A Guide To Managing Short-Term Rentals
Looking for a new career path? Short-term rentals are one of the most lucrative businesses to get into and can provide you with fantastic annual revenue. However, it’s much different than renting out your typical property as a landlord, and it comes with a whole range of responsibilities.
Managing a short-term rental can take a lot of work, but it’s extremely rewarding. You can either do it yourself as the property owner or become a short-term rental manager and help with a wide range of properties for others.
This guide will tell you all you need to know about starting short-term rental management and enhancing your services for your guests.
What is a short-term rental?
Short-term rentals are exactly what they sound like. They are available for people who want to stay somewhere for a short amount of time, and this is typically for people who are on vacation or a business trip. The stays will typically range from one night to a couple of weeks, providing many more services and amenities than a long-term rental.
A short-term rental property type can be anything, such as an apartment, house, or even a hut. Sometimes they are incredibly unique, and people from around the world will come to stay in them. Pricing is typically set on a per-night basis, and the maximum length of stay is normally within 30 days.
What is short-term rental management?
Short-term rental management is the job of handling all aspects of the maintenance and upkeep of a property. All business matters are put in the hands of the manager, who will do everything to ensure the guests are happy and the rental agreement is being adhered to at all times.
Basically, a short-term rental manager does everything in regard to the property. It involves a large number of different jobs, and they are often the go-to person if the guests have a problem. Having a short-term rental manager provides gives the business more accountability and makes it seem much more professional.
Difference between managing short-term and long-term rentals
There are a few main differences that separate short-term rentals from long-term rentals. When it comes to managing one, here are the main things that will affect the job:
Short-term rentals have guests staying in them for either a few days or weeks. They rarely ever stay longer than 30 days. Whereas a long-term rental will be rented out for a much more extended period of time, such as a few months or years. Sometimes, they’ll even come with a minimum stay requirement.
When people look for short-term rentals to stay in, it’s often in a popular area in the city or by the beach. This is because guests want many amenities nearby to use during their stay. On the other hand, long-term rentals can be anywhere in the area and are more likely out of tourist hotspots.
Amount of work
You will face a much more demanding workload as a short-term rental manager. There are a lot of jobs to handle, and you need to focus on the frequent upkeep of the property. Long-term rentals involve much less interference, and the tenants will deal with a large amount of the maintenance.
Pros of short-term rental management
There are a lot of great advantages you can make the most out of when a short-term rental has suitable management:
More annual income
If you think about a time when you’ve booked to go on a relaxing holiday, do you go for the cheapest option with the least amount of amenities? The answer is probably no. People want to stay in a luxurious location with unique selling points, so they are willing to spend more.
Due to this, when you manage a short-term rental, you’re bound to make more money each year than if you were to manage a long-term rental, where people do look for more affordable prices. You provide an increased level of attentiveness and service, and your guests will repay you with a higher annual income.
More control over the property
If you are a landlord for a long-term rental, you don’t deal much with the property in your day-to-day life. In fact, there are actually a lot of regulations in place, which means you cannot visit the property without written notice, and you have to give your tenants a fair amount of warning. With short-term rentals, you have much more control and access.
Since guests are only staying in your property for a short period of time, you can frequently check up on it. At the same time, you can set the availability and choose when you want guests on the property, compared to a long-term tenant who will always be there.
There are some fantastic tax benefits you can take advantage of when you are managing a short-term rental. Just like if you were to own a long-term rental property, you would be able to deduct up to $25,000 in expenses and increase your annual revenue even more.
Higher levels of protection
When you’re a landlord for a long-term rental, you often have to deal with the tenants directly. If they refuse to leave after their contract has ended or they refuse to pay rent, it can be much more difficult to get them out and collect payment.
Short-term rentals are often listed on trusted Online Travel Agencies (OTAs), such as Airbnb or Booking.com. With these sites, you get an added layer of protection as they work as a third party to ensure you get payment from your guests. They are also there in case there are any disputes, or they leave you an unreasonable bad review.
Cons of short-term rental management
Although there are many benefits to managing a short-term rental, it’s always good to balance it out with the cons before deciding whether it’s the right career path for you:
Much more work
Compared to your typical office job or working as a landlord for a long-term rental, there is a huge workload you’re going to have to deal with. You may receive a higher annual income, but it correlates with how hard you will work to keep everything balanced. From handling the finances to guest satisfaction and property upkeep, you’ll always be busy.
If you want a business that doesn’t require much time or effort, then managing a short-term rental isn’t for you. However, you can still get into the short-term rental and outsource the management work, but this will cut into your profits.
Pricing can change
While you can charge a lot more for a short-term rental, especially if it’s in a desirable location and has a wide range of luxurious amenities, you may not be able to keep the prices so high throughout the entire year. For most of these rentals, pricing will be seasonal, and you’ll have to adjust them to meet demand.
If you keep your nightly prices so high when it is out of season, you’ll definitely see bookings plummet. Therefore, you have to ensure that you’re meeting your guests' demand, which will involve reducing your pricing and receiving less revenue for that time.
Expensive to run
In some cases, landlords of long-term rental properties will include all bills in the tenant’s rent. However, the majority of the time, the tenant will have to pay their electricity, water, and gas bills themselves. They will also handle the majority of the maintenance on the property.
