The Vacation Rental Formula Road Map

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This is a wonderful business…..

….and this resource is designed for those who have decided they want to be a part of it, or are already immersed in the industry and either need a helping hand, or a boost to take their business to the next level.

Perhaps you have owned a second home for years, but don’t use it as much any more.

Or you’ve been renting it out haphazardly and could benefit from a more structured approach.

Maybe the time has come to expand and grow and start managing properties on behalf of other owners.

But it’s tough to find the information and support you need to know you are getting it right from the start.

What you need is a blueprint…a road map…..a formula to follow.

A method of taking action that you know will work because it has worked for others.

You see — all vacation rental owners and managers go through the same processes, and from beginner to seasoned pro, they look to get better every step of the way.

This page is here to explain how they get this done and achieve great results.

Lets look at what’s involved in….


The VR Formula

for•mu•la

  • a conventionalized statement, expressing some fundamental principle

  • directions, for making something

  • a method,pattern, or rule for doing or producing something, often one proved to be successful

 

The word brings to mind chemical equations and mathematical concepts and conventional statements. For us, it means a recipe that has been tested over and over again to make sure it comes out right each time.

But any recipe can be adapted to meet differing needs – the availability of ingredients or for the specific taste of the consumer.

So, this formula is grounded in trial and error to create a solid foundation, then enriched with the variability of a diverse population of owners and managers and…of course…guests.

The formula is what successful owners of a single property have used to create a comfortable income, and the same one that managers of multiple properties have applied to ensure constant growth.

It works because it draws every aspect of good vacation rental business practice into one clear blueprint for success.

We’ve used it as the foundation for the successful purchase, set up, operation and management of multiple independent properties.

We’ve used it to grow a property management business from the ground up, to a profitable and saleable business that supports a very comfortable lifestyle.

Before you go further, think a moment about what you want out of this business, because a commitment to success should be your primary goal.

This isn’t easy and no-one who really knows what this success looks like can tell you any different. But it’s a lot of fun and is hugely rewarding for those who take the steps to make it happen.


So what is this formula about?

What can it teach you that you don’t already know?

What if you are half-way there already and just need the proverbial kick to get you moving?

Well, let’s take a look at the steps the formula follows and take note, this starts from the beginning, with the product, because…

…there is little point or profit in understanding the component parts of it without being able to see the big picture.

 

The Steps to Vacation Rental Success

Here are the steps,

  • Research and Understand the Market
  • Prepare the Property for Rental
  • Create a Marketing Strategy
  • Manage the Operation of the Business
  • Create a Core Guest Satisfaction Plan
  • Grow the Business

Pay close attention now – we’re about to reveal the exact process we’ve used to buy, set up, and fully book our properties, and how we grew a rental agency from 5 to 200 homes.

 


Step 1 – Research and Understand the Vacation Rental Business

vacation-rental-road-map-step1

This is a multi-generational business.

Not that long ago, it was primarily boomers who owned vacation rental properties that were often much-loved second homes.

The owners simply wanted a little second income and opened their doors to paying guests mostly on an ‘as is’ basis. That meant they didn’t do much in the way of preparation or clearing up, or even in creating any type of welcome.

 

Guests (they were known as ‘renters’ then) were generally happy to experience the lifestyle on offer and willing to overlook the oddities of self-catering because it was a new and unique way of living the life of a local.

As vacation rental grew in popularity, so more investors saw the benefits of buying solely for the purposes of short-term rental, and what was essentially a mom and pop business began to mature into a full-blown industry.

And here we are today….

…with people from every walk of life; millennials, entrepreneurs, young families, as well as retirees now getting involved.

…with vacation rental listing sites that have grown from being struggling start-ups offering free listings, into multi –billion dollar companies.

…with the consumer demand, competition and media focus that a rapidly growing industry must deal with every day.

And every day, more and more people want their piece of the action.

So things have changed

…and changed dramatically

We are no longer able to capture the attention of the traveling market by putting up a sign on the lawn, or an advert in the local grocery store.

The days of the ‘rental directory’ the size of a phone book are gone.

