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All Forum Posts by: Collin Hays

Collin Hays has started 120 posts and replied 2529 times.

Post: What is VRBO’s take?

Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,565
  • Votes 3,594
Originally posted by @Nathan Gesner:
Originally posted by @Collin Hays:

So let’s assume you have a rental that grosses 40K a year.

Here are your VRBO expenses:

- either $599 per year flat fee or 5% rental commissions.
- 3% credit card fee

-3% advance pay fee

- Average of 8% “service fee” charged to your guests that effectively lowers your rent (you have to adjust your rent after the add on fees to keep it market competitive), and VRBO doesn’t share a dime with you.

So your fees to VRBO range from $6000 a year to $7600 per year on a $40K rental.

15 to 19 percent total. 

If you didn't use VRBO or AirBnB, you would have to build your own website that 99% of the public would never be able to find because it would be ranked on page 17 of a Google search. You're paying for a platform that gets your product out to the public, provides tools that allow for simple reservations, payment processing, and communication, and much more.

By the way, what about state/local taxes? Cost of furnishing the unit? Utilities? Landscaping? TV and internet? And on top of that, you still have to calculate how much time you spend on it and what that time is worth.

I actually think you're getting an even lower return than you think, but you're also underestimating the value provided by VRBO and other platforms.

As i said, VRBO and Airbnb are the Amazons.  Of course you have to use them.  They have a monopoly and are squeezing the homeowners accordingly. 

Post: What is VRBO’s take?

Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,565
  • Votes 3,594
Originally posted by @Michael Heisterkamp:

You are paying for advertising.  If you don't like their costs then don't list on the platforms.  If you think you can keep your occupancy up on your own then do that.  You are just complaining about this, nothing else.  Advertings costs money, websites cost money, emoployees cost money, developers cost money, etc. etc.  If you think they are doing nothing your understanding of business is wildly inadaquate. 

A 3% charge for advance pay is advertising?  A service fee of 8% per booking is advertising?   

No one said they are “doing nothing”.  My point is, they are grabbing more of the pie, one year at a time.

Yes, I’m complaining!

Post: What is VRBO’s take?

Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,565
  • Votes 3,594
Originally posted by @Reagen Natho:
Originally posted by @Collin Hays:

I am not as familiar with the various fees of Airbnb.  It could be that they represent a better value currently than VRBO.

The cash grab by VRBO over the last 4 years has been stunning.

Greed eventually kills.

 I'm happy Vrbo only accounts for 2% of my bookings for my cabin in Sevier Co.

wow!  Are the getting the rest via Airbnb?   that’s fantastic.

Post: What is VRBO’s take?

Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,565
  • Votes 3,594

I am not as familiar with the various fees of Airbnb.  It could be that they represent a better value currently than VRBO.

The cash grab by VRBO over the last 4 years has been stunning.

Greed eventually kills.

Post: What is VRBO’s take?

Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,565
  • Votes 3,594

Right now, self managers really have no choice.  VRBO and Airbnb are the Amazons in this industry.  And they are taking full advantage.  I think it’s a shame really.

We need more competition in the space.  Homeaway/VRBO deftly acquired all legit competitors and essentially foreclosed the self management side of things.

If you are going to pay someone up to 19% and self manage, why screw with self managing?  

Post: What is VRBO’s take?

Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,565
  • Votes 3,594

So let’s assume you have a rental that grosses 40K a year.

Here are your VRBO expenses:

- either $599 per year flat fee or 5% rental commissions.
- 3% credit card fee

-3% advance pay fee

- Average of 8% “service fee” charged to your guests that effectively lowers your rent (you have to adjust your rent after the add on fees to keep it market competitive), and VRBO doesn’t share a dime with you.

So your fees to VRBO range from $6000 a year to $7600 per year on a $40K rental.

15 to 19 percent total. 

Post: On VRBO, have you chosen damage protection or deposit? Why?

Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,565
  • Votes 3,594

Extra fees and deposits chase off bookings and lower your yields substantially. Damages are rare. I've owned one STR since 2005 that is occupied 240 nights a year and have incurred $1000 damage tops in 14 years.

If you need an extra 300 bucks deposit to help you sleep at night, it could be costing you 20-30-40 times that in lost rents each year.  That adds up to a LOT of lost income over a few years over an occasional broken stool or lamp.  

Penny wise, pound foolish.

Post: STR Cabins in Sevier Co

Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,565
  • Votes 3,594
Originally posted by @Nidal Daraiseh:

Do people generally go by looking for approximately 18 - 20 percent gross per 100k in STR in the area?

I would say 15%.  You could easily achieve 20% and more with prices two years ago, but huge interest in the Gburg area has driven up prices and forced the yields down.   

But it is still the best area in the country IMO. 

Post: STR in Smoky Mountains amenities

Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,565
  • Votes 3,594

I stick by my assertion that a pool table is a big deal.  We have seen rents rise considerably before and after.  An occasional rip in the felt is worth several $ thousand a year in new revenue, although I don’t recall any such repairs in the last 10 years.

People do play on their devices, but like some element of novelty - that is why they are renting a cabin to begin with.


We had a client in the Blackbear Falls area with no game table.  We recommended a small table multicade that cost $1200.  The annual rents went up from $5-7K depending on the year, and that was 4 years ago.

So another $20-25K in rents for a $1200 purchase.  That is real money.

Post: Management Company Money Flow

Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,565
  • Votes 3,594

Many states have specific laws for property management companies.  Many, you have to be licensed to operate in.

In the state TN where my company is, you have to have three banks accounts:

1.  Escrow account.  All payments from guests flow into this and may not be disbursed until the guest has departed.

2.  Operations account.  This account pays for all property related expenses - repairs, pest control, etc.  All of these expenses are homeowner expenses.

3.  Management account.  All expenses that are administrative.  Advertising, housekeeping, wages, etc.


When payments to homeowners are disbursed each month, they are net of  expenses that the management company incurred on their behalf during the previous month.