Most people are averse to purchasing a home without seeing it in person first. However in many markets by the time you see a property and make arrangements to fly down, the house will have a pending offer already. There is wrong with purchasing a property without seeing it first, save for an unfounded fair.

Following are 4 steps that will get your house to be ready for hosting a vacation rental.

Understandably, this advice does not apply if you are doing the BRRRR method. In that case, you would want to see and consult with a contractor to determine what kind of renovations you should budget for. Neither would I suggest this if you are purchasing a luxury home. Then it does make sense to visit first and make sure things are similar to what was advertised.

However, if you are purchasing a 3/2 basic home that just needs a fresh coat of paint, perhaps some new carpeting and needs to be fully furnished, then this post is for you.

Step 1.

Look for a realtor in your target market. I generally base my preference on the realtor that has the most reviews on Google. I reach out and ask to be referred to an agent that has experience with the vacation rental market. Once I make this connection, I will have the agent check out houses that seem OK in online photos. The agent should visit the property and do a live stream or at least a video walkthru while mentioning issues in the house that might not be obvious in the video.
Once you have found your house and gotten it under contract proceed to the next step of getting a home inspector.

Step 2.

Hire a home inspector. I will use Google again and hire the best-reviewd home inspectors I come across. After calling a few, you can settle on one that provides the most detailed inspection but is not overpriced.

DO NOT hire an inspector referred by the realtor. There can be a conflict of interest so avoid mentioning who you will be using at all costs as they might know each other.

The home inspector will point out issues that only a professional can determine. If you are not construction savvy, you probably would not have noticed these issues even if you would have taken the time to visit the property.

Of course, ask the home inspector to point out obvious issues that the realtor may have failed to report in the initial walk-thru.

Step 3.

Find a designer. You can try to get a designer in the door with the seller’s permission while under contract to speed things up a bit. Generally, it is best to conduct an online meeting and discuss the look you want to have for your vacation rental. You will need the designers to not only choose the art and furniture but also facilitate delivery and set up from the local furniture store.  They might want a retainer to cover the outlay of the costs of purchasing on your behalf.

For dishes, small appliances, linens etc, you might want to shop online yourself as the designer’s hourly fee will make this an unnecessary expense.

Plan to have the realtor or designer bring in the items that will be delivered unboxed. I try to stack the delivery dates as close as possible so it doesn’t have to be more than 3-4 trips of putting boxes in the house.

Keep your shopping list in an Excel Sheet so you can easily purchase the same items for every Airbnb you buy.

Speaking from experience, I must have spent hours researching mattresses and lines when setting up my first Airbnb. On the second round, it took minutes. I did make some adjustments as prices change on the items that you previously purchase and might have been on sale. This is a good reason to not only keep links to what you purchased in your excel sheet, but what you paid for it as well.

Step 4.

Find a cleaner/manager.

This is the most important piece in setting up your vacation rental. A poor-performing cleaner will absolutely wreck your ratings. Try to find a manager that can also do small repairs, as breakage will inevitably occur.

Depending on your location, you might find a cleaner with a quick google search. In more remote locations, it might involve putting some ads in the local papers.

That’s it. You managed to do a vacation rental from a distance!

One of my recent purchases was a home that has 2 units on the property. At first, we were not too excited about it as we were looking for a 7-bedroom home. Having two homes seemed like we were splitting up the party. We would be unable to rent them separately as the pool was shared by both homes as can see in the picture above.

Finally, we made a decision to go ahead with is as we realized that as much as extended families like to spend time with each other, it would also be nice to provide them with separate accommodations. They can enjoy the yard and pool together but at night when people are putting kids to sleep, a bit of space can be appreciated. I can just imagine first cousins whispering throughout the night and being too excited to go to sleep.

So far, we have not had trouble renting out these homes. While it is not our go-to option, I thought this was a nice observation to share with those who may come into such a situation.

P.S. I am about to release a book on short-term rentals in the next couple of days. This has been months in the making. In it, I share how to successfully purchase a short-term rental, and then run it like a pro. All the latest tips and coolest software will be included in this short, no fluff straight to the point book!

There are a couple of strategies one can use in order to score direct bookings.

You can decrease prices on your website and have them lower than advertised on the OTA’s. (Online Travel Agencies).The guest would pay less but the host would net more since the fees associated with OTA’s would be irrelevant.

Another way would be to offer amenities free of charge that would otherwise cost the guests if they would book via OTA’s (To learn more about charging customers for amenities, check out my articles about Mount and Dack).

However, there is still one hurdle to overcome when trying to woo guests to book direct on your website.

TRUST.

Guests may still rather pay more or/and not get free amenities for peace of mind associated with booking with OTAs. For example, Airbnb will place a guest in a similar home should they experience a last-minute cancellation from the host or if the advertised space is not as advertised.

However, when people book direct, they are at the mercy of the host to play nice and have their expected comfort level guaranteed. They can land at their destination and find out that the 5-star reviews and amazing photos they saw were a scam and there is no property to speak of.

This is where I-PRAC can help.

