A Deep Dive into Vacation Rental Property Management

Vacation rental property management is an important aspect of the short-term rental business. Without proper planning and management strategies in place, vacation rentals may be mismanaged. This could cause a drop in bookings and overall ratings. Naturally, hosts want to avoid that scenario by using reliable management tools and techniques for their properties.

At iGMS, we work with vacation rental owners and property managers around the world, and we’ve discovered that they encounter similar issues no matter their location. As a way to help hosts with whatever challenges they may be facing with managing their rentals, we’ve created a compilation of essential topics relating to vacation rental management.

Read on to discover our select tips and advice for managing your vacation rental like an expert.

Managing your rentals as a host

Many hosts choose to manage their vacation rental property by themselves instead of hiring a property manager. It’s more affordable and gives you direct control over your rentals and how much you decide to charge for them. On the other hand, self-management can be an extensive and time-consuming task.

If you decide to do your own vacation rental property management, there are a few essential tasks you will need to undertake for success:

1. Crafting a vacation rental management strategy

The first step in managing your short-term rental business is coming up with a unique management strategy. Your strategy should be based on the following factors: your monthly expenses; profit margin goals; your ideal occupancy rate; your ideal guest; marketing strategy; and business goals.

Identify key selling points

Start by making a list of your rentals’ location, size, and amenities. Is your property an urban apartment or a cottage by the beach? The type of your property and its location are the first factors to take into account when shaping your unique offer.

All this information will help you to identify your ideal guest. A city center apartment with garage parking is more likely to attract a business traveler, while a lakeside house could attract families with kids. Make sure to include the relevant information in your listing description. Make it even more prominent by adding professional photos.

Set out your business goals

After you’ve identified the unique features of your listing and the type of guest it’s likely to attract, you can begin planning your short and long-term business goals. What is the average monthly occupancy rate you’d like to hit for your rentals? Bear in mind that your occupancy rate will vary throughout the year based on when your high and low seasons take place.

You will need to try and align your occupancy rate goals with your profit margin goals. Make sure you know the minimum number of days that your vacation homes need to be booked to cover your set monthly expenses, so you’re not making a loss. You can use this data during your low season to make necessary rate adjustments and special offers to ensure you’re covering your costs. 

To get an overview of important planning and management considerations, check out our collection of useful resources:

The Complete Guide to Writing a Vacation Rental Business Plan
The Power of Vacation Rental Data and How to Master It
Airbnb Host Calculator: How to Determine Profitability

Optimize your vacation rental for a first-class guest experience:

The Must-Have Vacation Rental Inventory Checklist Every Host Needs
Airbnb Supplies: A Complete Checklist for Hosts
Eight Airbnb Amenities that Don’t Matter As Much As You Think
Top 10 Airbnb Kitchen Essentials to Stock for Your Guests
Nine Airbnb Bathroom Essentials: A Cheat Sheet for Airbnb Hosts

Learn how to attract and cater for a range of guests:

Six Types of Vacation Rental Guests and How to Attract Them
Airbnb Family Friendly: Make Your Property Safe for Guests with Children
An Essential Guide to Making Your Property Perfect for Airbnb Business Travelers
How to Market Your Vacation Rental Property to Domestic Travelers

2. Pricing your rentals

When it comes to setting a fee for your rentals, it’s a good idea to adopt a dynamic pricing strategy. Your monthly rental fees will sometimes fluctuate depending on the time of the year, the season, current events taking place, and the prices your competitors are charging. 

Estimate your expenses

First, write a detailed list of your monthly business expenses. You want to make sure your monthly earnings exceed your expenses and also generate a profit. If you’re unsure what profit margins you should be aiming for, consult with a financial advisor who can guide you.

 Also, take a look at what competitors in your area are charging for similar properties.

Research your competitors’ rates

To start off the pricing process, take a look at the rates that your competitors have set for their listings. Pay attention to their rate in relation to their rentals’ size and amenities to get an idea of the price range to work from.

Then take another look at your monthly expenses and calculate how much you would need to make per month to cover them. Add your profit margins on top of that to calculate your monthly rental rate. After that, divide it by the number of nights in a month to get your final nightly rate. 

