Managers Owners Managing a vacation rental by owner property (VRBO) can be challenging. Updated March 2019… There is so much involved in creating a profitable vacation rental business that getting it right from the start is tough — manageable but tough. It is more than learning from a few websites and hoping for the best; adopting a strategy for marketing and operating the business professionally from the outset can yield more income and occupancy than any ad-hoc approach. These 10 points are a sample of the most common mistakes owners and hosts make. Maybe you have done one or two, and maybe you are still. Being able to take a step back and observe your vacation rental business from back behind the trenches will give you a better perspective as to the areas you need to improve your strategy. 1. Putting all your eggs in one basket In an earlier blog post, one of the suggested mistakes was listing on too many sites. When I wrote that, there were dozens of wannabee listing sites vying to take business away from the fast-growing HomeAway family. Airbnb hadn’t appeared on the scene for whole-home rentals at that time. Since then, we’ve come full circle with HA and Airbnb dominating the market to the degree that many owners seem satisfied with listing with just one. I suggest you spread the risk by broadening a marketing strategy and of course, building a home site as well. There are a multitude of hyper-local listing sites popping up that could deliver quality reservations without the draconian measures the OTAs expect you to comply with. 2. Relying on listing sites alone Following from #1, even if you decide to list on several sites, your property still becomes one of many – maybe thousands – competing for attention. The only way to stand out from the throngs is to create a website and use social media to drive traffic to it. It requires time and commitment but the results over time will speak for themselves. Check out ‘Free Is Not What It's Cracked Up To Be‘ for more information on free listings. 3. Being unprepared for emergencies A dripping tap might not rank highly as an emergency to you, but to a guest who has prepared for months for a much-longed-for vacation, it can be enough to tip them over the edge. And if it’s A/C or refrigeration that breaks down or a power outage in winter, lack of quick resolution can have severe repercussions. There are so many potential issues that can arise to disrupt a vacation, that not preparing for every eventuality is a huge mistake. Just because it’s never happened before doesn’t mean it won’t next week…. 4. Not being transparent about drawbacks We all like to think our place is perfect and everyone will love it, but take a moment to think about what you may be immune to. Perhaps it’s the occasional train whistle or traffic noise; maybe the bugs and critters that are part and parcel of experiencing your location, or the potholed approach road that’s not been fixed for years. The temptation is to ignore these things which seem minor to you, but the outcome of doing so will be evident in your reviews. 5. Pricing too high….or too low ‘My neighbor rents for $2000 a week and his place is a shack compared to mine'. That may be the case, but before you rush to slap a high price on your property, take some time to evaluate more of the competition. Your neighbor may accept all-comers and easily get the money from ten 18-yr olds wanting a party venue, who don't care they are being overcharged. You, on the other hand, are probably looking for more responsible groups who will respect your property. When pricing, look carefully at what is advertised on agency and listing sites for properties in your area and evaluate the facilities and features of your competitors closely. A common phrase heard recently is ‘race to the bottom’. This relates to some artificially low prices the listing sites may suggest as ideal. However there’s a danger in listing too low as well as this can also attract the more undesirable elements. 6. Skimping on amenities & supplies The key to great rental income is in repeat guests and 5-star testimonials. The way to achieve both is by going above and beyond the competition. If you provide the barest minimum in the way of features and facilities, your guests will either be barely satisfied or will complain after they leave. Expectations have risen significantly and what was seen as ‘luxury' a few years ago, now is considered to be standard. Yes, they do want an unlimited supply of toilet paper, shampoo and shower gel, good quality kitchen equipment, and up to date entertainment systems. If you don’t provide these, at least let your guests know what to expect so they aren’t surprised by their expectations not being met. This isn't a dollar-store business — it's a consumer-driven tourism industry that is rapidly achieving mainstream status as a vacation choice. It's better to be on the leading edge of it, than in the bargain basement. 7. Ignoring gut feelings Sometimes a conversation with a potential guest just doesn't feel right. The person might say something that makes you feel a little uncomfortable or they forget to tell you about a child or two in the initial application and it later comes up in a discussion on the phone. The question, “How many cars can we park there?” can be an entirely innocent one if a small family is coming up at different times and may bring a couple of vehicles, however, it could also mean a small wedding is planned they are conveniently forgetting to mention. If it doesn't feel right, sound right or sit comfortably with you, it is always better to err on the side of caution and politely reject the booking. 8. Underinsuring 18 months on from an incident that occurred at one of our managed properties, we are still dealing with the claim that followed. Fortunately, both the property owner and ourselves are well-insured and the lawyers for our respective insurance companies are handling the ongoing lawsuit. So, I’m always surprised to see questions on forums and Facebook groups from owners wondering if they need specific insurance when they rent out. Yes, is the unequivocal answer, and as much liability coverage as you can get! 9. Not being specific in Terms and Conditions In the days before instant booking, we had our guests sign rental agreements and agree to our Terms and Conditions. Maybe some of you still do this, but mostly we now rely on guests agreeing to House Rules posted on a listing site. Failing to specify how you manage your rental in the House Rules can result in over-occupancy, cancellation issues, refund and rebate requests, and other issues where guests can claim they didn’t know what was expected of them. Make sure you include policies on pets, extra guests, how you handle refund requests based on power outages and weather conditions etc. If you are taking a reservation directly, then a well written rental agreement is essential for your peace of mind as well as your guests’. It records the period of the rental, check -in/check -out times, occupancy limits, pet policy as well as any other restrictions you place on a rental. It saves any misunderstanding as you can easily refer back to the signed agreement in the event of a dispute 10. Failing to appreciate you are a part of the tourism industry The moment you accept money in exchange for short-term rental accommodation you have become part of the travel industry. This means displaying a high degree of hospitality at every step of the travelers journey. If you don’t want to do this and still want to be successful, self-management may not be for you, and the solution would be to engage a property manager All vacation rental owners will experience a range of issues and it doesn't take too long to get into the swing of inquiries, reservations, and rental agreements and finally, maximum guest occupancy. We all make mistakes at times and wish we had done things differently, but each one is a learning point that just creates a better business along the way. Please share some of your biggest learning points in the comments below.