Hardest Lessons Learned from Short Term Rentals
Property Manager · Wisconsin and Florida · Member since 2017 · 346 posts · 227 votes
What have been your hardest lessons learned in short term rentals? I'd be curious to hear the experiences that others have had. I'd say my hardest lesson learned is overestimating how quickly a new property will reach my revenue goals. I haven't allowed for much of a ramp up period and as a result, haven't budgeted the funds to cover the expenses in the beginning. I'm getting much smarter now though. How about you?
I learned Julie's lesson about WiFi passwords quickly. Stick with defaults.
HVAC systems are a pain in the ***. If it's old, replace it the day you close.
I thought people would like my fancy touch-screen Ecobee thermostats but they have trouble with them and they're not as easy as Nest. I'll buy Nest next time. But I do like the WiFi remote-control aspect. I also have remote-control door locks, cameras, and motion sensors. I love them all.
Linens are expensive, and you need three sets
Guests are hard on linens, you'll be replacing them on a regular basis
Guests will call the "Emergency Number" a.k.a. my cell phone, for stupid stuff like "how do I use the spa?". I learned to use Do Not Disturb on my phone very quickly.
Your cleaners are your best friends. Get a good one and treat them well.
It's not "passive income" like they say. It's a hospitality business and it's a lot of work in the beginning -- like several hours every day after work for months, then it settles down then takes maybe 3-4 hours a week. But if done right, the returns are WAY more than most people make on LTR's.
The learning curve for AirBnB and VRBO and the different customers who use those sites. We initially set up our VRBO accounts to Instant Book which didn't give us the opportunity to properly vet renters. Also we found that AirBNB customers seem to always try and negotiate terms and then those are the renters who cause the most issues. Also not staying up on local regulations of STR market.
Currently my hardest lesson is not to get cute with wifi names and passwords. :p Routers in two of my properties have begun resetting to defaults, which disconnects my wifi locks, thermostats, smart TVs, etc. I need to get the routers replaced (a bit difficult from my spot 2000 miles away) but when I do, I'm going to stick with the default settings, so I don't have to worry about those systems losing internet connection just because of a router reset.
I can't really think of any hard knocks lessons, but it is a learning curve compared to long term rentals.
I learned Julie's lesson about WiFi passwords quickly. Stick with defaults.
HVAC systems are a pain in the ***. If it's old, replace it the day you close.
I thought people would like my fancy touch-screen Ecobee thermostats but they have trouble with them and they're not as easy as Nest. I'll buy Nest next time. But I do like the WiFi remote-control aspect. I also have remote-control door locks, cameras, and motion sensors. I love them all.
Linens are expensive, and you need three sets
Guests are hard on linens, you'll be replacing them on a regular basis
Guests will call the "Emergency Number" a.k.a. my cell phone, for stupid stuff like "how do I use the spa?". I learned to use Do Not Disturb on my phone very quickly.
Your cleaners are your best friends. Get a good one and treat them well.
It's not "passive income" like they say. It's a hospitality business and it's a lot of work in the beginning -- like several hours every day after work for months, then it settles down then takes maybe 3-4 hours a week. But if done right, the returns are WAY more than most people make on LTR's.
Just got started a few months ago with 2 STR units. Lessons learned in that process...
1) Expect to get 3 star location ratings when guests specifically comments in their review that you have a "Great location, close to downtown!"
2) Linens, lots of linens and visits to Target
3) Random things disappear...ironing board, really??
4) Cleaning must be outsourced if you want to maintain your sanity
1.) Constantly be improving your listings, and your systems. Every time a guest has an issue, do something to improve it so that future guests don’t have that issue. Put yourself in the guests shoes.
2.) find good cleaning people, stick with them, and constantly be training and improving them and their work environment. Work with them to make their job easier (like buy extra linens, better laundry infrastructure, ect.).
3.) If issues with guests or the house come up, deal with it right away. Don’t let it fester. The longer you wait to deal with it, the more time and money it will take to fix.
I like what @Tim Schroeder said, it is not a passive business. You should constantly be improving, or your business will suffer.
Great topic @Wendy Schultz! I intentionally waited so I could read some of the other inputs because it has been a 4-year fire-hose that appears to not have an off-valve. @Julie McCoy I absolutely love my Google WIFI as long as it plays with your other toys. It doesn't reset (knock on wood) and gives me remote access as I too live far away. Just make sure what you have is compatible. It's a bit more expensive (though I'm seeing HUGE deals for Black Friday coming up). As @Tim Schroeder mentioned HVAC but also appliances can be a challenge - hence I when I buy a property if anything is within a few years of failing, it gets ripped out and replaced. Carpet - TEAR IT OUT! You'll spend 10X in keeping it clean than replacing it as guests drag their dirty suitcases all over it. In summary, the upfront furnishing/fixing/getting it ready/constantly updating/managing for 5-star reviews is the biggest lesson and requires CASH AND TIME. Fortunately the cash replenishes quickly but the time never seems to.
