The rental property industry has made tremendous changes after the adverse effects of the global health crisis in the last two years. Indeed that was an unprecedented and tough period marked by extensive lockdowns, travel restrictions, and bans. With the easing of travel restrictions and the remote model of working gaining traction, the short-term rental industry has picked up momentum.
The demand for furnished short-term rental property continues to grow, thanks to vacationers, digital nomads, remote workers, etc. As a result, apartment owners are diversifying their rental property investment to meet the demand in the short-term rental market. At the same time, investors want a share of the passive real estate income.
It is a fact that managing short-term rentals can be challenging. Many investors wonder whether short-term rental management is the right choice of investment for them. Continue reading for insights into short-term rental properties and how you can streamline the process of managing them.
Short-term Rental Management Explained
We get to discover from the techvestor.com investment experts that you can invest in short-term rentals for as low as $25,000. These short-term rentals comprise furnished properties that are used by people on business trips or for vacation use.
Usually, their stay ranges from a single night to several weeks but not more than 30 consecutive at a time.
The supervision and administration of these short-term rental properties are referred to as short-term rental management. It’s an operation that ensures the business runs smoothly, streamlines the guest experience, and increases ROI.
Short-term rental management activities include:
- Maintenance and repairs
- Scheduling cleaning
- Managing property bookings and listings
- Handling check-ins and checkouts
- Communicating with guests
- Managing guest reviews
- Marketing, etc.
Many people want to invest in short-term rentals but don’t have the time or expertise to do so. Add to this the list of activities that you must undertake before and after investing in this option. Sourcing out the right location, understanding the market, quoting the right price, getting clientele, and maintaining the property top-notch. The list seems exhausting.
In such a situation when you lack the time and resources to fulfill all that it entails, it would be prudent to seek the help of professionals who would manage the property for you. All you need to do is invest, and they take care of the rest.
Top 4 Tips for Effective Short-Term Rental Management
1. Offer Seamless Service
Top-rated vacation rentals are the ones with great reviews and a high occupancy rate. Short-term rental properties thrive on reviews. The more positive reviews, the higher the occupancy rate and returns on investment. On the other hand, bad reviews increase vacancy rates because admittedly everyone wants their money’s worth.
A few touches and investing in modern amenities can improve the appearance and services of your property. You can get recommendations from top-rated restaurants and local events about what they’re doing to give their guests a great time.
2. Take Advantage of Tax Laws
Most rental property investments have beneficial tax regulations. Investors who are not familiar with them lose thousands of dollars every year. For instance, property owners who rent part or whole of their apartment or home for 14 days or less each year don’t pay tax on their rental income.
This is irrespective of the amount they generate. Your rental income is tax-free when you use your property for more than 10% of the days you rent it out at a fair price.
3. Account for Every Expense
There are bills to pay in short-term rental management, including listing platform fees, utilities, cleaning, and maintenance costs. You need to budget and account for these expenses to offer a seamless guest experience and maintain a positive cash flow property.
4. Set the Right Rental Price
The price of a vacation rental property is set based on the location, amenities, square footage, etc. Trial and error are one method people use when setting their rental price and then adjusting it depending on the season.
But doing comprehensive market research is an excellent way of determining the price of your short-term rentals. Indeed your price should be in the same range as comparable properties in your location.
How to Manage Your Vacation Rental Property
After finding the answers to how to buy a vacation rental property, beginners want to know how they can manage such properties. After all, when you charge rent comparable to others in the area, people who want to stay there will expect top-notch quality.
There are many styles of managing your short-term rental properties. Each of these methods has its advantages and disadvantages.
Do It Yourself (DIY) Approach
The DIY approach gives you more control over your rental properties. It also has lower property management fees.
However, this is a time-consuming approach. The city might require you to obtain a business license based on the location, but you also need a short-term rental strategy to achieve your business goals.
Additionally, you must list your property to get guests on the best sites, including Airbnb, Vrbo, TripAdvisor, and Google Vacation Rentals, or create your own vacation rental website. Lastly, you must leverage technology to streamline your daily operations.
Hire a Property Manager
As mentioned, the process of managing vacation rental properties can be tricky and time-consuming to do yourself. Hiring a professional property manager is a wise choice. They have the knowledge and skill to handle every aspect of managing short-term rental properties.
A property manager handles hosting routines such as:
- Communicating with guests
- Handling reservations and cancellations
- Processing booking payments
- Monitoring and restocking supplies
- Supervising check-ins and checkout
- Adjusting rental prices
- Maintenance and cleaning, among others
Hiring a property manager is an additional expense that you should factor in when setting rental prices. The property manager sets their fees based on the property type and location.
Outsource Services from Short-Term Rental Property Management Company
A short-term rental property management company has a team that handles short-term rental laws, hospitality, and other facets of the short-term rental business. You can outsource the entire or part of your rental property business, including marketing, bookings, maintenance, and cleaning.
Short-term rental investments have a higher ROI depending on where your property is located in the city, plus its occupancy rates. However, managing such properties can be a challenge because there are many tasks to complete each day.
Short-term rental management controls every aspect of these facilities, including guest communication, marketing, cleaning, and maintenance. You can hire a property manager or outsource services from a property management agency if you don’t have the time or skill to manage your short-term rental property.
Thankfully, our short-term rental management guide has offered appropriate tips to help manage your vacation rental business. Following them will help increase your passive income from the rental property.