No-one wants to fax an agreement or even spend more than 10 minutes on a transaction from beginning to end.

Paying by cheque is no longer an option – and who has them anyway?

Now we are dealing with a whole new world that has its’ own vocabulary such as:

  • OTA’s
  • Dynamic Pricing
  • Channel Distribution
  • Revenue Management
  • Superhost Status
  • Short-term rental advocacy

And having to manage a whole range of other issues from the ground level of neighbor relations to local by-laws all the way to growing state/provincial and federal involvement.

It’s no longer a matter of throwing out opening the place up and expecting they will come.

That won’t happen any more.

To be successful in the VR business:

  • you have to know the industry
  • be aware of the legislation that might impact it
  • appreciate what used to be your competition is now your network
  • be prepared to learn and adapt to meet the ever-changing landscape of vacation rentals and flexible enough to make the changes.

ARE YOU READY?

Do you know:

  • Your target market and where the majority of rental guests come from to your location?
  • Who your closest competitors are – their rates and where they advertise?
  • the dollar value of the maximum amount of vacation rental days you can offer?
  • how to find the industry information you need to stay informed and up-to-date with changes in the industry?
  • the legislation and regulations that relate to vacation rentals in your area?
  • frequently check your competitors blogs and social media posts?
  • what differentiates you from your competitors and know exactly what they do better than you?
  • all the websites, blogs and forums relating to your specific niche?
  • all your local activity providers and keep a spreadsheet with their web site addresses, email and telephone numbers and with their valuable content highlighted?

 

 


 

Step 2 – Preparing for Rental

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This is a warning:  There is a lot of material available on marketing a vacation rental yet there is little point in becoming an expert in, for example, Facebook advertising or Search Engine Optimization (SEO) or of building your own website, in and of itself, if you don’t have a solid product to promote.  Getting this part right is the foundation for all that comes after!

Let me start with a story.

Now this goes back a few years but it’s worth the telling because it shows just how far the industry has come in the past fifteen years or so.

My first trip out to Canada in 1998 was to a family wedding and we (all 12 of us) stayed in a ramshackle cottage perched on a rock overlooking a beautiful lake. We’d stayed in vacation rentals in the UK and had fairly low expectations which were certainly met.

The place hadn’t been given a thorough clean in years; the bedding was damp and mildewed; the holding tank was full so we could not use the indoor washroom but hey…there was an outdoor ‘dunny’ that was adequate as long as we didn’t mind sharing it with a trillion mosquitoes. We didn’t bother too much with indoor entertainment as there was too much swimming and fishing to do, until the storm came and knocked the power out for 2 days. Sitting round the campfire is not as much fun in the rain and wind, so in we came and played as best we could with half a set of Monopoly (no dice) and a a pack of 49 playing cards.

Every kitchen cupboard was full of stuff. From opened packets of flour and pasta (that the mice had found long before us), to a mish-mash of pots and pans long over-due for replacement, and the ubiquitous rusty potato peeler and blunt knives.

You might think this is a horrendous tale and we should have hotfooted it out of there, but that was pretty much standard in those days.

Like the time we arrived at another rental cottage after an 8 hour flight and a four hour drive to find the owner there to greet us….well I think that was his intention, but his previous nights revelry had got the better of him. He opened the door bleary-eyed and said he’d just woken up and the place wasn’t ready for us.

Two days later I had the place cleaned, had bought sheets and towels, and we were settled in, but the experience was enough to get me thinking about how I would do it differently.

Fast forward to today and I’ve rented out 6 properties of my own and managed another 200 on behalf of other owners.

This business has changed almost beyond recognition and although there are still a few dinosaurs left out there thinking their properties are a good home for cast-off furniture and yard-sale junk, successful owners have a very different perspective.


20 Years of Vacation Rentals

1995 Possible indoor plumbing, TV with rabbit ears and a cassette player, a few old jigsaw puzzles and a well-used pack of cards..mice came as standard. No welcome book. Bring everything.

2000 Washing machine, bigger tube TV & boom box, jumbles of pots and pans and cast-offs; blunt knives and a rusted can opener. Welcome book is 2 sheets of coffee stained paper with instructions on how to turn on the water supply and where to take the garbage. Bring bed linens, cleaning supplies and toilet paper.

