All Forum Posts by: Jim Hudelson

The short answer is No.  Regional variations play a big role in what companies charge (competition).  I've worked in the short term rental business for most of my life (and I'm pretty darned old).  What I have learned is that

all rental companies need to make a similar amount to stay afloat.  It is not an inexpensive business to operate.

The business can be broken down different ways but I think the 4 main areas where a property management company benefit you are housekeeping, property maintenance, marketing, and accounting.  You will find different companies providing different levels of service with these four areas.

So, it comes down to how much help you need or want.

Some companies are down right unscrupulous and are mostly looking to make money off of you (from you).  Most companies are fair and do their best to provide a quality service.  Look for a company that has been in business for a minimum of 5 years and has a mostly favorable reputation.  Good companies have good employees.  Having that kind of expertise on your side has value.  

The majority of people on this site are people who self manage.  There is nothing wrong with that, it is for sure how you can keep the most for yourself.  There is a learning curve to self managing so if you are new to the business, hiring a PM company is actually pretty smart.  

Your contract with the rental company is the alpha and the omega.  Talk to 3 or 4 companies and have them provide their owner contract.  After reading 4 of these you will start to see the subtleties for how they operate.  Go onto their website and work through booking a few properties.  See what fees they are tacking on.  This is how they can siphon off a chunk of revenue without sharing it with you.  If they charge a 15% commission and are providing all 4 services, or even 3, they are making money elsewhere or they won't stay in business.

I could go on and on but I won't.  Good luck with the journey.  If you have the right mindset it's a fun business to be in.  You have to be able to take some lumps along the way and not have it ruin your life.

Wait this out.  My thinking is that 2 months (June 1) is when a clearer view should be unfolding. Possibly convert to long term but probably not.  At some point the vacation rental market will return.  We can wait it out.  Surprisingly, our rental has been okay.  We received a last minute booking in early March and they are there for 3 weeks.  4 days after they depart we have a couple checking in for 6 weeks.  They are building a house in the area and need a place while awaiting completion.  We are counting our blessings.  Fortunately our location hasn't yet banned ST rentals so we aren't breaking any rules.

The current guests were in place before the virus picked up any real steam.  We are in regular contact with them and they seem to be following all of the Covid rules.  I'm probably most concerned about the housekeeper bringing something into the house when she cleans but she too is very aware of the problems.  Fingers crossed.

Adding to the above > Often times the renter is 'feeling you out' just like you are doing with them.  They want to feel comfortable with the person that they are dealing with. 

In our experience it is not at all unusual for potential guests to inquire and then we never hear back from them.  Put yourself in their shoes.  They are likely narrowing down their choices to 2 or 3 possibles, then sending inquiries.  Once they select they rarely go back to the others and say 'no go'.  Any inquiry that mentions price is certain to not materialize into a booking (we only discount based on length of stay and this is published on our page).  If they are asking about something that is explained in our listing we know they aren't going to materialize into a booking.  Very rare anyways.  So, it's all part of the process.  Always respond.  Respond with minimal enthusiasm if they seem suspicious or dis-ingenuous.  Study up on what the common scams are that people might employ against you and be on guard for these.  They are mostly obvious.  These you don't respond to.  It's a dance so put on your dancin shoes.

Not to be glib, but it sounds like Moab is going to have a window where it is 'like the good ole days'.  Estes Park (Larimer County) has now initiated a similar ban on short term rentals and motels.  The fact that government is acting fast and strong is a good thing in my opinion.  Hunker down folks until this blows over.

Air B-n-B is pretty good to work with.  They will make some money off of your business but they aren't trying to get a lot of it.  Homeaway (VRBO) is more aggressive about getting into your pockets (my opinion).  Both of them offer an invaluable service - a marketplace that the majority of renters look at when looking for a place to stay.  

If you haven't rented through AirBnB, you should do this.  There is no better teacher than experience.  It's good to see the process and get a feel for what the guest experience is.  

If you buy this house, see if there is a way that the reviews on AirBnB can be transferred over to your listing.  Reviews are very important.  This is assuming that the reviews are good.  You want to see consistent 5 star reviews.

There is quite a lot to learn.  You can find good information on this site.  Homeaway's Community web site is also a good resource.  

It's smart to learn about how some of the scammers in the world work when it comes to vacation rentals.  

