your long-term tenant is not very respectful, there is a high potential for high maintenance and repairs costs . Sometimes though, you get respectful tenants that are invested in the property, Screening your tenants is important to avoid paying too much for repairs.
7 Tips for managing your tourist accommodation
1) Excellent service & Excellent reviews = High occupancy rates
The first rule of short-term rental – especially if you use platforms like Airbnb – is that a tourist accommodation lives and thrives on the reviews it receives. Bad reviews will reduce occupancy rates as well as daily rates.
Simple touches such as local suggestions for activities, local events or the best restaurants will help your guests have a great time. A small welcome gift is another thing that many hosts include and makes guests feel unique.
2) Learn the Tax Laws
When you own a tourist property, there are some beneficial tax laws. However, if you do not know them, you may be leaving money on the table.
3) Be good with budgets
You will have to pay bills, cleaning costs, higher and more frequent maintenance costs, and do not forget the platforms share per booking.
A budget is very important when you are managing a property and every expense must be accounted for.
Although you want to offer your guests a very good level of service your revenue and expenses need to be calculated very well in order to have a positive revenue stream. Imagine that you have to explain some expenses to a partner. A €200 expense for buying pillows would seem like a very bad investment.
4) Keep the property well maintained
This point is self-evident. But let’s make a hypothetical scenario – I promise it will be interesting.
“Let’s say you go on a vacation. You are excited as this is the first time you are traveling with your family after the coronavirus period. Additionally, the accommodation you have booked looks impressive in the photos.
After a few hours’ flight, and an hour’s drive with the rental car you arrive at the accommodation. There is a key box at the entrance. You take the keys, open the main entrance and take the first step inside the property and a feeling of frustration overwhelms you. Your family is right behind you. All the excitement that lasted throughout the trip disappears in an instant and gives way to a depressing silence.
The unbearable condition of the accommodation has undoubtedly ruined your vacation. The frustration slowly disappears and a feeling of anger begins to take its place. At that moment, you decided that you will do everything humanly possible to make sure that something similar does not happen to future happy travelers. Your mission, your sole purpose is to destroy this Airbnb crook.”
In general, this may be an overdone scenario but I think you got the point. Keep your property in good condition otherwise prepare to suffer the rage of your unsatisfied visitors.
5) Charge competitive prices
Determining the rental price is always a challenge, both for long-term and short-term rentals. There are many parameters that affect the rental price such as the amenities you offer, the location, the size of the property and much more.
To find out the price you have to charge you will have to use a trial and error method and most likely you will have to adjust your rates according to the season. To determine rental rates, you need to do a comprehensive market research. You need to look at the rates that similar properties in your area are setting.
6) Be energy efficient
For a short-term rental accommodation, you as the owner will be responsible for paying all its bills even when no one is staying on the property. Investing in energy efficient solutions will keep your expenses low and improve your cash flow.
7) Use a property management software
You can outsource the management of your vacation rental to a professional company. This is great for people who want a 100% passive income. This however comes at a high cost. Different companies offer different payment structures.
Fixed income – The management company will pay you a fixed monthly income each month regardless of bookings
Fixed charge – The management company will charge you a fixed monthly fee regardless of bookings
Commission – The management company will charge you a percentage of the revenue. This is a good thing as your expenses are directly related to your income and motivate companies to bring you more bookings.
The alternative is to do it yourself. Fortunately, this has never been more feasible than it is now thanks to the various channel manager software available. Smoobu, the software used by EasyStay BnB is a reliable and economical choice.
BONUS: Photos are important
When it comes to maximizing occupancy rates, having good photos is vital. It is worth using a good camera or even better to use a professional photographer. This is probably the best investment you can make in your property.
Here are three statistics that prove how important it is to have great photos in your property listing.
60% of potential customers are more likely to click on a property if it has quality photos.
Web pages with images receive 94% more views.
Tourists spend 60% of their time looking for real estate by looking at pictures.