2005 Dishwasher, ensuite bathroom to master bedroom, bed linens a little threadbare but passable, used furniture, clock radios, fridge without owners food inside, stereo system with multi DVD player. Welcome book is 3-ring binder with paper in plastic pockets and tourist information from 3 years previously.

2010 Flat screen TV with satellite or cable & DVD collection, iPod docking stations, baby gates and safety equipment, duvets with removable covers, themed children’s bedrooms, clean but basic kitchens, non-stick pots and pans. Property Manual has lots of graphics, instructions on using all the appliances and some restaurant reviews in a custom binder.

2015 Complete entertainment systems with large screen TVs, Wii or Play Station; unlimited Wifi for streaming Netflix; all king or queen beds or twins for children; charging stations for devices; concierge services; high quality kitchen equipment with stainless steel appliances; 500 thread count sheets; property information is displayed on iPad with welcome video.

Getting ready for rental means knowing your clients, their wants and needs.

And they are demanding.

When they don’t get what they expect or want, they will head to social media and the review platforms to vocalize their displeasure…more of that later.

We always have to be one-step or several strides ahead of these demands and expectations, and when you do this you’ll find you are prepared for them.

Getting prepared means outfitting every room with the furniture, amenities and facilities that your target market expects, and then exceeding those expectations.

You have to consider what you need to supply in the way of:

  • Entertainment and technology
  • Beds and bedding
  • Family friendly amenities
  • Kitchen and dining supplies
  • Outdoor equipment and furniture
  • General comfort – lighting, furnishings, etc
  • Fun stuff – toys, games, outdoor gear
  • Safety features
  • Ambience – the WOW factor

And anything else you can do to make your property better than your guests’ home because that is what they now expect.


STEP 3 – Create a Marketing Strategy

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Marketing for vacation rentals used to be a simple matter.

Buy a listing on a site that advertised similar properties and wait for the enquiries to come.

Seriously, it was as easy as that.

The site was VRBO and it was the pioneer in the market that has morphed into the massively competitive behemoth we have to contend with today.

VRBO is still there as a part of Homeaway which is now owned by Expedia; the old favorite Flipkey has been swallowed up by Trip Advisor and if you check the branding of another popular site Vacation Home Rentals, you’ll see this:

VHR-by-tripadvisor

Given Trip Advisor’s history with Flipkey, there is a good chance this will too become a part of the big Trip Advisor picture.

Then there is Airbnb with 0ver 1.5 million listings in more than 190 countries……

You must wonder how your listing could possibly be seen and you are not alone.

Algorithms change every day, and just throwing money at premium listings can no longer guarantee a page one showing of your property……or even a page 4 or 5 or 12…

Think of it this way.

Let’s say you have a villa in Orlando and pay for a premium listing in the expectation it will push your listing up the rankings and get it seen by many more people.

But there are 15000+ properties listed in the Disney area and you can bet that a lot of those owners are thinking in exactly the same way as you are and fronting up with the premium fee.

Even if only 1% of owners did that, you would still have to fight the 150 others who have the same expectations as you.

And on top of that you have to contend with the algorithms that push properties likely to make HA more income into the spotlight.

It’s pretty much a no-win situation if all you do is list on the big sites.

You have to do more. Much more.

Is it worth it you ask. Maybe not, if you are not interested in getting a little work done, moving the bar up and growing your visibility.

But I am thinking, since you are here and have read this far, you do think it’s worth working at.

So here is what you have to do to market your vacation rental and really see results.


Create a website

Your website is your foundation for all your marketing efforts.

Whether you do it yourself, hire a web designer or use a site such as Web Chalet or MyVR , the outcome should be a well-designed, easily-navigable, content-rich site.

MyVR

Most sites you see now have wonderful high-def images that capture the imagination and create desire right from the start.

You need to invest in this and take it seriously.

Before you start, think about branding with:

A logo

paradise-found the-houses


Property Name

Once again, visitors want to connect and having a name for the property just it easier for them to identify the place and remember it.


