This year, local markets across the country are beginning to heat up for second homeownership, according to Forbes, leading some people to think about the idea of jumping into the vacation rental industry with the assistance of popular short-term rental sites such as Airbnb, VRBO, HomeAway and many others.
If you count yourself among this category, you will want to know a few things before you even get started, such as demand for rentals, estimated rental prices, how best to manage a property, on the floor services and local tax conditions for the area.
Then you’ll want to consider how you want to position your property to prospective renters, as you are going to find having a quality short-term rental and good customer service can help keep your rental property occupied.
From hiring property managers to implementing automated systems, ensuring you run a smooth operation increases the chances of travelers sticking shiny five-star reviews on your listings.
Your attention to detail and professionalism can be the difference between flipping the virtual vacancy light on or off. Here are some actionable tips for entering the market and launching a successful short-term rental business this year:
Hire a Management Company
For some people, self management, or rent-by-owner, isn’t the best choice. You may be short on time, unsure how to go about managing a short-term rental business, or prefer to not deal with the work involved. Hiring a professional management company can help calm the nerves of an owner dealing with their first round of bookings and eliminate the burden of dealing with guests, maintenance and cleaning vendors.
Even though you may lose some control over your property and there are (sometimes significant) management fees, hiring a property manager means you’ll be relieved from dealing with all the details of guests, managing booking sites, cleaning services, taxes and much more.
Choosing a manager can be a good first step for people new to the short-term rental game, and you can always consider taking it on yourself after you learn a little more about the procedure. If you decide to hire a property manager, make sure they have experience in your market, they are professional and you are comfortable with them as a person. A good manager should quickly be able to offer you a realistic assessment of nightly rates and anticipated bookings for the year.
Look to the Fine Details
With sites and listings galore at their disposal, today’s travelers have more options than ever. Hosts need to have a quality website listing that focuses on the strengths of the property, with lots of details about location and amenities as well as high-quality professional photos. And a few extras can go a long way. You can earn business if you include the expected amenities: a fully stocked kitchen, high-quality towels and linens and the all-important WiFi.
To cherry out your place and have guests eager to return, include popular technology comforts such as 4k TVs, gaming systems, Netflix subscriptions and a full cable lineup to pick up all the sports networks. Attentive owners provide items like beach chairs, beach toys, inflatable toys, beach towels, boogie boards and much more.
Think about what you like and need when you are there and provide that for your visitors. It’s important to remember people love a personal experience when going the short-term rental route. After all, they’ve chosen this experience over a hotel.
Welcome notes or baskets with snacks like fresh roasts, wine or a simple cookie tray that conveys”thank you” for their pick. These cozy touches make your visitors’ stay a memorable one, upping your odds of a fantastic online review as you’ve set yourself apart in the short-term rental space.
Follow Tax and Licensing Rules
Short-term rentals are usually required to register and collect occupancy taxes, just like a hotel. Rules and taxes around short-term rentals are getting to be increasingly scrutinized in communities across the nation. As you get bookings for your new short-term rental, you will be required to register, collect and remit sales and lodging taxes. To get started, you will first need to register with town, county or state agencies (and sometimes all three).
The guest pays the rental tax but it’s your obligation to collect and pay it to the right city, county or state agencies, usually each month or quarter. Similar to a resort, you will need to pay tax to one (or more than one) local governing agency.
Any uncollected taxes or late tax payments may incur penalties and interest to the homeowner. Want to guarantee you’re compliant? Set up an easy lodging tax platform to eliminate the burden and make sure nothing slips through the cracks. If you use a full-service property manager, it usually will handle these taxes as part of its services.
Automate Your Rental Tasks
Technology is making everything easier in the short-term rental space and, you will want to keep up with customers’ expectations for a smooth experience. Short-term rentals often have high turnover with lots of visitors.
By streamlining your bookings, automation delivers maximum efficiency while providing a positive experience for any travelers. Today’s technologies allow you to streamline everything — the online booking procedure, guest reviews, contracts, the check-in process, keyless-entry systems, housekeeping communication, maintenance, temperature controls, payment processing and occupancy tax remittance.