New to the short-term rental industry? We share advice on where to start
Are you new to the short-term rental industry and don't know where to start? We share some advice that we're gathered managing short-term rentals.
Published on 03 Sep 2021
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Starting a business is hard. Most entrepreneurs spend many months figuring out the basics through trial and error.
To help you get started - and avoid the guesswork - we’ve identified the 6 core principles new Airbnb Hosts and investors should focus on when starting their short-term rental (STR) journey.
Stick to Airbnb
If you are new to the vacation rental game, the best place to start is on Airbnb. Aside from the fact that the company has millions of travellers looking for accommodation, they have also developed a technology platform that makes it easy to get started.
A few key advantages of focusing on Airbnb includes:
Handling payments through their platform
Having a large global audience reach
Extensive guest verification filters
Transparency over reviews to assess the profile of your potential guests
Host insurance coverage of up to $1,000,000 USD for property damage or personal injury to a guest or third party
Not only will Airbnb help you set up your listings, but the platform also has ongoing safety features to help you find desirable guests and avoid parties, complaints and damage to your properties.
__Hometime Tip__ Once you are up and running and confident that you have all systems in place, you may want more visibility. This is when it’s time to go multichannel — get started here. *
Get 5 quality properties
If you are new to the STR industry, getting to 5 quality properties is the sweet spot. Why? Before then, it's hard to retain cleaners as there is not enough work, you aren't making enough money and lastly, there are no economies of scale. All these things start to improve once you have at least 5 properties.
__Hometime Tip__ Ask your small group of existing customers to help you grow your portfolio. Property investors generally know other property investors — one of the best ways to grow your business in the early days is to proactively encourage referrals*
Find a really good cleaner
We cannot stress enough the power a good cleaner has on your STR success. While it’s obvious that no guest wants to start their vacation in dirty sheets or with mould on the wall - the right cleaner can really up your rental game.
When looking for a cleaner, find someone trustworthy, communicative and flexible enough to meet your needs when you have last-minute cleaning requests from guests. If a guest is leaving late on Sunday night or you have the same day changeover - a reliable, savvy cleaner is the difference that gets you those sought-after 5-star reviews.
Over the years, we've hired contract cleaners, domestic cleaners, commercial cleaners, beginners and veterans — here are our recommendations for hiring the right cleaner.
Find cleaners that have experience working at 5-star hotels where they learn presentation and attention to detail which is key in short-term rentals
Find a cleaner looking to grow their business with you and has the potential and capacity to take on more responsibility in the future
Find a cleaner who has good communication skills, both verbal and written
Assign the same cleaner to the same property every checkout to build accountability and get reliable feedback via reviews
Consider incentivising by giving a tiny share of the management fees as this reinforces accountability and ensures they go the extra mile to uphold your properties’ good reviews
__Hometime Tip__ If outsourcing your cleaning is too expensive, split the cost of cleaning between the guest and homeowner. This allows you to keep your cleaning prices attractive to guests and ensure you can pay your cleaners fairly. Your justification? By investing in a good cleaner, you reduce the overall wear and tear (while upholding 5-star cleanliness reviews), which is a surefire way to increase revenue.*
Automate your operations
Airbnb has some limited automation features which are helpful when getting started. Make sure you take advantage of the scheduled messages feature and the check-in guide to automate check-in instructions for your guests. We also recommend you consider the smart pricing settings to increase booking conversion, however, Airbnb has been known to aggressively reduce prices to attract guests so set a high base price and a fair minimum price. When you want to get a little more sophisticated, Hometime Platform has an excellent property management system with a freemium offering for smaller managers. With the Hometime PMS, you can automate cleaning tasks, financial statements for owners, guest communications and a whole lot more. Check out the task management features here.
__Hometime Tip__ We suggest automatically setting up all listings with a 2-night minimum stay to err on the side of caution. You will also want to make sure you have strong vetting processes so you can take last minute bookings & maximise revenue.*
Register as an LLC company
Running a successful portfolio of properties means setting up legitimate and compliant operations. Don't let sloppy admin bring risks into your business. We suggest registering as an LLC company (or equivalent), arrange the appropriate insurances, get the right licenses so you can then project confidence to your clients.
__Hometime Tip__ Many managers leave this too late. There is an abundance of online services which conveniently assist with the company set up for an affordable fee, which will also help with yearly compliance. Getting a real estate license will also help build credibility and allow you to lease property on the long term market.*
Sales, sales and more sales
As new property managers, it's very easy to get swamped by your operations. If you set up good systems, such as the Hometime PMS, you give yourself enough time to focus on sales and acquiring more clients. To drive more sales, we suggest focusing on referrals, building relationships with real estate sales agents in your area, polishing your elevator pitch and refining your sales collateral.
Referrals: If you are providing exceptional service, your clients will likely be referring already. However, you can always give them an extra push by asking them directly if they would be willing to share any contacts who might be interested in your services. If you want to be even more aggressive, you could offer an incentive such as one month free for a successful referral — this might sound expensive when you are starting out but that offer pays itself back 24 times over if your new client hangs around for 2 years.
Marketing collateral: You don’t need to be a design whiz to have beautiful materials for your prospective clients. We recommend signing up to Canva and leveraging their templates to make beautiful, simple and professional brochures and flyers. If you really want some assistance, check out Fiverr or DesignCrowd for low-cost support.
Real estate: It’s easy to find sales agents in your area and it’s important to know that their number one priority is selling homes. If you can help them sell a property by providing an earnings estimate based on the potential Airbnb income, they will happily refer the new owner your way.
__Hometime Tip__ Professional photographers often shoot properties for private clients and can be a good source of leads if you can incentivise them to refer to you.*
About Hometime Platform
Hometime is a technology platform for vacation rental managers and short term property managers who want to grow their business. We've built a PMS with business tools to enable growth and combined this with best practices and an involved community to help each other succeed.