Biggest Mistakes/Lessons Learned: Short-Term Rentals

123 Replies

Originally posted by @Robert M. :

We learned a ton from other hosts and investors before we launched, and now that we are well down the short-term rental road, there is no doubt that certain bits of advice were more valuable than others. We’ve certainly made minor mistakes, but I’m grateful to say that we benefited greatly from the wisdom of those who went before us.  So, while some of this may not fit the “lessons learned by messing up” box, what I CAN do is pay it forward by summarizing the most helpful advice and lessons “confirmed” that have led to our success.  

So, for what it’s worth…

1) Location, location, location.  What is nearby that attracts visitors?  Is it seasonal or year-round?  Does it attract families or parties?

2) Do your own research.  Airdna and Mashvisor are great, but they’re not perfect.  Better to watch similar properties for a while on Airbnb and VRBO, AND ask a realtor about returns, AND do the research on sites like Airdna and Mashvisor.  The combination of data will yield the best analysis.

3) Gather as much data as possible for an informed buying decision, but make the leap—thorough analysis, but not analysis paralysis.

4) When setting up a property, consider things that will get people to book AND little surprises that will make them happy once they’re there.  Touches like good linens, a plush mattress topper, labels and instructions for where to find or how to use things, or great coffee go a long way towards a 5-star review.


5) Speaking of reviews, educate guests on the review system.  Our check-in email tells guests that many platforms consider anything less than a 5-star review to be an unsatisfied guest.  As such, we tell them appreciate the opportunity to correct a situation during the stay rather than finding out about it afterwards.  Nearly all guests give us that opportunity if there’s a problem that surfaces during their stay, and our average rating on Airbnb is 4.97.


6) Stay at your property before it goes active and periodically once it’s up and running.  You may not realize the can opener broke or that the lamp light bulb is blown unless you spend some time there.

7) Don’t get too emotionally attached to the property.  If you do, you may over-invest in things that don’t add value (wasting money on things that don’t give you a return is never a good idea), overreact to damages or things getting ruined (budget for those things to happen, buy duplicates, and then don’t give damages and ruined items another thought!), worry all the time, or be too protective of who you allow to stay (though screening is good, a fully occupied and highly profitable property may be worth very small risks—for each person to determine based upon risk tolerance, but we have very few bad guests). 

8) Stating the obvious, but find ways to increase revenue.  Definitely use an external pricing tool like Pricelabs, consider allowing pets with a fee (an extra $5-8k per year just might make the cost of that new rug more palatable—and it’s unlikely you’ll need one since most pet owners take care of the place), and consider one-night stays if the guests are properly screened.

9) Others will disagree and perhaps location has a part to play in areas that are and are not desirable for partying, but to elaborate on the last item above: one-night stays (between other guests) add about $10k NET to my annual bottom line.  Don’t do single nights for locals, but DO consider them for the family of 4 that’s coming to town for a quick getaway or event.

10) Differentiate your property from the rest.  It may be through nicer furnishings, adding a hot tub or pool table, or accepting pets.  All of the above items can help create a niche, which particularly helps you stay booked during the off season.

11) Go for durability in choosing furniture and linens, and replace/service things sooner/more often than you would in your own home.  A broken appliance could cost you more in frustrated guests, rental concessions, and property downtime than replacing it a bit more frequently.

12) Automate everything—bookings, confirmations, check-in emails with door codes, check-out reminders, etc.  Everything!  If you’re spending more than 20-30 minutes a WEEK managing a single STVR, then something in the process needs to be changed.  Pricelabs, Hospitable, and a channel manager like Ownerrez or Lodgify are essentials.

13) Fear of a bad review can cause you to expect too little from your guests and to take on too much stress when something goes wrong.  Provide a great (even if sometimes imperfect) experience, and most guests will leave a great review. 


14) By the same token, don’t be difficult with your guests!  We’re in the hospitality/service industry. If you don’t like that, then don’t buy a STVR!  I’m often stunned at how hosts respond to problems/issues posted by another host seeking advice on social media (thankfully, Bigger Pockets hosts seem to have more class!).  You’re going to have an occasional needy guest, difficult request, or unexpected cancellation that falls outside of your policies.  Do your best to be flexible and serve your guests well.