That's our philosophy. We use a smart lock too. It locks itself after only 20 seconds though but we'd prefer it to be longer. If the wifi goes down, the codes that are already stored in the lock still work.
My best suggestion is to look at Airbnb comps to see if there is demand in the area your son's house is in. I only do STR for the entire space rather than a room in a home but there is a market for everything. I find that hotel people book hotels and vacation rental people book vacation rentals. They are entirely different experiences and my guests are not comparing us to hotels for pricing. Also, be sure to check the regulations in your state/municipality regarding short term/transient lodging. There are a lot of states addressing this with legislation.
1. Walking the fine line between being receptive to a guests needs and becoming a personal concierge.
2. Leaning that some guests feel entitled to taking random items such as rolls of paper towels, toilet paper, cleaning supplies upon departure with the notion that the unused items are complimentary since they paid for their stay.
Yes! Those are good ones for the list!
Currently my hardest lesson is not to get cute with wifi names and passwords. :p Routers in two of my properties have begun resetting to defaults, which disconnects my wifi locks, thermostats, smart TVs, etc. I need to get the routers replaced (a bit difficult from my spot 2000 miles away) but when I do, I'm going to stick with the default settings, so I don't have to worry about those systems losing internet connection just because of a router reset.
I've not experienced this issue yet. Thank you for saving me future pain!
The learning curve for AirBnB and VRBO and the different customers who use those sites. We initially set up our VRBO accounts to Instant Book which didn't give us the opportunity to properly vet renters. Also we found that AirBNB customers seem to always try and negotiate terms and then those are the renters who cause the most issues. Also not staying up on local regulations of STR market.
What process are you using for vetting renters? How often are you turning away potential renters through that process?
I learned Julie's lesson about WiFi passwords quickly. Stick with defaults.
HVAC systems are a pain in the ***. If it's old, replace it the day you close.
I thought people would like my fancy touch-screen Ecobee thermostats but they have trouble with them and they're not as easy as Nest. I'll buy Nest next time. But I do like the WiFi remote-control aspect. I also have remote-control door locks, cameras, and motion sensors. I love them all.
Linens are expensive, and you need three sets
Guests are hard on linens, you'll be replacing them on a regular basis
Guests will call the "Emergency Number" a.k.a. my cell phone, for stupid stuff like "how do I use the spa?". I learned to use Do Not Disturb on my phone very quickly.
Your cleaners are your best friends. Get a good one and treat them well.
It's not "passive income" like they say. It's a hospitality business and it's a lot of work in the beginning -- like several hours every day after work for months, then it settles down then takes maybe 3-4 hours a week. But if done right, the returns are WAY more than most people make on LTR's.
Lots of truth to this!
Instructions must be written for everything. We have (very nice) cabins in the mountains. We get lots of city folk who do not know how to manage (or respect) the heat, fireplaces, firepits, cell phones not working, departure times, etc.
For the most part it's been a GREAT experience, and profitable. We have had a guest burn down a sauna and shed, forget to leave on the day of departure (twice, both resulting in forest ranger searches, ugh). They move furniture around and the housekeeper can't move it back by herself. So we have a really lenghty arrival instruction sheet.
My wife and I are in the process of buying a home to use as a STR. The person we are buying from currently does it.
Things I've noted:
His cleaning person is the next door neighbor.
The house was spotless when we came by.
He had an instruction booklet which detailed things (outdoor shower, foot wash station, etc). Comments from his VRBO page included 3 things: Mattress protector was noisy, no exit instructions and limited kitchen items. We plan on addressing those. Even with those items, he still got a 4.9/5 rating with over 30 reviews.
I plan on having utility towels (its at the beach.. there are motorcycle and jeep weekends). But I hadn't thought of makeup removal towels. Good tip there.
I will be adding a nest, and it will be linked with an alexa (for multiple reasons, including security features).
I want to add a remote lock with keypad, so we can change the code when they leave.
The previous/current owner would not rent to non-families. So he wouldn't rent for jeep and motorcycle weekends. I plan to, but also plan to increase the deposit.
I am also getting a home warranty for the property to cover all the major equipment. They also offer service plans, so things like AC maintenance can be performed as part of the contract.
My goal is to generate income, spend some time down there and hopefully give my guests a wonderful experience and reason to return to my property.
I learned VERY quickly to put an age limit on it and explicitly state in the ad that we don't allow parties.
2 bookings within a month where those little highschoolers threw a party. The last one i beat down the door at 8am, made all of them clean the place up and then made them pay another cleaning fee. since those changes its been pretty smooth. I keep it booked all but 3-5 days a month.
@Wendy Schultz Pricing properties too cheap. Price what you are willing to take. More bookings does not mean more business, it just means more CAPEX. We are higher than everybody else so don't get booked out as far in advance but make more than others with half as many bookings. Also AirBNB does not protect owners at all. Their protection policy is garbage and takes 60 days minimum to resolve.
what evaluation programs are you guys using to determine the best mix of price and utilization? All i did was look at stuff around the neighborhood and got pretty lucky.