Spend some time researching rental contracts.  Read what others include and why.  Having a solid rental contract with your guests is important.  Ours is not full of legal-eze.  It's purpose is to protect our interests and also to set some expectations for the guests.

Learn about Credit card charge backs.  If a guest ever initiates a charge back there are specific rules that you must follow to dispute their claim.  Hopefully you never have this happen to you.  We haven't in 8 years of renting.

It's a fun business to be in (most of the time).

The listing sites make it very difficult to impact reviews.  For the most part this is a good thing.  I 'get it' for why they lean towards doing nothing.  If we could pick and choose what reviews remained on our site they would be of very little use.

The advise being offered here is solid.  We, as owners and business operators, need to be realistic in our expectations.  If you call up AirBnB or Homeaway and say "it's broke and you need to fix it", you'll get nowhere.  You need to have documentation and proof and a solid reason for why you want them to do something.

If you are pretty new to this I'd recommend that you research credit card chargebacks.  This is another area where if you don't have your act together you will eventually get burned.  Also research fraudulent renters and the methods that they use.  There are a handful of techniques that get repeated.

Bad reviews are hurtful.  Most consumers know this.  Only turkey-feathered dips..ts leave 1 star reviews that are meant to do harm.  When I read through reviews for a product I will take a look at the one-stars and they usually are crap.  It's the 3 and 4 star reviews that I tend to focus on to find the negative side of a product.  That said, if 1 stars dominate I'm gone.   If you have mostly 5 star reviews and one 1 star review it won't impact potential customers much.  It can move you down in the rankings on VRBO or AirBnB.  That's the biggest problem.

For sure, leave a reply to the comment.  Keep it short and non-vindictive (judgemental?).  Take the high road.  Admit that there was a small amount of surface mold in one of the shower areas and that you have had it removed, and brought in professionals to look for other problems of which none were found.  Indicate that this guest was provided a full refund upon their request.  Be done right there.

There are for sure people out there looking to scam.  They will act differently than what you are describing.  They will want to stay for a week and not pay anything and they will threaten you with bad reviews if you don't do as they say.  We all hope that we don't get these people and have our personal methods for vetting renters when they initially inquire.  There is quite a lot of information on the internet about this if you do some research.  The Homeaway forums are a pretty good source.

That's my advice.

It's a changing landscape.  By owner Short Term Rentals wasn't even a common term/expression until the last 10 years or so.  They have existed for much longer than that but weren't prevalent enough to warrant attention from the local government.  For example, I lived in the Aspen Colorado area in the 80's.  VRBO wasn't in play yet.  People would find renters via local advertising to rent Christmas Week and make enough money to pay for a vacation to Hawaii and a month or two of mortgage payments.  Sweet deal.  

Property management companies have been in this business for a long time.  They were generally viewed by local governments as a positive.  They provide(d) a contact point for many rental homes, local jobs, brought in tourist dollars, etc.  They are part of the business community and have a voice.

In todays world, STR's By Owner have become a threat to local populations and as a result we are seeing all of the new and revised ordinances that restrict or ban the practice. In resort areas it is expected and allowed (usually). In urban areas it tends to be viewed as a negative.

Applied to your situation I would agree with what others have said. It is likely that by owner STR's are a blip on the radar of the city council. It is one of those things they know that they need to get to but haven't because it isn't the hot potato. When it becomes the hot potato, expect fairly quick and decisive action. How they respond will depend on who they are and what they believe (and who is pulling their strings). You can be proactive by getting involved locally. There are many positives to having STR's. It's important that this message is part of what the city council is hearing. There are also plenty of negatives and these will be voiced loud and clear.

I would expect that if you received a 'cease and desist order' from the town that you could successfully fight it off by lawyering up.  As you know, the cost for doing this would essentially bankrupt your business plan.  So, if you consult an attorney and they say that this could easily be fought, they of course will have dollar signs in their eyes.  They would love a battle like this.

If it's me, I'd go ahead and rent my place with the expectation that the local government could shut me down.  Find responsible renters.  We have been renting our house in a city in Colorado for years and it has gone very well.  We also lean towards one month minimums and have been pretty successful with this strategy.  

We have learned a few things about vetting potential renters.  One - if in their initial inquiry they don't say something good about our place, it's a red flag.  In other words, have they been researching and looked through our information and made a conscious decision that our place looks like a good fit?  Two - if in the initial inquiry they are focused on the cost it never ends good.  Our house is mid-priced for the market.  It isn't cheap and we don't want cheap renters.  Third - last minute renters are usually trouble.  Not always, but we are Leary of them.  Find out their story and make a read on the authenticity of it.  I define last minute as within 2-3 weeks of arrival.  People who plan ahead are generally more responsible and reasonable to deal with.

