Starting out as a vacation rental property owner comes with its own unique set of challenges. Unfortunately, many vacation rental owners run into some common pitfalls that can hold their businesses back. In this article, we’ll address ten of the most common vacation rental management mistakes and provide prevention tips and solutions for each of these issues.
Common Vacation Rental Management Mistakes
Below are some of the most common vacation rental management pitfalls that can negatively impact your business.
Mistake #1: Not Following All Rules and Regulations
If you don’t take the time to research all of the laws, rules, and regulations regarding vacation rental properties in your area, you might run into trouble. Be sure to look into regulations regarding noise violations, excessive parking, and trash. You’ll also want to research occupancy limits, registration requirements, and tax collection regulations in the area before starting up your vacation rental business.
Mistake #2: Underinsuring the Property
Whenever you have strangers staying on your property, you take on some liability. It’s essential to always have vacation rental property insurance in place that will cover you in case any problematic situation arises. An easy way to start is by looking into extending your current home’s policy to protect your vacation rental as well. If this isn’t possible, many different companies offer rental property insurance at reasonable rates; be sure to compare a few before deciding on the one that’s best for you.
Mistake #3: Listing Your Property on Only One Site
By only listing your property in one place, you’re missing out on a lot of potential income! Listing your property on only one website is essentially putting all of your eggs into one basket. Your listing will be seen by fewer people overall than if it were listed in multiple places.
In order to maximize bookings, it’s best to list your site on as many sites as possible. Using vacation rental management software saves you time and effort by automating the task of listing your property across multiple sites.
Creating a website specifically for your vacation rental property is also a great idea. Adding your website link to all of your social media accounts is an effective method of generating more traffic to it. Be sure to share relevant info on your social media profiles and promote your property to achieve additional bookings.
Mistake #4: Creating a Subpar Listing
A common mistake made by vacation rental owners is creating a low-quality listing: a description riddled with spelling errors and typos, blurry photos taken in low lighting. Your listing needs to be professional and showcase your property. It’s the only information your potential guests have to make a decision, so it needs to be good. A lack of effort on your part is sure to show in your bookings since poorly-written listings can deter guests.
One simple way to avoid this issue is to write up a good description and capture quality photos that show off your property. You could also hire a copywriter and photographer to take the task off your hands.
Mistake #5: Not Requiring a Security Deposit
When you’re starting out with a vacation rental, the sheer number of tasks to complete can feel quite daunting. Sometimes, writing up a clear set of house rules and asking guests to sign a rental agreement can be put on the back burner. However, this is one of those tasks that should never be skipped over. It’s essential to compile a list of rules that covers your security deposit policy so that all of your guests can sign it before staying at your property.
Without a signed agreement and vacation rental security deposit, you could end up with property damage for which you’re 100% financially responsible. Plus, putting these policies in place allows for peace of mind and security. When guests pay a security deposit ahead of time, it acts as an incentive for them. They’re much less likely to cause any damage and to treat your property with respect because they’ll want to get their deposit back at the end of their stay.
By writing up an agreement, you can require your guests to sign it saying they’ve read through, understand, and agree to follow your rules. This protects you if your guests break any rules or damage the property in any way.
Mistake #6: Charging the Wrong Price
Improper pricing practices can cost you bookings and profits! If you set your prices too high, guests are sure to choose more reasonably-priced properties over yours. On the other hand, low prices can attract guests, but setting the price too low means you’ll lose out on profits.
A dynamic pricing model is most effective. In a dynamic pricing model, the price of one night’s stay at your property fluctuates depending on demand. Demand might change during peak season or if any big events are taking place near your rental. Demand can also fluctuate as a result of similar properties’ rates changing.
It can be difficult and time-consuming to keep up with dynamic pricing on your own since it requires research, calculation, and constant adjustment. Luckily, there are many different tools that can automate the process and save you time and effort. Read our charging for vacation rental blog for more information.
Mistake #7: Accepting Every Booking
Another mistake made by vacation rental owners is accepting every booking that comes along. One issue is that this can block out certain parts of your schedule and keep you from taking on more advantageous bookings (like if someone books your property for a Sunday night and you can no longer rent it out for the entire weekend).
Accepting every booking can potentially lead to property damage as well. For example, some young people are willing to overpay to book a property for a party. And as a rental owner, sometimes you just get a gut feeling about certain bookings that shouldn’t be ignored.
Therefore, rather than accepting every booking, put some screening processes into place. Set rules regarding the number of people you’re willing to let stay in your house, as well as how old they need to be, and stick to them.
Mistake #8: Doing Too Much on Your Own
Another common mistake for vacation rental owners is trying to do too much on their own rather than hiring other people (namely a cleaning service and a property manager) and automating various processes. By doing everything yourself, you can hold back your business’s growth because you won’t have enough time to complete all of the work that comes along with expansion.
Even if your business is small and somewhat manageable on your own, you’re still spending a lot of time and energy on things that could be much easier if you automate your vacation rental homes using a PMS (Property Management System).
Mistake #9: Not Providing Good Customer Service
It’s important to remember that you’re not just the owner of the property. You’re responsible for the entire customer experience! One of the biggest mistakes you can make is to fail to provide good customer service and hospitality to your guests.
The way to avoid this mistake is pretty simple: Always remain professional, kind, and courteous when interacting with your guests. A positive attitude can go a long way. In addition, be as responsive as possible when you receive messages from current and potential guests. It’s important for them to be able to reach the owner of the rental property in case they have any questions.
The truth of the matter is that there are demanding customers to deal with in any industry. People often save their hard-earned money to go on vacations, so they have high expectations for their stays. Although it can be challenging, remain calm and collected as much as possible when interacting with unhappy guests.
Mistake #10: Not Requesting Reviews
Reviews are essential to having a successful vacation rental property, so it’s no surprise that not requesting reviews is one of the biggest mistakes you can make as a vacation rental owner. Guests tend to trust properties with several reviews more than properties with fewer reviews or primarily negative reviews. And without reviews, you’re missing out on valuable feedback about your property and the guest experience you’ve created. Reviews will let you know what is good and what needs to be improved.
Reviews are essential to having a successful vacation rental property, so it’s no surprise that not requesting reviews is one of the biggest mistakes you can make as a vacation rental owner. Guests tend to trust properties with several reviews more than properties with fewer reviews or primarily negative reviews. In the end, great reviews result in more stays whereas, without reviews, you’re missing out on valuable feedback about your property and the guest experience you’ve created. Reviews will let you know what is good and what needs to be improved.
The thing is, guests tend to forget about posting a review unless they’ve had a particularly bad experience, so it’s important to ask them to leave one. You can send a message to guests after check-out politely asking them to leave you some feedback. It’s even possible to automate this process so that guests receive the message a few hours after they’ve checked out.
Here are the top ten mistakes to avoid as a new vacation rental property owner:
- Not following local rules and regulations
- Underinsuring or not insuring your vacation rental property
- Only listing your property in one place
- Creating a poorly-written listing with low-quality photos
- Not requiring guests to sign a rental agreement and pay a security deposit
- Charging the wrong price or using static pricing
- Accepting every booking
- Doing too much on your own and failing to automate
- Not providing good customer service and hospitality
- Not requesting reviews from your guests