It’s no surprise that short-term rentals, also called vacation rentals, have some of the best cash flow in the business. For that reason, slews of hosts have flocked to platforms like Airbnb to get their piece of the property wealth-building pie. But, with more cash flow comes more headaches for Airbnb owners, which is where short-term rental property management comes in.
What is Short-Term Rental Property Management?
Short-term rental property management is the process of managing short-term rentals. It includes finding and screening guests, cleaning, marketing, scheduling repairs and maintenance, and collecting rent. It also includes resolving any issues during a stay and communicating with your guests.
Advantages of Using Short-Term Rental Property Management
In exchange for reduced headaches, professional short-term property management can be worth the high fees. Here are some of the top reasons to outsource your vacation rental’s property management:
Increased Occupancy
A good property manager can help you increase your occupancy. They’ll fill your vacancy quickly by putting together packages with discounts and amenities that appeal to potential guests. In addition, the property manager will be able to get more people interested in booking with you because they have access to many different booking sites, such as VRBO and Airbnb. They may even have Superhost status, which could skyrocket your bookings!
Reduced Costs
A property manager can help you reduce costs by negotiating with vendors and suppliers for better rates. They can also negotiate with guests to get lower rent or even waive fees if they are able to fill a vacancy quickly. So, if you want to save money, hiring a property manager could be an excellent way to do so.
More Income
A property manager can help you increase your income by increasing the number of bookings. They will be able to market your property and get more people interested in it, which means you could get more money from each stay. Their market knowledge will also help you know which amenities allow you to charge the most per night!
Flexibility
A property manager can help you to be more flexible with your schedule. Hiring someone else to run the day-to-day operations of your rental will give you more time to spend doing other things like managing your other properties or growing your portfolio!
Better Customer Service
Property managers are trained to provide a high level of customer service. They will be able to respond quickly, answer questions and solve problems that arise during each rental period. This is especially important if you have a guest who needs something fixed in their unit or any other maintenance issues that need attention ASAP!
Disadvantages of Using Short-Term Rental Property Management
Not everything is a plus in the world of property management, and these disadvantages tend to make Airbnb owners think twice before paying the heavy commission of a property manager:
High Commission Fees
The commission fee for vacation property managers can be as high as 30% of the total rental income. That means if your property generates $1,000 in revenue each month, you’ll be paying $300 to cover their fees. This can add up quickly and eat into your bottom line.
Why do short-term rental property managers charge so much? With multiple cleanings a month, constant guest interactions, and the need for 24/7 availability, short-term rental property managers take on a MUCH more hands-on role than traditional property managers.
Less Control
You have less control over your property manager when you outsource it to a third party. While they may be great at what they do, they may not know your business or property like you do and may be unable to make decisions that are consistently in line with your strategy.
Higher Maintenance and Repairs
When you outsource your property management to a third party, the cost of maintenance and repairs goes up. That’s because you have to factor in their fees and commission into the cost of any repairs that need to be done. Not only that, property managers often tend to take a cut of their “preferred vendor’s” fee, which incentivizes them to upcharge. Of course, this doesn’t ALWAYS happen, but it isn’t unusual by any means.
9 Tips to Successfully Manage Short-Term Rentals
Once you’ve bought your newest short-term rental, it’s time to set it up for success. These tips can help you keep the cash flow flowing whether you self-manage or outsource your property management.
1. Invest in Quality Amenities
Quality amenities are the first step in attracting high-quality guests. You don’t have to invest much money here, but you can affordably upgrade your listing with amenities like high-thread-count bedding, luxury towels, comfortable furniture, and stainless steel appliances. If your home has outdoor space, consider adding a grill or patio furniture to enhance your guests’ experience.
2. Market Your Rental Strategically
You can’t just sit back and wait for people to find your property. You need to market it properly so that you attract the right renters. Use all available channels, including online sites like Airbnb and VRBO, and keep your prices competitive by using a dynamic pricing software like PriceLabs.
3. Establish a Cleaning Routine
You cannot afford to have cleaning issues with your vacation rental. You must establish a routine for keeping it clean and ready for guests. This includes washing sheets and towels, vacuuming carpets, dusting furniture, cleaning bathrooms, and sanitizing commonly touched areas. Whether you do the cleaning yourself or hire out the cleaning, this checklist is a MUST.
4. Screen Potential Guests
As a short-term rental host, you are responsible for screening guests before they check-in. This includes verifying their identity and ensuring they have a clean record across booking sites. ALWAYS read past reviews and ensure that there are NO red flags BEFORE you allow a guest to stay in your home.
5. Set Clear Expectations for Guests
As a host, you have the right to set clear expectations for guests. This includes house rules, check-in and checkout times, noise levels in common areas, etc. Make sure that there is no confusion about your expectations before accepting a booking request. You don’t want to invite a rager into your house and get slapped with a $1,000+ noise ordinance fine!
6. Provide Excellent Customer Service
Hosts should always provide their guests with excellent customer service. This includes quick response times to messages and ensuring guests have everything they need during their stay (like toilet paper and clean towels). In addition, you can set up auto-messages that will be sent to a guest before and during check-in, as well as a pre and post-checkout message to ensure the stay was comfortable and deal with any issues before the guest leaves a review.
7. Offer Flexible Check-In and Checkout Times
Offering flexible check-in and checkout times is a great way to increase the number of bookings you receive. Guests who need to drop their bags off early or stay late can do so without worrying about adding on extra costs, which can be helpful for those who need an early start to their day or want some extra time after their trip ends.
