This page is part 4 of a step-by-step guide to get your business up and running. There’s no fluff here - just information, help, and suggestions for doing it right - the first time!
Everything in this guide comes from experience.
Not a mere 6 months of experience in running an Airbnb, nor a year of co-hosting.
This is from 25 years of being in the vacation rental business, owning 7 properties and owning a seriously successful property management company with over 180 properties.
Our team have attended and presented at countless conferences and we continue our education by sitting in on hundreds of educational presentations, and still do to this day. So, we can bring you the learning from all those experts as well.
So, sit back and enjoy the ride…or the read!
Contents of this step:
I started my property management business in 2003 on a wing and a prayer.
The only experience I had in vacation rentals was in managing my own cottages in Ontario from a distance (in UK). The word ‘experience’ is laughable in itself because there was no manual – or Facebook group – or conference – or networking – to teach me how to do it back in the late 1990s.
So when I moved to Ontario permanently and the first person asked me to rent out their cottage like I was doing with mine, I was clueless. Knowing your own place and managing others was two very different things and it took a considerable time before a routine became established and things started moving more comfortably.
What I learned over the next couple of years from many sources was invaluable and propelled my business into…
There’s a whole mess of moving parts in this business. It’s not like opening up a store, stocking with inventory, making it look attractive to customers and selling the goods from 9 – 5. Similar maybe, but with so much more.
As a host you have to manage every aspect of the guest experience to achieve that coveted five star review. And that means understanding the operational process, creating a seamless workflow and making sure everyone involved knows their role and carries out their part professionally, and according to your standards.
Missing out on, or mismanaging, any of the components can ricochet through the flow and create both short and long-term problems.
However, assigning some time to get all of your processes up and running, and onboarding your people in a structured way, is the recipe for success.
Just about everyone who starts off in this business does everything themselves, and it can be an overwhelming task. One minute you are talking to a guest who can’t decide which property to choose, then you are heading off to deal with an issue (that usually requires latex gloves and a plunger!!), then you’ll be back to deal with a cancellation before getting your head down on your bookkeeping.
It's a mammoth task that can often be exhausting, and not everyone is up for it, which is why many of these businesses fail.
Unless you are paying someone to manage it all for you, this can never be considered a passive income stream.
There are plenty of software options available to help your business run on rails, but before you build out your tech stack, you need to breakdown all of the different tasks and roles you are doing now.
I recall starting out with my first property and then quickly buying a few more. Before I had time to really figure out what I was doing I was managing four of my own. Then some neighbours got wind of what I was doing and asked if I could manage theirs too.
They had no idea I was such a beginner and was winging it right out of the gate.
Talk about imposter syndrome.
It didn’t take long to realise what worked, what didn’t and what a mountain of work there was involved.
Just to remind you of all the roles you might occupy right now, here’s a quick list, together with the sub-roles within.
Responsible for overseeing all aspects of the rental property, including maintenance, cleaning, and guest communication.
Responsible for managing reservations, coordinating check-ins and check-outs, and handling guest inquiries.
Responsible for ensuring that the rental property is clean and well-maintained before and after each guest stay.
Responsible for performing routine maintenance tasks and addressing any issues that arise during guest stays.
Responsible for promoting the rental property through various channels, such as social media, online advertising, and email marketing.
Responsible for managing the rental property's finances, including tracking expenses, managing cash flow, and preparing financial reports.
Responsible for responding to guest inquiries and resolving any issues or concerns they may have during their stay.
Let’s just take one of those roles and break it down even further:
This is the person (likely you) who manages all aspects of the reservation process, including:
Monitoring and managing bookings, processing payments, and managing cancellations or changes.
Coordinating check-in and check-out procedures for guests, including providing detailed instructions and access information.
Responding to guest inquiries and providing information about the rental property, local area, and attractions.
Managing listings on various OTAs and ensuring that availability, pricing, and descriptions are accurate and up-to-date.
Monitoring occupancy rates and adjusting rates and availability as needed to maximize revenue.
Communicating with guests via email, phone, and messaging platforms to ensure a seamless booking experience and address any concerns or issues.
Working with your housekeeper/cleaner (still likely to be you) to ensure that the rental property is clean and ready for each guest stay
Maintaining accurate records of reservations, payments, and guest information.
Conducting regular audits of OTA listings to ensure that they comply with brand guidelines and policies.
