Turning a home into a successful vacation rental business depends a lot on mastering the basics: maintaining good cash flow, properly maintaining your property, avoiding tax penalties, staying organized, minimizing risk and ensuring your customers are satisfied. Here are some important steps to success in short-term rentals:
Establish separate bank accounts for your property. Separating your business into its own checking account helps you to properly track, record and report your income and expenses. It can also help you to maximize your tax advantages. You don’t want to commingle personal and business funds because that can complicate matters later on.
Track expenses. As mentioned above, you’ll want to stay on top of tracking expenses. There are several affordable web-based programs on the market that make it easier than ever to capture receipts and mileage information in the palm of your hand. Go paperless and save yourself the headache of having to organize everything at the last minute. Your accountant will thank you come April!
Invest in professional photos. Forget amateur photos taken on your smartphone. Instead, invest in professional shots and you’ll reap the rewards. A pro will know how to make your property shine so that it’s the top pick. Pro tip: If you operate a seasonal property, we suggest having two sets of photos that you can swap out that show the property in both winter and summer, if possible.
Review your listing(s) monthly. Consumers value transparency and accuracy, among other things. That’s why it’s critical to review your listing(s) every 30 days. This due diligence can help you find errors so you can address them before they cause confusion or lost business.
Purchase vacation rental insurance. Insurance is not an optional expense— it’s a must. Insurance protects you, your property and your guests in the event something unforeseen happens. If you are not properly insured, you can be held personally liable for any claims made against the property. Better safe than sorry, right? Your agent can help you select the best plan for you and your needs.
Use rental agreements. Rental agreements protect both you and your guests. The purpose is to clearly define the rules and policies for the property prior to their stay. While the contents can vary, at minimum most spell out the following:
- Dates
- Rates/Payment
- Maximum Occupancy
- Cancellation Policies
- House Rules
- Check In/Out procedures
When in doubt, be specific about the expectations and consequences of broken agreements. Don’t leave anything to chance. Misunderstandings happen, but you can do your part to minimize communication breakdowns.
Be a customer service rockstar. It’s inevitable. Every once and a while guests will have an issue while they stay in your vacation rental. Yikes! In such a situation, you should call to mind the basics of customer service. The first cardinal rule is to apologize or acknowledge. The customer wants you to listen and understand their concerns. This is not the time to argue but hear them out. If they are upset, take time to reflect back their questions. It’s called active listening and it’s embraced by the world’s most successful companies. You might be surprised how well this approach works to defuse uncomfortable situations. The next step is to correct the situation sooner than later. To the fullest extent permitted, address and resolve their concerns. It could involve a full or partial refund. The last step is to thank them. Thank them for bringing the issue to your attention so you can do better next time.
Encourage reviews. As long as you provide a clean, safe and as-promised rental experience for your guests, reviews should be an easy sell. This feedback can have a two-fold benefit. It can provide you with the insights you need to keep your vacation rental running effectively and adjust course, if needed. What’s more, a series of good reviews will push any bad ones farther down the list. Review requests can be mentioned at any point during or after the stay. For a special touch, send a handwritten thank you card to leave them with a strong impression.
Work with a trusted property management partner. Following time-tested strategies for maintaining your property, renting it to tenants, minimizing risks and marketing your property can make all the difference in how successful your real estate venture is. Don’t worry about not being an expert in every aspect of your rental property business. Whether you need a bit of help managing your rental property, or a more full-service solution, we can help you develop your vacation home into a profitable and successful business. Learn more about broad suite of solutions: https://www.propertymanagementinc.com/
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