Top Reasons to Do-It-Yourself Vacation Rental
By William May
Published: 03/15/14 Topics: Comments:
Ron and Cheryl are successful. He a physician. She a professor. They found their dream second home, spent money outfitting it perfectly, and looked forward to fun and profit.
Cut Out the Middle Man
Renting the house seemed like a good idea. It was only three hours from home and they found a book explaining how easy it would be. Find a reliable housekeeper, throw up a website, buy some ads, and renters will be pushing money at you! Ron and Cheryl decided to cut out the middle man to show everyone how smart they were.
#1 Websites are Easy
Cheryl used a do-it-yourself website company to build a website. It didn’t have maps, rates or online booking but it was cheap. Cheryl spent every night for a week getting it to work.
#2 Digital Photos Are Easy
Being a camera buff, Ron thought his photos looked good; until his grade school grandson asked, "Why are they so dark?" So he hired a professional photographer for hundreds more.
#3 Advertising is Easy
Cheryl placed ads on a big vacation rental listing website for just $329; but no one inquired. She bought others, spending hours every night posting new ads. After spending $1,500 in advertising she got her first inquiry - for a $500 booking.
#4 Guests Will Come Flocking In
In time, Cheryl started getting a few inquiries; but each wanted an hour of her time. She tired of recommending restaurants; and getting low-ball rental offers. People were rude. In the end, she figured she was earning $4 an hour.
#4 People Will Prefer My Place
Ron and Cheryl's house is gorgeous. Unfortunately three bigger houses in the neighborhood siphoned off their best leads. Ron cut his rates to compete. The competition cut theirs.
He pleaded "my place was better", but guests wanted it for half-price. He lost order after order.
#5 Friends Will Rent It
Ron posted flyers around the hospital and handed out cards at his club. Friends were happy to come but could not understand why good old Ron would charge them for staying.
#6 Housekeepers Are Everywhere
Cheryl figured she could find someone cheap to clean her place. But the first cleaners left the place dirty. She had to hire a cleaning company - at high prices. But whoops they don’t work weekends!
On the third reservation, the housekeepers didn’t show up at all. So Cheryl jumped in the car, drove three hours, and worked her fingers to the bone, only to have the guests scream because the place wasn’t ready on time.
The Guests demanded a big refund. It happened twice in the first six months.
Cheryl was embarrassed. She and Ron were losing money.
#7 Get a Cheap Handyman.
Everybody "knows somebody who knows somebody" who is a retired carpenter just dying to earn your $10 per hour, handle late night calls, and always shows up on time.
Ron found one who took the job but never answered his phone again. Ron realized this on a Saturday night and had to drive a six hour round trip to flip a fuse.
#8 Staff to handle problems.
Ron figured a well maintained home won’t have any problems. However it seemed that every other guest found a sink dripping or a lock sticking. The first year, Cheryl refunded $1,700 to guests when Ron couldn’t fix things fast.
#9 Guests will follow the rules
Ron was on site the day the first visitors arrived - but with two dogs. Ron demanded they leave.
The guests demanded their $2,000 back - in cash. He paid. It was too late to find replacement guests. Chalk it up to another loss for the "sure-thing" vacation rental.
#10 Nothing Will Go Wrong
The last guests drank and sang till the wee hours. Neighbors called demanding quiet. Ron apologized. The neighbor called the cops.
The next morning, the guests departed early and demanded a full refund because the neighbors harassed them.
Vacation Rental Math
For part-time amateurs, self-managing a Vacation Rental is a recipe for disaster. Ron thought the profit would be higher by doing the work themselves.
Cheryl would cut corners and cut out the middle man. What they forgot was there is no way to cut out the work.
Only a few mistakes caused their income to plummet. Adding their own time to the equation meant they were running in the red.
Cheryl began to hate the house. Ron began to hate guests. Being absentee landlords was creating a money pit. They were in over their heads.
Finding a Professional
A friend recommended a local vacation rental manager who agreed to provide a turn-key service for a reasonable commission.
He knew where to advertise and where not to. He pumped money into the marketing, answered the phone 24 hours a day, had reliable housekeepers, and was on call 24/7. Bookings rose, problems disappeared.
Ron and Cheryl are vocal advocates for owning a second home, but not of being hobby landlords.
They make more money, have no hassles, and enjoy the house when they use it. Best of all Ron and Cheryl are proud of their home and the customer service guests receive.
Now they can smile when thinking of their dream home.
Author: William May – Volunteer, Vacation Rental Association
Blog #: 0359 – 03/15/14