Once you’ve done this, re-examine the rates of your competitors and compare them to your own. If your rate is within their range, then you know you’re on the right track. If your price is a lot higher than the average, take another look at your calculations and pinpoint what’s driving your fee up. 

Maybe you have an expense you could eliminate, or your profit margins are slightly too high? Bear in mind that this is just one way of calculating your rate. There are different pricing strategies hosts can use for calculating their rates. 

Test your prices

Don’t be afraid to adjust your prices to test what works. If your booking rate is exceeding your expectations, raise your nightly fee, and see if online bookings decrease or stay the same. Likewise, if your calculated rate seems to be putting off guests from booking with you, lower it slightly and see if the booking rate increases. A bit of testing can always help to determine if you are overcharging or undercharging for your rental. 

To learn more about pricing, explore our list of dedicated guides:

Airbnb Pricing Strategies to Boost Your Profit [Master Class Summary]
Airbnb Income: How to Boost and Track It Properly
Peak Season Vacation Rental Checklist: How to Maximize Your Profits This Year

3. Ensuring flawless guest communication

One of the most essential aspects of vacation rental property management is communication with your guests. Excellent guest communication is vital for ongoing business. It can affect your overall host rating and reviews of your property listing.

It’s important to always be friendly in your messages with guests, and try to reply as promptly as possible. Guests who get a direct response from a host sooner than later are more likely to follow through with the booking. In addition, guests are also more likely to book with a host who makes them feel welcome. 

Even in situations where guests may be complaining or behaving rudely, you should remain professional. If you show guests that you’re willing to listen and help, they’ll be more likely to leave you a good review or recommend your rental to other travelers. 

For more ideas on how to improve your guest communication, see our range of helpful content below:

The Art of Airbnb Messaging: 8 Proven Ways to Enhance the Guest Experience
Airbnb Communication Strategy: 7 Rules for Glowing Reviews
Generating Vacation Rental Reviews with Post-Departure Emails

4. Arranging cleanings and maintenance

Each time a guest checks out of your rental, you will need to arrange for cleaning to take place before your next guests check in. Scheduling regular cleanings will ensure your property is in pristine condition for your guests. 

In addition to this, any damage to the property or amenities will need to be handled by a maintenance team. It’s in your best interest to schedule any repairs or maintenance work as quickly as possible, so it doesn’t affect your guests’ stay. If guests have an unpleasant experience staying at your rental due to a tap leaking or a pipe bursting, they will be less likely to leave you a positive review. 

Outsource cleaning and maintenance

As the property manager, you will be responsible for outsourcing and hiring cleaning and maintenance teams for your property. Consider reaching out to local teams from several companies, and getting quotes for their services to find the best rate.

Be sure that you know exactly what services you’ll be getting from the company you decide to hire. If your property has additional amenities, such as a pool or a hot tub, you will also need to arrange for appropriate cleaning and maintenance work to be done. 

Conduct property inspections

Conducting regular property inspections and safety checks of your listing can help to prevent future hazards or headaches. Try to work with a vacation rental property management checklist when doing an inspection. This way you will be able to ensure that you don’t miss out on anything important. Preventing problems, rather than solving them, is a better strategy to use when handling cleaning and maintenance issues. 

To help you develop exceptional hygiene and safety standards, explore our list of resources for cleaning and maintenance:

Keep your Property Spotless and Sparkling:

5 Cleaning Tasks You Should Be Subcontracting Out 
Airbnb Cleaning: How to Optimize to Save Money and Time
How to Find an Airbnb Cleaning Service
Vacation Rental Cleaning Checklist [Free Template]
Airbnb Cleaning Fee: 5 Frequently Asked Questions Answered

Secure Your Rental For You and Your Guests:

Top 5 Safeguarding Tips for Your Vacation Rental Business
Airbnb Safety Concerns: How to Protect Your Property During the Winter Holidays
Safety Vacation Rental Property Checklists (COVID-19)
Top 5 Airbnb Risks All Airbnb Hosts Face (And How to Deal With Them)

 5. Marketing and promoting your rentals

Effective marketing is the cornerstone of a successful vacation rental property management plan.  Rental owners spend around $1,150 annually on advertising. But as many as 94% of homeowners think they could be doing more to market their properties.