On the other hand, short-term rentals require owners to pay all the bills and all maintenance costs, such as a cleaner each time a guest checks out. This can come to a lot of money in the long run and affect how much you earn overall. Therefore, there are much higher running costs to think about when managing a short-term rental.
Vacant for longer
When you are managing a short-term rental, the dream is that you’ll always have a guest staying in it, and your bookings are all full. However, this isn’t always a reality, and there are chances that you’ll have several vacancies throughout the year where you aren’t making any money.
Long-term rental managers don’t have to worry about this problem as much because when a tenant signs a contract to stay in their property, they will be there for the entire duration, which can often be for years each time.
What short-term rental management involves
Want to know exactly what kind of jobs you’ll be required to do as a short-term rental manager? Here are the main requirements of the job:
Evaluate the rental
Before you even consider getting guests into your short-term rental, there are a lot of evaluation processes you need to complete first. The main one will be figuring out how much you will charge each night by looking at the price your competitors are charging and the seasonal costs.
Other jobs will include gathering documentation to ensure everything on your property is safe and ready for the guests. This can involve taking detailed photos of each room, getting certifications from a professional, and setting rules to display on the property that your guests should abide by when there.
Market the rental
Once your property is ready to go, it’s time to advertise it so you can get your first booking and start accommodating guests. This will involve posting the short-term rental on a variety of OTAs such as Airbnb and Booking.com. You can also use other methods of marketing, such as paid ads and flyers you can post around the area.
You may also want to consider sprucing up the place outside in case potential guests walk past the property and show an interest in it. You can trim the hedges, mow the lawn, and even add some special furnishings that make the place look more exciting.
Communicate with guests
As a short-term rental manager, you need to accommodate the needs of all your guests. This involves figuring out a way for them to check-in. You can either be there when they arrive to provide them with keys and show them around the property, or you can organize another way for them to get in.
Similarly, you want to ensure you’re always available in case something goes wrong or the guests have questions. This means you should be active on all channels, so you can communicate with guests currently staying on the property or talk to people who are considering making a booking.
Handle finances and paperwork
This may not be the most fun part of the job for many short-term rental managers, but it certainly is an important aspect. You will need to set up the financial contracts and figure out the most effective way that your guests will pay you, depending on the channels you’ll be using. If a guest refuses to pay, you must hunt them down and amend this.
You’ll also need to keep track of all payments and documentation of each guest. This can include the rental agreement or rental ledger. Once you’ve set up a framework for each, it’ll be easier to supply one for each guest much more quickly.
Maintain the rental
Your property isn’t going to take care of itself, and it isn’t your guest's responsibility to do it either. So before and after each booking, you’ll need to ensure that the rental is clean, all the waste has been removed, and the amenities are looked after. This may involve hiring a cleaner to help out.
Similarly, you’ll have to do certain forms of maintenance at various points throughout the year. For example, you will have to check the smoke and carbon monoxide detectors and appliances to ensure they are safe for the guests. You may also have to look out for signs of rodents regularly, change the lightbulbs, and service the HVAC system.
Top tips for short-term rental management
Want to ensure success when managing your short-term rental? Follow some of these tips, and there’s no doubt you’ll come out on top.
Treat your guests well
When you’ve stayed at a hotel or a short-term rental yourself, what makes you more inclined to leave a positive review? If you have a mediocre experience, you won’t really have anything to write home about. But if you have a fantastic time and you are treated with care and attentiveness, you are more likely to tell others about it.
Due to this, it’s extremely important that, as a short-term manager, you treat your guests extremely well. This is from the moment they message you and make a booking until they have handed back the keys. This will lead to more positive reviews and increased bookings in the future.
Set a budget
If you constantly spend money on your property and make upgrades, you may be paying more than you’re actually bringing in. You need to figure out how much you want to spend on your monthly rental by opening up a spreadsheet and sticking to it. Only start making more expensive adjustments to your property if you receive a surplus in bookings and rent.
When you stick to your budget, which can involve bills and maintenance, you are allowing yourself to receive more profits. However, ensure that your budget doesn’t cut back on guests' care because you still want them to have a great experience.
Maintain the property
While cleaning and taking out the trash each time a guest leaves is a given, you also need to do other things to maintain your property. You have to go the extra mile to ensure your guests are happy and safe at all times, which will also increase positive reviews.
Stick to cleaning the property after each booking, but also add in some extra maintenance such as looking after the garden, checking the appliances are still working to their full capacity, and just checking the overall quality of the rental.
Optimize your listing
The first thing potential guests will see when trying to find a short-term rental to stay in is your listing, so you want to ensure it stands out from the rest. You will want to put a lot of time and effort into perfecting your listing on all channels, as this can help increase the number of bookings you receive.
People are attracted to high-quality photos, so you’ll want to ensure that you’ve staged your property and taken images using a good camera. Another good thing to do is add some personality to your description by making the guests envision how they’ll feel when they’re with you. Finish off by highlighting some of the local attractions and adding some images of them too.
Sometimes you may need a helping hand when it comes to completing some of your short-term rental duties. And one way you can get this is by opting for Hospiria’s management software. With three packages to choose from, you can find all you need to ensure your listings are kept up to date and bookings are in order.
Whether you need to figure out the price of your rental, upload your listing onto multiple channels at once, or handle the finances in a more efficient way, Hospiria will always be there to help and make your job just a little bit easier.
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