URL (Website name)

This doesn’t have to be the same as your property name. For SEO purposes you might want to find a name that reflects the location and is more along the lines of the keywords visitors are likely to use.


Content

When your combined marketing efforts sends people back to your website you have to give them great content to read. A list of amenities is simply not enough.

Your goal is to make it sticky…that means you want people to stick around when they get there…so giving them a lot of local information positions you as an expert. Even if they don’t book this time, they will come back to your site to get the info.

This is why book stores have plenty of comfortable seats, a coffee shop, a kiddy play area and other stuff for people to browse. Fewer are buying the books but they want to keep the customers coming…and one day they will buy that book.

Having content that delivers all the information they need to plan their trip can make the difference between a reservation and a click away from your site.


Blog

This is where you can shine as a location expert and it’s not as difficult as it may seem. If you love your location, you’ll be able to write about it and share the best parts. Here’s a quick start with 10 blog topics:

  1. What to pack for a vacation in xxxx
  2. 5 of the best restaurants
  3. 10 activities for a rainy day
  4. Top tips for enjoying the beach
  5. Hiking trails only the locals know
  6. What to buy at the Farmer’s Market
  7. Factory stores you should not miss
  8. How to stand up on a paddle board
  9. How to cook the local fish
  10. 3 Driving tours for a great day out

Once you have built a foundation of blog posts and great content on your site, then you have somewhere to send your traffic from your social media outlets.


Social Media

OK – here it is.

You’ve been expecting it, so don’t hide away. You cannot get away from it.

But social media has now moved in distinctly separate areas and if you can get to grips with this, you’ll have a great understanding of how it can work for you.

Strategy works with all social media platforms and you need to know what to do to make each one work for you. Here’s the 4 key areas:


Social Influencing

This is where you get to show how much you know about your location, by sharing images, content and links to other interesting sites.

Thibault Masson does this wonderfully on his Instagram account – he has one for St Barts where he has two villas, and one for Bali for the two homes he has there.

realbali

https://www.instagram.com/realbali/

Nancy McAleer and Terri Mason together with their husbands, own properties on Anna Maria Island and rock their social influencing on Pinterest. They have created 75 boards promoting everything and everything to do with vacationing on the island and have 2.5K followers.

Now that is influence.

anna-maria-island-beach-life

 

Social Networking

It’s all about engagement.

In the old days, if we had something we wanted to get out, we used a press release – a statement sent to a range of journalists and writers that we just hoped would stand out from the hundreds of similar pieces they received every day.

Nowadays you need to find out where the travel writers and bloggers hang out and begin engaging with them.

Social media should not be used to direct market – by that I mean to constantly tweet, blog, post images of, and brag about your home. Instead, reach out to your audience and get to know them.

 

maui-questionsSocial Listening

The world is out there on the airwaves saying what they want, asking questions and looking for advice.

Have you ever checked out the Trip Advisor Forums? This is where prospective travelers go to ask questions about locations, and the answers are there for everyone to see.

These questions are all those that have been asked about Maui recently:

arrows_set11.

There is so much you can do with this information.

  • Write blog posts based on each topic
  • Create short Youtube videos
  • Write a guide that delivers the information i.e. An Insider’s Guide to Getting Married on Maui
  • Use the topics for podcast episodes
  • Or just answer the questions as you find them by sharing your local knowledge.

People are asking plenty of questions on Twitter as well. You just need to be there to hear them.

 

 

Social Selling

This is where you get to actually drive people to your Booking form, but they will rarely go there without some engagement with you first.

If you succeed at listening, influencing and networking, then the selling part may be the easiest of them all.

The Calls to Action (CTA) that you use on your website and in your social media engagements should have the goal of getting people to book.

Lead Generation and List Management

If you have just looked at this title and rolled your eyes because you haven’t a clue what I am talking about, here’s the Cliff Notes:

People come to your site (if you have one) every day, look around, and let’s face it, the majority of them will move on without booking.

If you can capture their email address and offer to send them information on your location and a regular newsletter, you have generated a subscriber.

