Observations from someone successful in the nightly rental game
I have been around Bigger Pockets now for about a year and have been involved in the nightly rental business for 14 years. Here on Bigger Pockets I read posts from many people who are concerned about getting into the nightly rental game and would like to offer some help if I may to them.
A little background - first. I started out as an electronic engineer and then switched gears to get a degree in computer science. That led to our first software company VeeCal which then brought in sales leading us to a career switch and now to our current location in Branson Missouri.
We started out with a resort and then grew into condominiums. Our business has never been better and we continue to smash through one record after another. There are many avenues to arrive at the same destination, but ours required the least outlay in funds and I would like to offer some of the things we did to possibly help others here.
To begin with, customers are simple. If you can keep this in the forefront of your mind at all times, it will make your investment SO much easier. Treating them as you would like to be treated is not common sense - it is expected.
ALWAYS present your property accurately. I honestly think this is the absolute #1 mistake of other owners I have seen. Stay away from superlatives and overly glossy embellishment. Want to ruin someone's stay? Describe how your balcony overlooks the peaceful lake in the backyard of the horizon with gorgeous rays reflecting in the sunset. Only to reveal to your clients later on that that "lake" is actually your neighbors lagoon. ;) Skip the professional photographers and do it yourself. "Real" pictures convey your property a 1,000 times better than a heavily retouched photo ever will.
Hire the best and most reliable cleaning crew you can afford and hold them to it. We once stayed in a fantastic location at Anna Marie island only to have the whole experience destroyed by the discovery that there were dried and very dead cockroaches along the kickboard in front of the sink. Yes, they were dead and we didn't find anything live (thankfully) but sliding out the refrigerator only revealed 20 more dead ones and that did it for us - we were out of there. Beach front, $250 a night, and loss of revenue from incredibly sloppy housekeeping.
When you are looking at buying a rental property, really investigate the tourism trends. Here in Branson (as is common with anyplace else in America) there will be "desirable" locations, "okay" locations, and "only if there is nothing else" locations. You could go 10 miles outside of our location to areas like Reeds Spring, Rockaway Beach, and even Lampe and be astonished at the immediate drop in interest just due to the slightly further distance. Even for my own business, we sometimes are hurt by the fact that we are 6 miles from Branson, but, on the flip side we are only 200 yards from the marina and 2 miles from Silver Dollar City - so it is a great tradeoff. We lose the theater business but pick up the lake crowd and the amusement park crowd.
Advertising - this is a sticky one as many people are disciples of heavy advertising. I can honestly state that >75% of all our business is either repeat or referral. Advertising almost becomes unnecessary. If you do decide to advertise, the costs are unbelievably high but can be worth it if you are just getting started. Otherwise, you can probably wean yourself away from them if you have bought a property with established clientele who love your place.
Amenities - As much as possible, try to overwhelm your guests with them. Don't make them lug along the standard norms from home when it is something you could provide easily. Here's an example (real life) for you. My wife and I (over the years) had accumulated probably 500 DVDs of our own. Some new, some from pawn shops, some from eBay. The thing is, they were just occupying space for us. A couple of racks later we had them displayed in our office for our guests to use and they have been a huge hit for several years now. (Cannot believe how many people love to watch Smokey and the Bandit again) Rainy days guarantee that we will give out 20% of our inventory. The difference between a cheap towel and an expensive one is 7-10 dollars. Splurge for the better towel and your guests will remember it. Blenders are always cheap and very appreciated. Same for crock pots, glass bowls, plenty of plates and hangers in the closets. Simple things will go a long way.
I will be happy to discuss other things on this thread in the hopes to help you gain some help along the way in your rental investment.
Happy Thanksgiving, Mike