Good luck!

We have been using the Schlage keyless locks that don't have WiFi connectivity for years.  We pre-load combinations and provide them to guests, then remove the codes after their stays.  It's all manual and you have to be at the lock to make changes.  That's a negative but for us not a big problem.

When shopping these locks their are basically 2 kinds, those that operate the deadbolt automatically and those that don't.  The ones that turn the deadbolt automatically go through batteries faster.  I've run the non-auto type for 3+ years without changing the battery but on our rental homes I change them at least every 18 months or so.

I've recently had trouble with 2 different locks malfunctioning.  In both cases when I spin the knob to turn the deadbolt it doesn't engage.  Kind of like a clutch that doesn't work.  In both cases it started out happening just occasionally then got worse.  I replaced both of these locks.  This doesn't deter me from using them.  Both had been used for a few years and we are near the gulf of mexico.  The salt in the air is notorious for corroding Everything (sometimes I think even my brain but that's another story).

Overall, we like these locks.  We use them  on our personal homes as well.  I'm about to switch to a wi-fi enabled version of these on one of our homes.  My biggest fear is hack-a-bility, which I plan to do some research on.

A few things that I like about the Schlage:

1:  there is a command to erase all codes.  Then re-enter new ones

2:  there is a command that freezes out all programmed codes while we are staying there.  Call me paranoid, but I like this feature.

3:  The raised numeric keypads that are backlit.  We had one that didn't have this and I hated that lock.

4:  Being able to re-program the master code.  We set all of our locks to have the same master so I'm not having to carry around a list.  Obviously, nobody else gets to have this code but my wife and I.

One thing to be aware of with the Schlages is that they put a sticker on the covered up portion of the lock with the factory default master code.  If you don't re-program the master, anybody in-the-know (like me for example) can pull two screws and determine the master code.  At the very least, pull the sticker.

Echoing what some have said I think it depends on your needs.  If you want to be mostly un-involved and collect a check, a good property management company is a good way to go.  I have worked in the short term rental business for many years.  The good companies are dedicated, knowledgeable and typically have good staffs.  They are costly but you are getting (hopefully) top notch, dependable service for your money.

Check references for companies in your area.  Find a company that has been in business for 5+ years.  Read the owner contract carefully.  If there is any vague language concerning who pays for what, RUN!  It should be spelled out.  Things like:

1. who pays for Travel Agents costs (OTA's)?

2. how do they determine maintenance charges (hourly rate - do they add drive time?).  Do they have a monthly maintenance program that covers the nickle-and-dime stuff (light bulbs, HVAC filter replacements, minor maintenance).  Maintenance typically becomes a 'rub' when you get charged $50 to change a light bulb.

3.  Look at their web sites and simulate a booking.  Are they tacking on charges to the guest?  If so, the homeowner is usually cut out of this revenue stream.  It's a way that less scrupulous PM companies soak owners out of revenue.  Ask them about additional charges to guests.

4.  How sucessful are they at marketing?  This is another component that you are paying them for.  If they can provide you with 4 or 5 more bookings a year than you would get doing it yourself it makes a difference.  They also have knowledge for what to charge in your market.  This is valuable.  You can figure it out yourself but it takes effort.

5.  How do they handle housekeeping?  Is it done by employees or do they contract it out?  Housekeeping is THE critical component to this business in my opinion.  If your place isn't looking great when the guest checks in you are going to get bad reviews.

In all of my years I have come to the conclusion that these companies are all making similar money.  They have to to survive as a business.  If they charge 10% commission on bookings they are probably making money elsewhere with guest charges and other fees that aren't fully explained when you sign up.  If they charge  30% commission you should be getting pretty much everything covered with few or no additional fees.

Another bonus to hiring a professional PM is that they should be providing good accounting information to you.  You should have an owner portal that you can log into and get details on revenue and expenses.  You should get a direct deposit type service for your monthly income.

These are just some of my random thoughts.  I've worked both ways with our rental properties.  We like doing it ourselves but it is challenging if you aren't nearby.  Having a PM handle things provides peace of mind and minimal hassles.  This is not a bad thing.

Good luck!