Professional Property Management, Self-Management and Hybrid Structures
Many first time vacation home buyers decide to hire a property management company to manage the vacation property in their absence. This is a good solution for owners who have limited time or are located a large distance away from the home.
Property management fees can vary from company to company; with the level and depth of services provided and the location and amount of income expected from the property. In the Outer Banks, property management fees can range from 10 to 25% of gross.
An owner with multiple oceanfront properties can negotiate a lower rate; while an owner with a small cottage a distance from the beach will not have as much leverage.
As an alternative to full service property management, there are also companies that work with homeowners to handle the reservations and deposits while the management company handles the cleaning and maintenance. Third party websites, like VRBO, Airbnb and many others, make the task on homeowners easier than before they existed. These hybrid solutions are a good fit for owners who want to participate in the vacation rental management but require cleaning or maintenance assistance at the home.
Maximize listing performance on third party sites
Just like search optimization for a website, the VRBO website has criteria to determine how your home ranks and where it will display in response to a travelers search query.
VRBO has developed a listing quality score based on 7 items. The higher the score the better your ranking. Your home has to get in front of potential guests eyes to get rented.
VRBO is gradually moving toward a “best match” or a combination of travelers’ preferences and the booking experience the listing provides. You can pay a premium to appear higher in the search results, but it will not guarantee your position and many question if it is worth the cost. Subscription levels do not fully determine sort order; especially when travelers apply specific filters.
Self-Management of Vacation Rental
In order to be successful with self-management of your vacation rental, you will need to be at the property to perform the work or find a team to help you.
The single most important person for your team is a high quality housekeeper. The housekeeper will ultimately impact your guests’ first impressions of the property and will set the tone for the guests’ entire stay.
This person will report to you about the condition of the property and things like carpet cleaning that may need to be addressed in the future. The housekeeper will also let you know which guests took care with your property and which ones did not. The ones who did not care for the property can be eliminated from your email marketing campaigns and maybe even blocked from renting your home again.
Not only does your housekeeper need to be great at cleaning houses, but must be reliable and resourceful. You may need to have a backup housekeeper should the housekeeper you select not be reliable. The last thing you need to find on changeover day is the home was not cleaned before the guests checked in. Finding a housekeeper at the last minute during the season can be extremely difficult.
A property management firm has access to an “army” of cleaners and is able to react quickly when an assigned cleaner is unavailable. Frequently, the property management company will also have inspectors who check on the quality of the cleaning to make sure it will meet the quality standards.
Similar to the reasons for the housekeeper, your handyman will need to respond when guests require an item to be repaired or replaced. The handyman should live close to your property and be reliable and trustworthy. If a guest calls with a complaint, your handyman is the one you should send over to the property to check everything out. If you have a pool or spa, this will also need to be serviced about 2 times a week.
Property management companies have technicians or staff for certain repairs. In addition, they have relationships with established firms like HVAC, pest control and elevator repairs to get a quicker response for repairs that internal technicians are unable to fix.
Market your home to potential guests
If you are self-managing your vacation rental then you must get reservations. How will you market your vacation home so potential guest can find your house and reach out to you to rent it?
The most popular websites are VRBO.com, Homeaway.com, Airbnb.com. There are many specialty websites for communities or niche markets. You should be on as many sites as possible, considering the fee charged. After all, a guest cannot rent your property if they can’t find it.
Most importantly, you should have a dedicated website for the vacation home and use the website as the central hub for managing the communication regarding your vacation home. A fact sheet and common questions about the home and the area can be included on the site.
The website should allow guest to book your home and pay online. Calendars from all sites where your home can be booked should sync to make sure you do not double book. Ideally, you want to automate as much of the process as possible while still being available to guests that have questions to give your home that personal touch.
Property management companies also have their own website with all the properties they manage on the site. They have staff available to answer potential guest questions about a particular home and the area.
As an owner, you will be more knowledgeable about the specific features of your home than any property management staff can be. You also have more motivation to have the guest select your home to rent. The staff from the property management company will likely try to locate a home that best fulfills the guest needs and their rental criteria.
Respond to Guest Inquiries
VRBO uses the amount of time it takes to respond to inquiries as a ranking factor. This just makes good business sense. You must respond to inquiries immediately otherwise the guest will tend to look elsewhere!
While VRBO allows a 24 hour response time for your quality score, guests are not that forgiving. Today’s customers are accustomed to immediate gratification. Typically, guest may make several inquiries of properties that appeal to them and the first owner to respond will get the booking.
Owners who respond within the first 3 hours are 2.5 times more likely to get the booking than owners who wait 24 hours or more. While a response less than 24 hours will not improve your response score, it does display to guests to increase your reliability.