You’ll need an autoresponder service – such as Aweber or Mailchimp to add the email addresses to a list, but once you have that you can set up a sequence of messages that are automatically sent.

Then you broadcast with topical news about your specials and deals directly to your list.

The more your list grows, the more people are given the opportunity to come back to your site…and are consistently reminded about it.

  • Create a downloadable document that provides information that visitors cannot get anywhere else on your listing or site. (called a Lead Magnet)
    Insider-Guide-inside-white
  • Have the document professionally prepared with graphic design and artwork. Use fiverr.com or find a designer on www.upwork.com
  • Sign up with an email marketing platform such as Aweber or Mailchimp
  • Create an autoresponder series of emails to send as soon as a prospect has downloaded your lead magnet.
  • Use a double-optin format to ensure the people signing up realize they will continue to get email from you. This also keeps you within Can-Spam guidelines.
  • Create a newsletter template and send newsletters monthly to keep your list informed of special offers, upcoming events and topical news.

 


Step 4Managing the Operation of Your Business

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So you’ve done the research, the property is set up and staged, your marketing plan is in place and you are ready to rock and roll.

Let’s get those bookings coming in.

But just hold on a moment…..

Before you get to this point you have a little more to do, to make sure that everything goes smoothly.

And this for some could be the boring stuff – the systems and the processes that you must have in place before anyone walks in the door or even reserves a vacation with you.

When I first got into the vacation rental business I thought I could do it all on my own and I was so wrong.

 

I knew I needed a website so I tried to learn how to use WordPress which took a massive amount of time, was frustrating and stressful, and the outcome was clunky and ugly.

  • My business systems were home-made with spreadsheets, paper calendars, a lot of post-it notes, and irritation when someone else couldn’t figure out how to navigate them. And I double-booked someone!
  • My photography was pretty poor. The images seemed OK but when compared to the competition that had used professional photography there was no comparison.
  • I decided to do my own changeover management – and wasn’t emotionally detached enough to walk in to a recently vacated property and not get upset by the way guests had left it. And no-one ever left it in a really poor condition – it just was not to my personal standard, and I got unreasonably stressed and annoyed.
  • There were no processes in place to deal with things like cancellation, or the weather delaying a guest arriving, or the TV breaking down, or an epidemic causing owners in our agency to demand their properties back for their own use (yes, this happened in the SARS outbreak in Toronto in 2003).
  • My properties were advertised on several sites – I knew enough to do that – but it was all done manually. Every time I got a booking I had to update several calendars, and any minor change or amenity addition or new photo required time to amend three or four listings.

 

Because I was so determined to have control over every aspect of my little business, and wasn’t prepared to invest in help, I got bogged down with the technical aspects, and the strategy suffered.

The best book to read about getting a business up and running and making it profitable is the E-Myth Revisited by Michael Gerber. It’s not a mighty tome by any means, but there’s a lot of wisdom in these pages in terms of how you manage your processes.

e_myth_revisited

From The E-Myth Revisited:

“The fact of the matter is that we all have an Entrepreneur, Manager, and Technician inside us. And if they were equally balanced, we’d be describing an incredibly competent individual.

The Entrepreneur would be free to forge ahead into new areas of interest; The Manager would be solidifying the base of operations; and The Technician would be doing the technical work. Each would derive satisfaction from the work he does best, serving the whole in the most productive way.

Unfortunately, our experience shows that few people who go into business are blessed with such a balance. Instead, the typical small business owner is only 10 percent Entrepreneur, 20 percent Manager, and 70 percent Technician.”

Most vacation rental owners and operators of small property management companies are typical small business owners. We work IN the business 70% of the time, rather than concentrating on working ON the business which is the path to success.

I’m assuming you are familiar with the expression – “Jack of all trades, master of none”?

If not, I headed to Wikipedia for their take:

“Jack of all trades, master of none” is a figure of speech used in reference to a person that is competent with many skills, but spends too much time learning each new skill that he/she can not become an expert in any particular one.

 

To succeed in this or any business you need to get Jack out of your head and invest in the help you need.

Believe me, this is money you need to spend, because in the long run the savings are huge!

There is no longer any necessity to do the tech work yourself – there really is an app for everything…….