15) Find an outstanding property cleaner/care-taker and treat him/her well!  This person is the key to your success, having few headaches, attracting repeat visitors, and ensuring that guests have an overall great experience.  Your cleaners may not put things in the same places you would, and there may be an occasional miss.  Let these things go!  If they’re committed, dependable, keep things clean and stocked well, and willing to do everything you need, then it is golden!

16) Be good neighbors.  Many HOAs and local governments no longer allow STVRs.  Buy somewhere that has already fought those battles (i.e. where you already know the rules of the game—not where the rules are yet to be created) and then meet the people around your property.  Give them your contact information in case neighbors have problems with your guests, and assure them that you’re there to serve them as well as your guests.

This was truly an awesome response thank you for the detailed insight. I am sure anybody armed with this knowledge will mitigate any risks.

Originally posted by @Natalie Kolodij :

Don't put in a wax melt/warmer- grown adults will still dump wax all over. 

Don't put in hotel individual bars of soap- they just get wet and stuck to the tub shelf/sink and make more cleaning. 

And don't do a welcome basket- no one cares. Literally no one mentioned it in 100+ reviews. 

I have to disagree about the welcome basket.  Probably 1/5 guests mention in my reviews and RAVE about it.  Of course, I do stock it with specialty items like Nori, KIND bars, popcorn, oatmeal packets, and biscotti.  I also buy $5 wine bottles at Costco and have the housekeepers leave them out (and they rave about this too, however, I would say only about 25% of guests drink it, so one bottle goes a long way ;).  

Other tips/learned lessons in my first full year of Airbnb with two mountain homes: 

—Do message guests right away, either personally, or automated shorts with their name in it.  People love good communication and so do I.  This also helps you to understand whether you might have a problem guest— those that don’t respond tend to be the ones that give you issues later (‘Hi, I’m here at the house and I don’t know how to get in’ oof…).  This also lets you know why they are visiting and those that have an honest story aren’t the party-ers 

—Find a good housekeeper or two and PAY THEM WELL.  A bad or no-show housekeeper is the fastest way to bad reviews that last forever.  I did not think about this before buying in a small mountain town, and it has been a real struggle.  They are your eyes and ears and if you can train and pay them to be more of a ‘concierge service,’ helping you to keep note of stock supplies, arranging handymen if they note something is broke, or running to the store for you, they will save your butt. And locals know other locals, so if you have a good relationship with them, they really help when it comes to finding an emergency handyman (sometimes it’s their husbands when no one else is available).  Most housekeepers here in very far NorCal make $30-35/hour, so find out what your going rate is locally before you decide on the cleaning fees.

—Figure out who will take out your trash and shovel snow.  In small towns this is another bother that we did not think about before purchasing, and when you are a 45 min drive from your houses, it can be a chore and almost impossible if you work a 9-5 and get a sudden dumping of snow in your airbnb driveway!

—Battery-operated candles. Guests love them and I usually have the housekeeper turn on a few before they arrive and people RAVE about them, put this in their reviews. I put in my house manual to please turn off when not in use, and most guests comply.

—Finally, a well-stocked kitchen is a must.  Not everyone is a chef, including you if you are not into cooking, but that doesn’t mean your guests aren’t either.  A good amount of guests book houses to cook instead of going out and they always seem to mention in reviews how well stocked our kitchens are with tons of fresh spices, oils, pots/pans, French coffee press, coffee grinder, all the cooking pans/pots/tools, etc.  

Good luck to all!


Originally posted by @Imeh Esen :
Originally posted by @Natalie Kolodij:

Don't put in a wax melt/warmer- grown adults will still dump wax all over. 

Don't put in hotel individual bars of soap- they just get wet and stuck to the tub shelf/sink and make more cleaning. 

And don't do a welcome basket- no one cares. Literally no one mentioned it in 100+ reviews. 

So what kind of soap should one use?

I go to TJ Maxx and buy a bunch of their large body wash jugs and guests love them.  They last forever.   

Originally posted by @Scott Mac :
Originally posted by @Himmler Joachim:

I just started subletting my second room in NYC a month ago. I was also able to find a short term lease contract last minute online. Better than nothing. 

 Do you think when prospective renters learn your name--in New York--it cuts down on those who would rent from you (A serious question)...(???)

LMAO 😂😂😂. I can understand the concern! I have to say out of all the prospective renters I've met and roommates I've had in my life, I've never met a Jewish one 😂. I'll keep you updated! 