VRBO measures the response time from when you receive an inquiry until you reply and the response rate is the percentage of the last 10 requests you responded to. Responding by phone counts toward your response time and rate for subscription customers.
VRBO pay per booking owners do not have access to guest phone numbers until after the home is booked. Subsequent inquiries from guest within 60 days are not calculated in your VRBO response score.
Property management company staff are available 7 days a week to answer guest inquiries. In addition, most have email, social media, text and other platforms to respond to guest inquiries.
You should continually strive to get the best reviews and respond to any negative reviews you do get to minimize the impact on potential guests.
Frequently, a negative review and the way you respond is an opportunity to show how much you care and how you handle difficulties. It is best not to get in a shouting match or get defensive but strive to solve the problem to the guest satisfaction if at all possible.
The quality score for the VRBO listing takes into consideration the number and age of the reviews. At minimum, you should have a dozen reviews and continually strive to get new reviews. Guest are not allowed to extort you with threat of bad review nor are you allowed to offer guest a discount in exchange for a good review.
A property management company can be a valuable resource for resolving guest issues before they escalate. Some companies equally balance guest interest with owners’ interest while others will lean more one way than the other. What this means is a guest centered company will do whatever it takes to satisfy the guest; this sometimes results in higher charges to the owners and vice versa. As a result, guest may have more loyalty toward the property rental company and continue to select only homes from that company. Guest may have a negative review of the company that can also reflect on your home.
The more frequent your calendar updates the better your score. Typically, you should update the calendar every 30 days or less. If you don’t update your calendar in 60 days, your listing could be removed from VRBO results. If you have online booking, your calendar will be automatically updated.
Property management firms are adept at preventing any double booking and at automating the calendar updates between reservations on the company website and any external websites.
Online Booking & Payments
In the digital world, guest expect to be able to book and pay online. The trust factor is reduced once the online option is not available. To get the best VRBO ranking, accept online booking and payments.
Property management companies have online booking, payment and leases integrated into their websites. They understand the rules and make sure final payments are made before guest check in.
Photos are what sell your home and you want to show off your home with high quality photos. The format should be JPEG with horizontal layout with minimum dimensions of 1920 x1080 and VRBO recommends 3840 x 2160 pixels. The maximum file size is 20MB.
VRBO allows 24 photos to be uploaded and you should have 24 for the best listing quality score. You can achieve additional photos and change them out seasonally or for other marketing reasons.
The property management firm will typically photograph your home professionally as well as creating a positive description to market your home on their website. They will advise you with guest feedback and let you know when it is time to address certain updates in order to improve your reviews, increase your income and improve your results.
Complete the VRBO rate table to show all your rates and activate quotable rates to get the highest quality rating score. If guests are searching by price, your home can’t show up if you don’t have the rates.
Property management companies understand the market and will know what rate for your home will make it competitive and maximize revenue.
Providing a valid address for the property is all that is required for the highest score. VRBO will not show the address on your listing. VRBO will let you show the exact or approximate location with a pin on the map and selecting either does not impact you quality score.
The best option to manage your vacation rental depends on the amount of time, effort and money you can devote to it. Self-management can save you a lot of money, but it will also increase the amount of time and effort required from you. Your nature and how much you enjoy dealing with the public should also figure into your decision.
Some new owners will begin with full professional management and gradually take over some of the responsibilities over time. Owners who reside closer to the vacation home are better able to respond to emergencies than owners who are some distance away. This should also factor in to what method you decide to use to manage your home.
I suggest anybody who is looking to manage their own vacation home to ease into it by having a property manager just look after the property and taking care of the guests while they are in town. This way you can do just the marketing of the property and concentrate solely on getting guests to stay in the house. Once you have the marketing under control, then you might expand your role and handle all the customer service issues as well.
If you are self-managing the vacation rental, the guests are going to want to talk to you about your property before they rent, they will call you with many questions after they have paid the deposit, and they will definitely call you if they have a problem while they are staying in your house. You cannot put these calls off until after 5 p.m. if you are working another job. You will need to be able to take calls and handle situations during normal business hours. You will also need to be available if there is an emergency at the home at any time day or night. This can range from an overflowing toilet to the home getting struck by lightning and anything in between. I don’t know why, but many times they will call you before calling 911 for medical or police emergency.
The Outer Banks rental market continues to be strong to provide income from the investment and enjoyment for the family for years to come. The Outer Banks has been named a top beach destination every year. Eillu real estate has over 20 years’ experience in the Outer Banks market. For more information on buying Outer Banks Real Estate or to learn more about the Outer Banks in general, please contact us and check out our blog. We are here to help you make your dreams come true.