The vacation rental industry is competitive, and only using one marketing strategy is not enough to make your listing stand out. It’s a good idea to market across various platforms and channels to maximize your listing’s visibility. 

Make your listing shine

Make sure that your listing descriptions are detailed and appealing. Include all the unique features of your property and the amenities it offers, as well as nearby places of interest. Use high-quality professional photos to visually market your listing to guests. 

Market your business via social media

Once you have listed your property on the primary vacation rental platform, set up business pages on social media channels like Facebook and Instagram. If you’re unsure about how to market on social media, take a look at your competitors for inspiration. 

Visual platforms like Instagram and Pinterest work well for content marketing. They are great for sharing travel-related inspiration and nearby attractions to your vacation rental. 

Create your own website

If you have multiple properties it’s ideal to have your own business website where guests can contact you directly. To strengthen your online presence, make sure your social pages link back to your website. 

Get a full overview of how to effectively market your rentals online by reading our vacation rental marketing guide:

 

Learn more about effective marketing techniques by checking out our collection of useful marketing materials:

Discover some of the best platforms to market your rental:

A Complete Guide to the Top 10 Vacation Rental Sites
Top 12 Airbnb Competitors and Alternatives for Hosts
Listing on Airbnb and VRBO: Getting Maximum Results from Using Both
Airbnb or VRBO: Which is Better for Hosts?
HomeAway or Airbnb: Where to List Your Vacation Rental?

Top marketing strategies and techniques:

Airbnb Marketing Strategy: Top 6 Techniques to Crush Your Competitors
Eight Not-So-Obvious Ways to Promote Your Airbnb Listing
How to Create an Airbnb Video to Market Your Property
Five Videos You Should Make to Increase Your Vacation Rental Bookings

Use SEO and ranking to cruise past your competitors:

10 unique tips to ranking among Airbnb’s best listings
Airbnb SEO 10 proven tips to boost your ranking

Harness the power of social media for marketing:

How to promote your Airbnb Instagram account
How to use Pinterest to promote your Airbnb listing

 6. Automating your property management with vacation rental software

Managing and marketing vacation rental properties is a time-consuming job. It can become even more demanding when you are managing multiple properties at once. Most professional hosts use vacation rental property management software to automate their work operations, as part of effective business management. 

Automation ensures that important jobs get done without the hassle of you overseeing each and every one of them. This can be especially useful if you have multiple responsibilities that take up your time on a daily basis. By putting routine tasks on autopilot, hosts can save time, and focus on other important business matters. 

The vacation rental industry has skyrocketed in the last few years and continues to keep growing. This has naturally made it an extremely competitive industry to succeed in. On top of that, successful property management consists of multiple tasks and responsibilities that hosts need to keep track of. Given this, it is no surprise that a majority of hosts choose to automate their businesses to safeguard their success. 

Automating your rental business will increase your occupancy rate by up to 80%. Also, you will be able to cut down time spent on repetitive tasks, like guest messaging, by up to 75%. To select the best vacation rental software for your business, keep a few important things in mind. What aspects of your job take up most of your time?

Everyday tasks like the ones below require constant attention and would benefit from being automated:

• Guest messaging
• Writing and sending reviews
• Arranging check-ins and check-outs
• Booking cleaning and maintenance teams

Other functionalities that would simplify property management include being able to access all of your booking channels on the same interface via a channel manager and having a unified calendar that updates and syncs your booking dates from multiple platforms. It’s best to do a bit of research to find out what options would best suit your business needs, and test software by signing up for free trials.

Many hosts are already using iGMS, an all-in-one vacation rental software for professional hosts. By using iGMS you can rest assured that your essential work operations are taken care of, leaving you more time to focus on upscaling the business. Our software has helped many hosts grow their rental businesses, and their customer satisfaction is confirmed by our 4.6 out of 5-star rating on Capterra.

iGMS software offers multiple smart tools and features:

• Channel manager to synchronize your reservations and prevent double bookings
• Unified inbox and automated smart messaging to ensure flawless guest communication
• A reviews automation feature to automate the process of leaving reviews
• Management of cleaning and maintenance tasks
• Financial reporting and much more.