Developing and implementing strategies to increase direct bookings and reduce reliance on OTAs.
In a business that includes managing different channels, the Reservation Specialist would need to be proficient in using various reservation systems and software tools, as well as having skills in managing multiple platforms and adapting to different booking processes and procedures. Effective communication, attention to detail, and the ability to manage multiple tasks simultaneously are key skills for this role.
….and that’s just the first role
You should have the idea now where we are going with this.
It’s easy to get into a rut of working all hours for little return, and teasing out all these different tasks from each role may not seem helpful at first, but stay with us.
The best is yet to come!!Now you have your reservation operations tackled let’s move onto toilet plunger duties.
Just kidding….not kidding.
If you’ve been in this business more than a few months, you’ll know that basic plumbing operations are a part of it, and unless you have a handy person on speed dial, you’ll be the one at the end of the plunger.
This is why you can give yourself the title of……
The Housekeeping Manager plays a critical role in ensuring that the rental property is clean and well-maintained before and after each guest stay. Here are some of the job tasks typically associated with this role:
Managing the cleaning team (this assumes you have someone doing the cleaning….don’t do this yourself!)
Developing and implementing housekeeping procedures and checklists to ensure consistent and high-quality cleaning standards.
Scheduling and assigning cleaners to ensure that the property is cleaned and prepared for each guest stay.
Conducting regular inspections of the home to identify any maintenance or cleanliness issues and addressing them promptly.
Monitoring inventory of cleaning supplies and equipment and ordering additional supplies as needed.
Coordinating with the Reservation Specialist to ensure that check-in and check-out procedures are smooth and that the property is ready for each guest stay.
Ensuring that housekeeping staff comply with safety and sanitation guidelines and regulations.
Maintaining records of housekeeping schedules, cleaning procedures, and inventory.
Managing relationships with outside vendors, such as laundry services and cleaning supply companies.
Identifying areas for improvement in housekeeping operations and developing plans to increase efficiency and effectiveness.
Alright – let’s leave it at that. We’re going to explore all these roles in a little more depth but for now It would be a good idea to develop some standard operating procedures for each role.
Standard operating procedures (SOPs) are a set of step-by-step instructions that describe how to perform a specific task or process. In our business, SOPs are essential…mostly for the reasons listed above.
If you don’t clearly state every element of your business you will find it hard to pass the baton when you eventually hire your first person. This means documenting everything you do. Yes. Everything.
Confession here. I didn’t do any of this. When our first hire came on board, it was so hard to tease out all the different tasks we wanted her to do, we probably added on at least a month in the onboarding process.
If our SOPs had been clearly stated with written and video documentation, we would all have had a much easier time. Here’s a few more why’s…..
SOPs ensure that all tasks are performed consistently, regardless of who is carrying them out. This helps to maintain a high level of quality in all aspects of the rental management business, including guest experiences, cleaning and maintenance, and communication with guests.
By having a documented set of procedures, tasks can be completed more efficiently and effectively. This saves time and resources, reducing questions and increasing understanding.
SOPs are an essential tool for training new staff members. They provide a clear and concise roadmap for how to complete specific tasks, which can reduce the learning curve and increase productivity.
SOPs can help ensure that your business complies with local laws and regulations. For example, you may have an SOP that outlines the process for handling noise complaints or ensuring that your properties are accessible to guests with disabilities.
If you already use a digital guidebook with your guests, you already have SOPs in place. Think about it for a moment.
Some of the reasons you have the guidebook is to answer questions; reduce the potential of issues/problems arising during a guest stay, advise on procedures (how to put out a campfire, how to light a barbecue), and to generally smooth the way for them.
Creating a handbook with all of your systems and procedures in it, is just the same. The way to look at is to imagine you are taking a vacation and have a friend or family member taking care of your business while you are gone. What will they need to know? What happens in case of a guest call etc?
Most importantly, documenting everything you do is a great reminder for you as well.
Let’s take your housekeeping tasks as an example. You could:
Create detailed checklists for housekeeping and maintenance staff to follow.
Establish clear standards for cleanliness, maintenance, and repair of the property.
Train staff on the proper procedures for cleaning, laundry, and other maintenance tasks.
Establish a schedule for routine maintenance and cleaning tasks.
Set up a system for reporting and addressing maintenance issues and repairs.