Make sure you have great photos that highlight your property’s unique points. This will dramatically increase your occupancy rates and revenue.
Guide to managing a vacation rental
If you are the owner of a vacation rental, you have two main options for utilising it. The first is to utilise it by exploiting its through short-term rental capability, by using platforms such as Booking.com & Airbnb, an option that is becoming increasingly popular while the second option is to use it for long-term rentals.
Each of these options has its pros and cons. For example, the option of short-term rentals offers high rents, which are seasonal and sometimes uncertain but also require much more of your time. Guests staying at you vacation rental will expect high quality services, let’s not forget that they will be on vacation, and a bad review can negatively affect your occupancy levels.
So before creating your listings on platforms like Airbnb, Booking.com & Expedia you should first ask yourself the following:
1) Do you have the time and willingness to offer excellent services?
Do you live near the property? Is it easy for someone to contact you?
2) Do you find your property in an attractive area?
3) Is your property suitable? It must be furnished, maintained and clean!
After deciding that your accommodation is suitable for short-term rentals, you need to consider the pros and cons of managing an Airbnb property.
The advantages of short-term rentals
Profitability: According to statistics, a short-term vacation rental can generate up to 60% more revenue. The best way to find out is to check the daily rates for similar properties on platforms like Airbnb.
Flexibility: One of the biggest advantages is that as an owner you have complete control over when and for how long your vacation rental will be rented. If you wish you can deactivate your listing and sell it or move in the property yourself. You can also take your summer vacation the days that you want. This flexibility is not possible in the case of long-term rental.
Makes life interesting: If as a person you enjoy human relationships and enjoy meeting travelers from all over the world, you will probably realize the benefits of renting your accommodation to tourists. It will give you the opportunity to meet many interesting people and share your experiences with them, something that can make your life more colorful.
Disadvantages
Being on Call: If you make this decision then you should be available to meet tourists and reply to their messages 24 hours a day. Listing your property on platforms like Airbnb is sure to bring a lot of questions and requests from visitors. If you refuse to answer within a satisfactory period of time this will be detrimental to your score and will affect your ranking and visibility.
Continuous Cleaning: If you have new guests staying in your vacation rental every week this means a lot of dusting, mopping and general cleaning. There are also bed linen and towels that need to be washed regularly. If you do not enjoy housework it would be good to hire a professional but make sure you set the appropriate cleaning fee to cover your costs.
Trust: It is difficult to trust your space to people you do not know. In general, platforms like Airbnb have succeeded in maintaining a high level of trust in the community they have created.
Higher costs: The costs of managing a tourist accommodation include increased costs for maintenance, cleaning and equipping the property with the appropriate consumables but also covering the property’s utility bills.
The Advantages of Long Term Rentals
Peace of Mind: Having long-term tenants you do not have to worry about promoting your property. You can relax knowing that your property will be occupied for a long time. It takes a lot less effort on your part as you do not have to communicate with tourists or coordinate the various tasks that need to be done.
Guaranteed Income: Of course there is more revenue through short-term rentals but no one can guarantee that you will maximize your occupancy and revenue. Through long-term rentals you are guaranteed for longer periods of time.
Disadvantages
You lose your flexibility: As you know, life sometimes hides pleasant but also unpleasant surprises. Having an annual contract with a tenant is not always ideal as situations can change. Long-term rentals do not allow you to change your thoughts about occupancy, and they do not allow you to use your property during the summer.
Giving up Control: When you rent your property with short-term leases you have the opportunity to enter the property when tourists leave and do whatever you want in terms of maintenance, upgrading and cleaning. With long-term tenants the power is handed over and you are at their mercy on how your accommodation is taken care of.
Bad Tenant Issues: With short term rentals your payments are guaranteed, especially if you use online platforms and have them handle your payments. If you get a bad tenant through long terms, there is always the risk of not receiving your payments in time or not receiving them at all. Also if your long-term tenant is not very respectful, there is a high potential for high maintenance and repairs costs . Sometimes though, you get respectful tenants that are invested in the property, Screening your tenants is important to avoid paying too much for repairs.