8. Maintain a Great Reputation
Maintaining a great reputation is vital for any business, but it’s essential when managing a vacation rental. Guests will rely on reviews from other guests who have stayed at your property, so make sure to keep them happy, avoid any illegal property management practices, and provide the best experience possible.
9. Leverage Technology
Technology can help you manage your vacation rental more efficiently and effectively. There are NUMEROUS tools for auto-messaging, dynamic pricing, calendar syncing with cleaners, and more that will make your life significantly easier and keep your rental at five-star quality!
Self-Managing vs. Hiring Short-Term Rental Property Management
Hiring a property management company is the easier option, but it’s also more expensive. You’ll have to pay a percentage of your rental income to the company, and their fees will vary depending on how much work they do for you. These fees can be between 10% and 30% of your total revenue, which means if you earn $5,000 per month from your short-term rental property, then expect to pay around $500-$1,500 per month in management!
The other option is self-managing: You handle everything yourself without help from outside sources, but this comes with its own challenges! If you’re willing to put in some extra time learning how things work, then self-management could be right up your alley…but you may not have the outright experience that a time-tested short-term rental property manager has.
What to Look for in a Short-Term Rental Property Management Company
If you’ve decided to go the professional management route, there are a few things you should ALWAYS look for before signing a contract:
A Beaming Reputation
A good reputation is the first thing to look for in a property management company. You want to ensure they have an established track record of success and are well-respected by other investors in the area, and you should always check for any complaints made online.
A Variety of Services
A professional short-term rental property management company will offer various services to help you get your property up and running quickly. These include cleaning, maintenance, repairs, marketing, and connections with suppliers who can help upgrade your short-term rental for a better price.
The Right Price
You want to make sure you find a property management company that offers services at a price that is right for you. If you are just starting as an investor, finding someone who will work with your budget while still providing reliable and quality service is best. Always get quotes from MULTIPLE property management companies before agreeing on one. Again, these prices will typically range from 10% to 30% of rent per month, depending on the rental.
Years of Experience
Your property management company should have years of experience in the hospitality/short-term rental industry. This means they understand the ins and outs of renting properties and have made a name for themselves by providing excellent service to their clients. You need someone who knows what they are doing, so look for these qualities in any potential management company before hiring them.
Responsive Communication
Responsive communication is a must when working with a property management company. They should be able to respond to your questions and concerns quickly, usually within 24 hours or less, and should be responding to your guests within hours. If you don’t hear back from them for more than a few days, this may not be the best company for you.
Legally Compliant
Property management companies that are legally compliant with the law will be able to provide you with various documents, such as leases and rental agreements. These documents should be clear, concise, and easy to read so there is no confusion. They should also be up-to-date with current state laws on landlord-tenant relations, especially related to hospitality.
Utilizes Technology
As a property owner, you want to work with a tech-savvy company that utilizes the latest technology. This will help streamline your rental process, making it easier for you and your guests. If they use dynamic pricing software, channel managing software (like Guesty), and have your property listed across all relevant sites, they may be worth a try!
Best Short-Term Rental Property Management Companies
While there are numerous local short-term rental property management companies, these are some of the best large-scale options for hosts:
Airbnb Partner Management
As a partnership program, Airbnb’s “local partners” operate as highly-rated hosts that can manage your vacation property. From cleaning to price-setting, professional photos, and guest communication, your Airbnb partner can tailor your listing to get the most bookings and the best ratings and stay booked no matter the season. Fees vary based on the partners, so be prepared to negotiate a worthwhile price.
Vacasa
Vacasa not only operates as an Airbnb competitor but as a short-term rental management company to help hosts. With 24/7 guest support, digital dashboards, dedicated local experts, and built-in marketing, Vacasa is one of the most trusted names in the world of vacation rental property management. They are a pricey service with a 25%-35% of rent fee, but their added professionalism could be more than worth it.
VTrips
VTrips is another guest and host-facing platform serving markets across the Southern and Southeastern United States (and Hawaii!). Like Vacasa, they offer dynamic pricing, housekeeping, and a dedicated local team. They also boast SEO (search engine optimization) features and a data-first approach to getting hosts the highest nightly rate. VTrips doesn’t publicly release their management pricing, so you’ll have to contact them to find out the cost!
Guesty
Guesty is a rental property management software for both hosts and property managers. They support any rental type, from single-family houses to apartments and even glamping! Their multi-calendar lets you see all your properties’ reservations in one place. And, included accounting features and 24/7 guest communication comes at an attractive price. From $49 up to $99, this is an EXTREMELY affordable way for self-managing hosts to run their platforms OR for property management companies to get a leg up on the competition.
Hostfully
As with Guesty, Hostfully is a short-term rental property management software. With integrations to Airbnb, Vrbo, Booking.com, HomeToGo, Rentals United, Homes & Villas, and more, you can be assured that your listing will be live across the entire web. And with a syncing calendar, you don’t need to worry about overbookings! In addition, their scalable pricing is still very affordable; only $109/month for a single property or $375/month for 50 properties!
Final Thoughts on Short-Term Rental Property Management
If you’re considering getting into the short-term rental business, knowing what you’re getting yourself into is essential. There are some benefits that come with managing your own property—such as saving money on fees and keeping everything in-house—but there are also many more benefits to hiring a professional management company. The best thing you can do if you’re considering starting a short-term rental is to weigh your options before making any decisions. So make sure you’re hitting on the points we’ve mentioned in this article.
If you want to learn how to get into the vacation rental game WITHOUT buying a property, check out our Airbnb Arbitrage Guide!