The short rentals are good, but cleaning number one thing spot check all cleaners as its key. Also set up back plans we have all mobile combo locks controls, but lock boxes too, in case batteries die. Every few months we change re decorate and change out towles add one two extra items could be new pillows and cops. Let friends stay there ro criticize and make sure nothing's filth. I don't  need to hear back just my tips. 

. Bottom line some people in there mind want more not less, people older want to believe there in a ritz carlton. Crazy but service wins and problem happen u better have a plumber or more than a handyman to work on problems. U are competing against 1000 plus host not some ****** hotel, people expect more......They save more money and have high expectations.

Originally posted by @Imeh Esen :
Originally posted by @Natalie Kolodij:

Don't put in a wax melt/warmer- grown adults will still dump wax all over. 

Don't put in hotel individual bars of soap- they just get wet and stuck to the tub shelf/sink and make more cleaning. 

And don't do a welcome basket- no one cares. Literally no one mentioned it in 100+ reviews. 

So what kind of soap should one use?

I provide shampoo, conditioner, body wash vs. the individual bars now. 

Less clean up time

Originally posted by @Robert M. :

We learned a ton from other hosts and investors before we launched, and now that we are well down the short-term rental road, there is no doubt that certain bits of advice were more valuable than others. We’ve certainly made minor mistakes, but I’m grateful to say that we benefited greatly from the wisdom of those who went before us.  So, while some of this may not fit the “lessons learned by messing up” box, what I CAN do is pay it forward by summarizing the most helpful advice and lessons “confirmed” that have led to our success.  

So, for what it’s worth…

1) Location, location, location.  What is nearby that attracts visitors?  Is it seasonal or year-round?  Does it attract families or parties?

2) Do your own research.  Airdna and Mashvisor are great, but they’re not perfect.  Better to watch similar properties for a while on Airbnb and VRBO, AND ask a realtor about returns, AND do the research on sites like Airdna and Mashvisor.  The combination of data will yield the best analysis.

3) Gather as much data as possible for an informed buying decision, but make the leap—thorough analysis, but not analysis paralysis.

4) When setting up a property, consider things that will get people to book AND little surprises that will make them happy once they’re there.  Touches like good linens, a plush mattress topper, labels and instructions for where to find or how to use things, or great coffee go a long way towards a 5-star review.


5) Speaking of reviews, educate guests on the review system.  Our check-in email tells guests that many platforms consider anything less than a 5-star review to be an unsatisfied guest.  As such, we tell them appreciate the opportunity to correct a situation during the stay rather than finding out about it afterwards.  Nearly all guests give us that opportunity if there’s a problem that surfaces during their stay, and our average rating on Airbnb is 4.97.


6) Stay at your property before it goes active and periodically once it’s up and running.  You may not realize the can opener broke or that the lamp light bulb is blown unless you spend some time there.

7) Don’t get too emotionally attached to the property.  If you do, you may over-invest in things that don’t add value (wasting money on things that don’t give you a return is never a good idea), overreact to damages or things getting ruined (budget for those things to happen, buy duplicates, and then don’t give damages and ruined items another thought!), worry all the time, or be too protective of who you allow to stay (though screening is good, a fully occupied and highly profitable property may be worth very small risks—for each person to determine based upon risk tolerance, but we have very few bad guests). 

8) Stating the obvious, but find ways to increase revenue.  Definitely use an external pricing tool like Pricelabs, consider allowing pets with a fee (an extra $5-8k per year just might make the cost of that new rug more palatable—and it’s unlikely you’ll need one since most pet owners take care of the place), and consider one-night stays if the guests are properly screened.

9) Others will disagree and perhaps location has a part to play in areas that are and are not desirable for partying, but to elaborate on the last item above: one-night stays (between other guests) add about $10k NET to my annual bottom line.  Don’t do single nights for locals, but DO consider them for the family of 4 that’s coming to town for a quick getaway or event.

10) Differentiate your property from the rest.  It may be through nicer furnishings, adding a hot tub or pool table, or accepting pets.  All of the above items can help create a niche, which particularly helps you stay booked during the off season.

11) Go for durability in choosing furniture and linens, and replace/service things sooner/more often than you would in your own home.  A broken appliance could cost you more in frustrated guests, rental concessions, and property downtime than replacing it a bit more frequently.