7 Tips for managing your tourist accommodation
1) Excellent service & Excellent reviews = High occupancy rates
The first rule of short-term rental – especially if you use platforms like Airbnb – is that a tourist accommodation lives and thrives on the reviews it receives. Bad reviews will reduce occupancy rates as well as daily rates.
Simple touches such as local suggestions for activities, local events or the best restaurants will help your guests have a great time. A small welcome gift is another thing that many hosts include and makes guests feel unique.
2) Learn the Tax Laws
When you own a tourist property, there are some beneficial tax laws. However, if you do not know them, you may be leaving money on the table.
3) Be good with budgets
You will have to pay bills, cleaning costs, higher and more frequent maintenance costs, and do not forget the platforms share per booking.
A budget is very important when you are managing a property and every expense must be accounted for.
Although you want to offer your guests a very good level of service your revenue and expenses need to be calculated very well in order to have a positive revenue stream. Imagine that you have to explain some expenses to a partner. A €200 expense for buying pillows would seem like a very bad investment.
4) Keep the property well maintained
This point is self-evident. But let’s make a hypothetical scenario – I promise it will be interesting.
“Let’s say you go on a vacation. You are excited as this is the first time you are traveling with your family after the coronavirus period. Additionally, the accommodation you have booked looks impressive in the photos.
After a few hours’ flight, and an hour’s drive with the rental car you arrive at the accommodation. There is a key box at the entrance. You take the keys, open the main entrance and take the first step inside the property and a feeling of frustration overwhelms you. Your family is right behind you. All the excitement that lasted throughout the trip disappears in an instant and gives way to a depressing silence.
The unbearable condition of the accommodation has undoubtedly ruined your vacation. The frustration slowly disappears and a feeling of anger begins to take its place. At that moment, you decided that you will do everything humanly possible to make sure that something similar does not happen to future happy travelers. Your mission, your sole purpose is to destroy this Airbnb crook.”
In general, this may be an overdone scenario but I think you got the point. Keep your property in good condition otherwise prepare to suffer the rage of your unsatisfied visitors.
5) Charge competitive prices
Determining the rental price is always a challenge, both for long-term and short-term rentals. There are many parameters that affect the rental price such as the amenities you offer, the location, the size of the property and much more.
To find out the price you have to charge you will have to use a trial and error method and most likely you will have to adjust your rates according to the season. To determine rental rates, you need to do a comprehensive market research. You need to look at the rates that similar properties in your area are setting.
6) Be energy efficient
For a short-term rental accommodation, you as the owner will be responsible for paying all its bills even when no one is staying on the property. Investing in energy efficient solutions will keep your expenses low and improve your cash flow.
7) Use a property management software
You can outsource the management of your vacation rental to a professional company. This is great for people who want a 100% passive income. This however comes at a high cost. Different companies offer different payment structures.
Fixed income – The management company will pay you a fixed monthly income each month regardless of bookings
Fixed charge – The management company will charge you a fixed monthly fee regardless of bookings
Commission – The management company will charge you a percentage of the revenue. This is a good thing as your expenses are directly related to your income and motivate companies to bring you more bookings.
The alternative is to do it yourself. Fortunately, this has never been more feasible than it is now thanks to the various channel manager software available. Smoobu, the software used by EasyStay BnB is a reliable and economical choice.
BONUS: Photos are important
When it comes to maximizing occupancy rates, having good photos is vital. It is worth using a good camera or even better to use a professional photographer. This is probably the best investment you can make in your property.
Here are three statistics that prove how important it is to have great photos in your property listing.
60% of potential customers are more likely to click on a property if it has quality photos.
Web pages with images receive 94% more views.
Tourists spend 60% of their time looking for real estate by looking at pictures.
Make sure you have great photos that highlight your property’s unique points. This will dramatically increase your occupancy rates and revenue.