Establish clear protocols for handling lost and found items, damaged items, and guest complaints related to housekeeping and maintenance.
Having set up all your procedures, you might already be feeling better about meeting your guests’ expectations but what happens when your vendors let you down?
The landscaping crew turns up a day early.
The HVAC repair company don’t answer the phone at the weekend.
The chef you arranged to cater a birthday dinner cancels on the day.
The laundry service fails to deliver linens ready for a changeover.
These are just a few instances where relying on third parties can cause major issues.
While no amount of planning can achieve 100% problem-free service, careful vetting and coordination of third-party vendors can give you more confidence.
Luxury property manager, Caleb Hannon from Stay Lake Norman, talks about the importance of developing relationships with vendors in this podcast episode.
Systematic management of vendor relationships is critical to the success of a property management business, so it’s essential to do this right.
Strong relationships with vendors can lead to better negotiating power. When you have established a good relationship, vendors are often more willing to work with you on price, payment terms, and other important factors that can help your bottom line.
Establish clear contracts and agreements with vendors, including pricing and service level expectations.
Set up a system for managing vendor invoices and payments
Monitor vendor performance regularly to ensure that they are meeting your standards
Address any issues or concerns with vendors in a timely manner
There is plenty of software available to help with setting up systems to manage vendor activity – systems that will take care of invoicing and deliver reports on performance etc., but the relationship side is up to you to create and nurture.
Third-party vendors play a crucial role in the success of your short-term rental business. By building and maintaining a good relationship with them, you can ensure that they provide quality services on time, which can lead to satisfied guests and positive reviews.
Another useful aspect of maintaining a good relationship with third party suppliers is their valuable insights and information about industry trends, best practices, and other useful tips. You can tap into this knowledge and stay ahead of the curve in terms of improving your short-term rental business and being more competitive.
Being proactive is the key to developing and maintaining these relationships.
Years ago, guests brought everything with them. There was rarely a chance of finding a hair dryer in a bathroom, let alone any more than a single roll of toilet paper. Happily things have changed, and so have expectations. Meeting those expectations is a challenge for all hosts and managers from a cost-effective standpoint as well an organizational one.
One of the biggest mistakes we made in our company was not carrying up to date inventories on each property. We had minimum standards we shared with owners during the onboarding phase, but failed to carry out regular audits.
Then we were dealing with complaints when something got broken and wasn’t replaced.
‘Inventory’ covers everything that the guest will use at the property, from kitchen items to light bulbs, to propane for the BBQ and paper products. There is a lot of stuff that can go missing, get broken, and get used.
Having inventory control is the primary piece of the supply chain puzzle particularly for multiple properties. On any given changover day you need to know what is in a property and if stock needs to be replenished.
Andy Meddick, the former owner of Seachange Vacation Rentals in Delaware, often posted photos of his stock of linens, and the issues involved in keeping track of them. Of course, having a housekeeping manager would be the ideal solution but that may be a later stage hire for many businesses in the start-up phase.
For now, and if you are managing all of this yourself:
Develop an inventory management system for tracking supplies such as linens, towels, and toiletries.
Establish clear protocols for ordering, receiving, and storing supplies.
Monitor inventory levels regularly to ensure that you have adequate supplies on hand.
Establish clear standards for the quality and quantity of supplies provided to guests.
Monitor usage patterns to ensure that you are not over or understocking supplies.
All of the above can be handled well if there is a clear line of communication with cleaning & checking teams. Get the systems in place and share them with staff and housekeepers to get their buy-in to the importance of good inventory maintenance.
Stuff happens and in a busy rental management company, stuff often happens when you least expect it.
Years ago I created a presentation about writing an emergency plan. I included events like hurricanes, wildfires, and other extreme weather events. All the things that might have been foreseen but maybe not planned for. At the end of the presentation I joked that you might also consider more far-fetched possibilities such as a zombie apocalypse and ….yes, a global pandemic.
At the time I wrote it, H1N1 and the Zica virus were all over the news, and people were getting into panic mode. Little did we know what was to come, but it seemed
It seemed funny at the time.
Now, we are looking at prepping for the zombie apocalypse!!
The best plan for handling emergencies is having a thorough plan to handle emergencies. Most people in the business talk about things that may happen, but few of them document what they would do in the event of one happening.