12) Automate everything—bookings, confirmations, check-in emails with door codes, check-out reminders, etc.  Everything!  If you’re spending more than 20-30 minutes a WEEK managing a single STVR, then something in the process needs to be changed.  Pricelabs, Hospitable, and a channel manager like Ownerrez or Lodgify are essentials.

13) Fear of a bad review can cause you to expect too little from your guests and to take on too much stress when something goes wrong.  Provide a great (even if sometimes imperfect) experience, and most guests will leave a great review. 


14) By the same token, don’t be difficult with your guests!  We’re in the hospitality/service industry. If you don’t like that, then don’t buy a STVR!  I’m often stunned at how hosts respond to problems/issues posted by another host seeking advice on social media (thankfully, Bigger Pockets hosts seem to have more class!).  You’re going to have an occasional needy guest, difficult request, or unexpected cancellation that falls outside of your policies.  Do your best to be flexible and serve your guests well.

15) Find an outstanding property cleaner/care-taker and treat him/her well!  This person is the key to your success, having few headaches, attracting repeat visitors, and ensuring that guests have an overall great experience.  Your cleaners may not put things in the same places you would, and there may be an occasional miss.  Let these things go!  If they’re committed, dependable, keep things clean and stocked well, and willing to do everything you need, then it is golden!

16) Be good neighbors.  Many HOAs and local governments no longer allow STVRs.  Buy somewhere that has already fought those battles (i.e. where you already know the rules of the game—not where the rules are yet to be created) and then meet the people around your property.  Give them your contact information in case neighbors have problems with your guests, and assure them that you’re there to serve them as well as your guests.

Thank you Robert. These tips are super valuable.

I have an answer about PESTS...

Lessons learned - I had a long term stay (several weeks) get canceled hours after check in because of an "ant infestation". Came home to find two dead ants in a cleaning wipe on the counter. Nothing else.

I only offered a partial refund as I felt I was being taken advantage of.

At some point this summer, crickets established their home in my unfinished basement and were singing ALL night - had to put traps and spray around the perimeter of the house to prevent intrusion. 

Now I always put baits in hidden places in my home to prevent all of this - the house is from 1910, folks, yes it's renovated but random small bugs are the small price to pay for a truly authentic history home in Annapolis!

Hosts can't allow small bugs like ants, fruit flies, and crickets to ruin their hard work :)

HI Marylin,

I had something similar happen turned these people were host and tend to have very poor write ups and I caught trying to shake me down!! I google phone number showed up as real estate and airbnb host....with very poor rate ups...

Haven't read through all the responses but one lesson learned on Short Term Rentals is "don't put all your eggs in one basket".  Although it depends on location one thing that I have found is that in vacation and tourist areas many of the locals and individuals in the hospitality sector absolutely HATE Airbnb and other short term rentals.  My partner and I bought our first short term rental over 5 years ago in North Conway, NH.  Earlier this year the town voted to eliminate all short term rentals and sent cease and desist letters to all the Airbnb's in town.  We always have a Plan B and were able to pivot to long term renters and significantly over market rent once the momentum started moving towards the ban.

Piece of advice, short term rentals in many areas will either become more and more regulated and/or completely banned in certain areas so make sure you have a backup plan should that happen.

That might true once a while, I read article in Austin texas judge ruled against the big powerful hotels and said unfair to owner of their homes should be able to do what they want within reason. Its destroying hotels, uber destroying cabs, goggles destroying newspapers> Bottom line freedom usually prevails and your home, buildings is yours, therefore laws side with owns more and more.  

FYI alcohol was illegal in some cities, gambling too, this nothing so bad and its the owners place should be aloud to do what feeds your family.  LOL this modern day prohibition much smaller hurdles.......  

@Shane Siederman listen I'm all for freedom but remember that whether you or I or anyone else have our definitions of freedom the government/municipalities have theirs and they will come after you if you don't abide by it.  Personally I agree with you we should be free to rent our properties however we see fit.  So if you decide your best course of action is to go toe to toe with a town or city over your "right" to rent your property how you see fit that's your prerogative.  If you own in a big city you probably have enough firepower from other large scale owners to have a chance but in smaller areas you may not.  Check out some of the regulations on short term rentals in Santa Monica, Sarasota County FL, Jersey City NJ, or Clearwater FL to name a few, each one has different regulations but they all make it tougher.  Do I agree with them? No. But to hang your hat on "freedom always wins out" probably doesn't work out in the favor of many of these short term owners.