 

Reservation management

booking-systems

A good reservation system will streamline the booking process from the moment your engagement with a prospective guests becomes a commitment to book.

For them it should be a simple online process to fill in a form, send a payment and receive a confirmation.

No interminable email correspondence, scanning or faxing of documents, and posting cheques.

Just a quick and easy few minutes booking a longed-for vacation, or even a last-minute getaway without any hassle or time spent on unnecessary.

You can still communicate with them and show your hospitable and welcoming side, but take the pain out of reservations.

There’s a huge range of reservation systems available, ranging from simple systems for owners of one property to vast feature-filled (and very expensive) booking software programs.

Deciding which one works for you is important because you don’t want to change horses in mid-stream, and if you are planning on business growth, you need to choose the right one that will support that from the start.

When you are choosing a reservation management system you also need to consider

  • Website integration
  • Channel distribution
  • Revenue management
  • Dynamic pricing
  • API connections
  • Calendar synchronization

 

Whoah…hold on…I hear you say.

What do these even mean?

Over time the vacation rental industry, like any other, has spawned its own collection of jargon, so it is worthwhile understanding these, so you can talk VR like a pro.

One area you will need to work on, because this is determined by your own choices for your vacation rental business are your internal systems and procedures.

In a nutshell, you will need the following:

 

Rental agreement

This identifies the specifics of the agreement – who the parties are (you as owner or agent and the guest); the period of the agreement (check in and out dates and times); the fees/rates payable (including damage deposit); the date range for payment, and the signatories to the agreement.

 

Terms and Conditions

These lay out your policies on booking and payment, cancellation, pets, smoking, use of amenities, damage deposits, cleaning expectations and waivers of liability etc.

 

Payment processing

Yes, the most important bit!

Your guests want to easiest way to pay you. And when they are excited about booking and have credit card in hand, you want to secure it then and there.

Don’t ask for a cheque or money order. For the first, very few people have cheque books anyway so this might necessitate a trip to the bank, as does the second. You can easily lose a guest at this point because it’s just too difficult.

Don’t ask them to wire money. This is the playing field of scammers and will raise enough red flags to cause them to move onto another, less risky option.

There are a multitude of payment processing options from online transactions into your own account to using the listing sites instant booking systems, to good old PayPal.

Research them all and find the one that is best for you.

 

Now, you are good to go and the fun stuff begins….

 


 

Step 5 – Creating Guest Satisfaction

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Getting great reviews is an obvious goal but it is much more than an origami towel arrangement and a bowl of fruit on the counter top.

Creating happiness in your guests is a tall order and it requires attention to detail from beginning to end of the process and includes:

Everybody shares what they are doing and there are bragging rights to every choice they make. This is no different for your guests

From the moment that booking is made they will be sharing where they are going and what they plan on doing. Your listing and website are what they will show their friends.

Their level of satisfaction in that choice can be determined by the reaction from those friends.

Think about that for a moment.

So, let’s look at what you need to do to make sure your guests are happy with their decision from the moment they book, to the time they write their review

Each step of the way there are times they might have doubts as to the choice they made but if you do it right, you’ll actively reduce those misgivings with:

  • The quality of the photos and text that accurately portray the property.
  • Your positive engagement with guests in all types of communication
  • An easy booking and payment process
  • Comprehensive and entertaining information delivered regularly and consistently
  • Setting and then meeting guest expectations
  • Anticipating their needs – being proactive and not reactive
  • Going the extra mile at every stage

 

Your task is to WOW your guests along the way and these are just a few of the myriad opportunities you have to do this:

  • each time you communicate,
  • the way you describe your place on a listing,
  • the photos you use,
  • the welcome your guests feel when they arrive,
  • the comfort of the bed and quality of the furnishings,
  • the help you give in planning their vacation,
  • the speed you respond to enquires, questions and problems

 

Notice the word ‘you’.

This points to the responsibility of renting out your home and becoming a provider to the tourism market.

Tae that responsibility seriously and your business will succeed, and we are here to help you make that happen.

 


Step 6 – Growing Your Business

vacation-rental-road-map-step6