It was fortuitous that I’d prepared that presentation because when Covid arrived, we had the bare bones of a plan to manage the fallout. We went quickly into 5 months of business shutdown, and we survived.
Since we didn’t have all of our eggs in the Airbnb basket (in fact we had no eggs in the Airbnb basket), we were able to manage our own bookings and make the best arrangements we could with our guests.
With almost a whole summer of rentals booked, it was a tough time, but as we had full control, it went well. We dealt with worried owners who saw their income disappearing, and guests who feared traveling even when things opened up again.
Our team worked tirelessly, and according to the plan. 2020 and 2021 turned out to be the best years we’d ever had in the business.
Everyone needs to know what to do in case of an emergency.
Here’s some examples:
Guest claims there are bedbugs or they have contracted hot tub folliculitis (yes, that is a thing).Cleaner calls on check out day to say guests have not departed and appear to have gone out for the day (they got their checkout day wrong).Guests arrive a day early for their vacation having driven 4 hours.
Cleaner fails to turn up to a remote location for a changeover. There is no backup available.
Guest complains because a goose has died on the lawn and it has traumatized their children (true story).A bear broke into the cottage and is raiding the fridge (true story).I could go on.
In fact there is a book in waiting – after 20 years in this business, it will be a good one!
Seriously, all the situations listed above happened at some time or another, but we were never surprised.
Each one (or a variation of them) had been discussed before and a plan created so whoever was in charge that day knew what to do; what steps to take, and who needed to be contacted.Creating an emergency plan is simple – it just needs a little dedication and focus.
Develop clear protocols for handling emergencies such as fires, floods, and medical emergencies.
Establish a communication plan for notifying guests and emergency responders in the event of an emergency.
Train staff on emergency procedures and protocols.
Establish a system for documenting and reporting incidents such as lost or damaged items, guest complaints, or accidents.
Develop a plan for addressing any legal or liability issues that may arise from incidents or emergencies
Back in the good old days of renting out a vacation home, when a sign on the lawn and a classified ad was all you needed to score a fully occupied season, there was nothing technical about it.
All you needed was a calendar, a spreadsheet, a fax machine, a telephone (yes, we spoke to people then), and some time to chat to prospective guests. When they arrived, the key might have been under the mat, and from there on, they fended for themselves. At the end of the stay, they fired up the old Hoover, mopped the floors, cleaned the bathrooms and departed, leaving a nice clean place for the next guests.
Thankfully, in most respects, those days are long gone and in their place are systems and processes to ensure a great vacation for guests without them having to lift a finger. From reservation software to digital guestbooks; cleaning and hospitality apps to methods of remitting lodging tax, there’s not much left in our vacation rental business that hasn’t been subject to technical advances.
However, the big problem in all this is the vast array of software currently available.
What do you need?
What will make life easiest?
What is most important?
Every vendor out there is vying to meet your tech needs. They will all claim their bells and whistles are better than their competitors bells and whistles, when what you need is a solid foundation of software that will work for you.
When it comes to running a vacation rental property management company, having the right technology is crucial for success. A basic tech stack can help streamline operations, automate tasks, and improve communication with guests and owners. Here are some essential components that should be included in a basic tech stack for a vacation rental property management company:
A good property management system will help you manage reservations, inventory, pricing, guest communication, and more. It acts as a central hub for all your vacation rental operations, allowing you to efficiently manage your properties and bookings.
A channel manager allows you to manage your listings across multiple platforms such as Airbnb, Booking.com, and Expedia. Most PMS platforms have channel managers built in, but you need to ask questions about the functionality and integration and be very clear on what is offered and at what price.
Dynamic pricing software allows you to adjust your rates based on factors such as demand, seasonality, and events. It can help you maximize revenue and occupancy by setting optimal rates for your properties.
Online payment processing allows guests to pay for their bookings online, which can help improve cash flow and reduce payment processing time.
If you are managing cleaning teams, this will help you organize and schedule your cleaning and maintenance operations more efficiently. It can help you assign tasks to cleaners and maintenance staff, and track their progress.
This allows you to automate some of the before, during, and after their stay communication with guests. It can help you send check-in instructions, answer frequently asked questions, and solicit guest feedback. Be cautious with this though – personal connections are so important so don’t tempted to automate everything.
If you weren’t aware before this, there is a lot involved in running a successful property management company.
Having a basic understanding of all the moving parts is a good start.