Also, I see your from Charleston which is an amazing city where you can do about anything you want but you do realize that there are still cities and towns in this country where gambling and alcohol are illegal right? 

My friend I'm from NYC own properties in multiple states and agree with you. Charleston believe or not is a ***** to work inside of. Politicians are all criminals they work for special interest, mark my words one city's says no another says yes.... Mask no mask, abortion and anti abortion. I'm with my friends a lot them are lawyers, most them real estate or corporate and it will come down to many and states enforcing what we bother cosdier BS, will lose business to the other state or city. As Trump realize he couldn't control Cumo, Biden cannot control the red states. SC is killing NC it cities where mask mandates are over the top. Florida liberal city will suffer but the business people will move to area with flexibility. As NYC and California lost millionaires left and right. California lost Elon Musk, Apple executives, Larry Ellison or Oracle so many companies moved OUT 47 just inside of 36 months thats a FACT. This amazing NYC lost so many it's scary.   We most likely agree on a lot, bottom line I track money a lot follow companies and wealth moving around.

- example Starwood capital moved from CT to Florida 

-Greystar another monster  moved to South Carolina 

-Blue Rock 

-Jamie Dimon having trouble keep his best bankers inside NYC- most jumped ship and inside Florida

FYI Uhaul, ryder trucks and many reatla companies provide information who's moving

where...

   I don't disagree with you, just follow things slightly different try money, I'm dyslexic so if my english sloppy I apologize Kindly.....

Thanks for your insight!! 

there are now 70 billionaires in Florida, worth a combined $245 billion.Apr 6, 2021 Inside Forbes article saying why they moved to FLORIDA, A GOOD CHUNK LIKE THERE MONEY MORE THAN THERE PARTY. BOTTOM line they like lower taxes and other benefits in sunshine states article pointed safer taxes and ability to protect their wealth. Just facts the new world will be RED VS BLUE, blue states losing biggest money makers.... This isn't even big tech companies who ran to TEXAS..... too!!

@Shane Siederman oh I 100% agree with you. I personally moved back to FL from New Canaan CT a couple months ago. The point of my original post was more to give people some advice for potential road blocks that may occur with short term rentals. But you make a very good point about following the money… the more government imposed red tape, regulations, and taxes the less enticing it is for investors. And as much as it blows following the money will often times identify trends like large corporations with millions in lobbying dollars (like the hotel/hospitality industry) trying to stronger arm municipalities and politicians into imposing silly regulations on small time investors. Either way never hurts to have a backup plan. 

Biggest learned mistake is paying/researching for quality cleaners. We had started out doing the cleaning ourselves because we didn't mind and the little extra cash from doing the cleaning ourselves made it fun. But when we got to 3 units it wasn't really worth the constant working at the point. So we hired a cleaning company that said they would meet all of our needs and we went through the whole process of telling them what we wanted and how we wanted it done. They promised us the world but delivered very sad services. We ended up having to walk through to double check their work every time and almost got to the point we were doing half the work ourselves it seemed like. So we researched another company, interviewed them and walked them through the properties. Surprisingly the owner came and walked his entire crew through each one of the properties with us. The owner came to the properties almost every time the first few weeks they started to make sure they were doing everything like we asked! It was incredible! We eventually grew a personal relationship with them and we absolutely love their services and are talking with the owners on how they can get their first short term rental. My advice is spend the extra dollar, do the extra research, because in the end you're going to anyway. 

Originally posted by @Joseph Bafia :

Don't underprice your STR. Lowballing to land deals can often attract those who will not take care of your place. If you provide a clean and nice place, you can command a higher price that's deserved and attract guests who will treat it properly.

Came here to say the same thing! I started using an Airbnb pricing tool (pricelabs) and it has helped me from day 1. Totally worth the $20 monthly fee. I realized I've been pricing my property too low - which in turn means lost revenue. On top of this, pricing your STR too low also cost you in tenant quality. Since I've raised my prices, I've had really great guests who can take care of the property, and always keep it clean, and are super considerate. I'd deeeefinitely recommend to anyone who's doing this on their own.