It can be an excellent way to maximize rental income but there are certainly some ABSOLUTE Do’s and Dont's to keep in mind:
Legalities
DO - Sign up to pay your taxes online with the City and the State. Local bed taxes and state sales taxes need to be paid every month. Take the time to set up accounts on both sites right away. Both sites are a little clunky but you need to learn how to navigate them. Once you do, paying taxes can be pretty quick.
DON’T - Forget to sign up to pay your bed and sales taxes! Both the City and the State are vigilant about going after people who aren’t paying. I have even seen the State sift through MLS listings to see if properties for sale had been paying. They actually looked at listings online to see if there was any mention of rental income in the description then cross-referenced those numbers with their files. One owner we were working with had to go back and pay $5,000+ in back taxes, penalties, and interest after being found out this way.
Online Presence
DO - Set up a website and business Facebook page. These will be the online hub of your business. Build your own site if you like but it isn’t necessary. There are plenty of pre-packaged websites out there that are made specifically to service a vacation rental property. VRBO.com is certainly one of the most popular in our market but there are others.DON’T - Set up a Facebook PERSONAL page for your property. When done right, Facebook advertising can be highly profitable but posts can’t be boosted and ads can’t be run to personal pages. Be sure you set up a BUSINESS page for your vacation rental business.
DO - Request online reviews from your renters. Again, online reviews can make or break a small rental business but many vacationers simply won’t take the time to write one…even if they had a great time. Have a system to send a follow-up email right at the end of their stay and make it easy to click a link to leave a review.
DON’T - Forget to acknowledge reviews, good or bad. Make sure that you thank your guests for leaving you a good review while also addressing any complaints. Thank people online quickly and often so that other potential guests see the interaction. Also, acknowledge any complaints online but take those offline as fast as possible to handle privately one on one.
DO - Get social. Almost every neighborhood or condo project will have a social media site/page for owners. Join the groups and interact. It is a great place to share information, meet new people and even fill holes in your rental calendar when you have a last minute cancellation.
DON’T - Ignore social media. You can do a lot to help your business and stay informed just by checking Facebook on occasion. Even better, set up alerts so that you are automatically notified when a post or comment is made.
DON’T - Ignore social media. You can do a lot to help your business and stay informed just by checking Facebook on occasion. Even better, set up alerts so that you are automatically notified when a post or comment is made.
There's an App For That
DO - Purchase a thermostat that you can control over the internet. The Nest Thermostat is one of the most popular but there are others. It is easy to put limits on the temperature controls…right from your phone. As much as you want your guests to enjoy the beach, sliding glass doors don’t need to stay open in July with the HVAC set to 60. This will help control electricity costs tremendously and ultimately save you money on bills month to month AND HVAC maintenance.DON’T - Trust your guests to control the HVAC. A few high electric bills are one thing, but having a mold problem is quite another. You might have a guest think they were doing you a favor by turning OFF the AC when it isn’t blazing hot outside but temperatures can vary dramatically in the Spring and Fall. One night may be in the 50’s but it could easily be in the 80’s the next afternoon. If the air isn’t running, mold can grow and if it does, it grows FAST. Some types of mold are major health hazards and require a full premeditation to remove…this can easily run thousands of dollars.
DO - Install an internet door lock. Like the thermostat, there are plenty of locks on the market you can control straight from your phone. The best ones have keyless entry AND a hard key. KABA is my favorite. Codes are only good for certain days/times and you can create different codes for different users. Your cleaning company, brother, handyman, friend, and HOA can all have different codes. If you ever suspect a problem, you can audit the lock history to see which code opened the door at what times.
DON’T - Trust guests with hard keys. Even responsible adults lose things. If you live out of state and a guest loses your key AND the back-up, it can be costly and inconvenient to get a replacement to them quickly.
Rental Calendar
DO - Control your rental calendar. One of the biggest shortcomings of a professional rental manager is that they accept AUTOMATED online reservations. In other words, a vacationer can simply go online and book a condo or a house for the dates THEY want. Sounds like great service, right? Well, in high season when rental rates are the highest, if someone wants to book one week from Tuesday to Friday then someone else books Sunday to Wednesday, you can see how quickly massive income gaps can accumulate. For the most part, vacationers understand that renting from Saturday to Saturday is the only option. ONLY accept rentals on a weekly basis in season to maximize revenue.DON’T- Feel the need to have your calendar full in January. It feels great to look at your calendar on January 15th and have almost you entire season booked. However, you could be leaving money on the table this way. Plenty of people book early, but just as many book last minute. Don’t be afraid to set your rental rates a little high early in the year, especially for the holiday weekends. You can always offer specials and discounts if you get close to the season and have some holes.
Relationships
DO - Hire a reputable cleaning crew and at least one back-up. Online reviews are EVERYTHING for your rental business. Make sure your cleaning crew is EXCELLENT. Have a Plan B just in case your preferred crew is ever sick or just overbooks. Your beach getaway must be spotless for every guest to consistently get top ratings.DON’T - Go cheap on cleaning. Find a great crew and pay them well. This gets charged to the guest the majority of the time anyway. Take care of your cleaners and they will take care of you.
DO - Establish a relationship with a local handyman or two. Just like your cleaning crew, a professional handyman can help land you good reviews. In the event of a problem, a timely, professional response will go a long way with your guest.
DON’T - Neglect small maintenance issues. Even if your guests just gives you a “courtesy call” to let you know about a small problem, address it immediately. The issue might not bother your guest but you never know when a small problem can turn into a costly one.
DO - Get to know the people that work in the HOA office. You want them on your side. Be sure they know who you are and of course, be sure you understand their rules. A good relationship with the HOA can help you in many ways down the road.
DON’T - Annoy the HOA. Remember that the HOA is the HOMEOWNER’S association. They work for and represent the owners. However, it doesn’t mean that they are your personal servants. Understand HOA rules, pay your dues on time and maybe take them some doughnuts on occasion but don’t become the owner that they dread seeing walk in the door.
Matthew and Jennifer Giles from Atlanta, GA recently purchased their second condo with me. I have known many, many owners that have self-managed and done well but am not sure if I have seen anyone do it better.
Read A Word From the Wise as Matthew shares some of his tips on how to be successful in self-managing vacation rental property.