 

Learn about automation and how it can help your business to succeed by checking out our resources section below:

Airbnb management software: 7 ways to grow your business
Vacation rental management: 8 step guide to business automation
Airbnb automation: 6 ways to put your business on autopilot
E-book: How to choose the Airbnb software for your business

Hiring an independent property manager

If you find that you’re feeling overwhelmed by the various management tasks and responsibilities, another option may be to hire an independent manager or a property management company. While it may put your mind at ease knowing that you have a person managing your rentals, keep in mind that you’ll likely be paying more for their services in comparison to a software solution. 

On average, property managers in the US charge between 20% and 40% of the monthly rental income as their management fee, depending on the property’s size and location.

Managers will charge vacation rental property management fees, so you’ll pay a monthly or annual service fee to them. On top of this, you will need to spend time finding a manager whose services match your business needs and charges a fee you are happy to pay. 

The best option for finding a manager would be to shop around and get various quotes, before making a decision. Remember to always check what services the quoted management fee covers, and if any other charges will be added on top of this fee.

For more information on finding an ideal property management service, take a look at our detailed guide below:

5 characteristics of a stellar Airbnb property management service

Becoming a vacation rental property manager

Some benefits of becoming a vacation rental property manager include a higher service fee compared to long-term rental managers, more choice when it comes to clients and listings, and flexible working hours. 

If you are interested in joining the vacation rental property management industry, first get an overview of the role and its responsibilities, and then decide if you want to pursue it as a career. Rental property managers are hired by vacation rental owners to oversee the tasks and management requirements for their listings.

Managers offer a range of services including guest communication, check-in arrangements, property inspections, cleaning and maintenance arrangements, and digital marketing. They generally charge either a flat rate or a commission-based monthly service fee to rental owners. 

Becoming a certified property manager will depend on which US state you live in, and what the legal requirements for that state are. Certain states require vacation rental managers to have a real estate broker’s license, while others only require a property management license. 

For a detailed discussion on the regulations and procedures for becoming a property manager, check out our guide below:

 

Starting a property management company

Starting and running your own property management business is an exciting prospect. Who doesn’t want to be their own boss? But starting a company also requires careful planning and liaising with various stakeholders, including clients; guests; cleaning and repair staff; contractors, and local zoning regulators. 

Check legal regulations

Before you begin mapping out your business plan, it’s important to first see what the legal regulations are for vacation rentals in your city. Certain zones in US states and cities have limited or banned vacation rental businesses from operating. First double-check what the local restrictions are for the area you want to run your company.

Airbnb has created the following resources to provide you with general considerations:
What regulations apply to my city? | Airbnb Help Center
Responsible hosting in the United States 

Next, you need to decide what kind of company you want to set up for your business. There are generally two legal entities that are used for property management businesses: an incorporated company or a limited liability corporation (LLC). Both legal bodies have their own tax regulations, as well as advantages and disadvantages. If you’re unsure of which one would suit your business needs, consider working with an attorney who can help you review both options. 

Craft a detailed business plan

Taking the time to write a detailed business plan will help you map out your goals and any potential challenges you might face. Things to include in your plan can be your business strategy; what kind of vacation rental property management agreement you will create with your clients and short and long-term goals.

If you’ve never written a business plan before, or you’re not sure how to write it for property management, it’s worthwhile hiring a business consultant or financial advisor to assist you. 

Find handy tools

Once you have your plan detailed, you need to decide what tools you will use for your rental property management company. Having a software solution in place will ensure that all tasks are accounted for, and that client and guest responses are handled in a uniform manner, guaranteeing a standard of professionalism. 

If you are looking to expand your business and take on multiple clients (each with their own rentals and guests), it’s very important to have management software in place to help you keep track of every operation.

To help you become familiar with the essential requirements for starting a property management company, take a look at our guide:

 

Conclusion

Vacation rental property management may seem simple enough when you start out. However, it can quickly become quite an extensive responsibility as your business grows, and you take on more rentals and guests.

Crafting a property management strategy, managing your rentals as a host, or becoming a property manager overseeing properties are all tasks that require detailed planning and consideration. 

Whether you choose to manage your properties as a host or you want to become a professional property manager, it can quickly become overwhelming trying to keep track of each task needed for every rental and guest by yourself. Automating tasks helps to relieve hosts and managers of day-to-day pressures that they encounter when juggling multiple responsibilities, allowing them more time to focus on larger business operations and goals.