According to their website:

“I-PRAC gives property owners and rental agencies an opportunity to demonstrate their credentials to travelers by completing an in-depth verification process. Working with government agencies worldwide, I-PRAC conducts comprehensive checks on rental agencies and property hosts, using sophisticated verification techniques that are unavailable to travelers. These checks include, but are not limited to the following:

• Passport verification
• Proof of property ownership
• Proof of address
• Proof of bank account registration
• Proof of company incorporation
• Verification of personal contact information
• Verification of property listings, photos and reviews

When a property owner or agency is approved, they can add an ‘I-PRAC Approved’ logo to their website and property listings. All logos include the member’s unique ID number that can be verified through the I-PRAC member ID search.

£199.50 is what it will cost you as a homeowner and 2.5 times that amount for a rental agency.

They will require a passport as well as photos from the house as well as utility bills to ensure that the one applying for the certification is truly the owner.

This is another way to differentiate yourself from the competition and up your game for direct bookings.

Well, it’s there for a reason. People love to touch them and interact with them.

Now you can introduce these screens to enhance your guest stays using GuestView Guide!

GuestView Guide is a large LCD screen that is best installed right near the front door. As soon as your guest walks in, they can see what there is to do in the area, call the housekeeper/manager. They can also order food and book local activities.

You can add troubleshoot videos on how to work the hot tub, increase the pool heat and show how to work the entertainment system.

You can also schedule reminders when garbage pickup is as well as feature your guest book on the screen.

Of course, when it’s time to leave the system will ask your guests to pose for a photo before they checkout. This will give them lasting memories and encourage them to visit again.

GuestView Guide does not sell the monitor, they have a subscription-based model at $39.99 a month.

While this may not make sense for small rentals, this is definitely something to consider adding if you operate a luxury unit.

Dtravel promises to give hosts the option to have a book direct short-term rental website that accepts fiat (government-backed currency) as well as crypto.

Their website celebrates the fact that they got their first reservation in crypto was accepted in July of 2022.

Like all crypto-related questions is blockchain the future or a passing fad? No one can tell for sure but it sure is trying to cater to future Web3 technology.

They were nominated for the Skift IDEA Awards 2022 for the ‘Companies on the rise” category. Their goal is to become an alternative to Airbnb where hosts get more control over the revenue without the need to pay payment processing fees as well as the opportunity to earn their TRVL token for each booking they accept.

They claim to build trust between hosts and guests and give a voice back to the community. I don’t think you need a Peer to Peer currency to build trust or give a voice back tot hte community.

There is no way to dispute a crypto transaction once it is paid to the host, unlike a credit card charge that has built-in measures in case a booking is canceled and the payment is not refunded.

Like all things crypto, time will tell if there is any use of Dtravel in the future.

They do show their timeline for 2023 and that is definitely a good sign that they know where they are headed and what they want to accomplish in the coming year. Time will tell if there is enough demand and interest to support a Web3-based booking site.

What are your thoughts?

But what if you don’t have any amenities to rent out at your place? What if you do have amenities, but you want more options to upsell to your guests?

DACK is the answer! 

When you sign up with Dack, they will provide your guests with their app that will have all information they might need. You will be able to present yourself as a great host, giving them the tools to plan the experiences they might want to have when they are at your place.  From when they book their vacation, you can provide value by having all the information like Wi-Fi, entry code, in-app Uber to get to your home as well as the link to your website.

If you get frequently asked questions, how about shooting a video? Show your guests how to operate the equipment so that you don’t have to constantly explain and re-explain how to get the hot tub working.

Most of the upsells occur prior to your guest stepping into the door. From when they book until their date of arrival you can bet they are looking at what to do once they get to your area. Now is the time to help them out! You can upsell them on Personal Chef Services, local things to do, a masseuse that comes to the house etc. You can partner up with each of these local vendors and do a revenue split with them once guests reach out to them.

For example, say your guests want a personal chef to come and cook for them at your home. There will be an option for your guests to order the personal chef in-app. Your chef will get the alert and either deny or approve the request based on their availability. If they accept, the payment will be taken in the app so there is no need for you to collect money from your guests. There are hosts that make half of their income by curating a great deal of upsells with local vendors.

Your guest that booked can also invite other participants of their reservation to download the app and make purchases. Each guest that downloads the app will have their information captured. This will allow you to market to each of these guests further down the line. For example, you can have a message go out to your guests 30 days after checkout with a promo code asking them to come back with a link to your direct booking website!

I have no affiliation with Dack but I am eager to share this with you!

Mark had 12 different leading companies in the short-term rental industry contribute to the book. Each one is unique for its service, and explain how they can add value to your rental.

Being in this industry for 4 years now and constantly consuming industry news, I was quite excited at what I learned in this book.

In the next few posts, I will try to cover the best tips and exciting items I gleaned from this amazing read!

One of the most exciting companies featured is Mount. Mount allows you to provide extra amenities at your place and charge like a pro.

For example, traditionally you may have put a lock on the bike or grill that you offer your guests to use. If a guest wants it, you can send them a money request via Airbnb or website. However, this takes communication between you and the guest as well as the need to send a money request. As you start to scale this becomes a pain each time you need to collect a measly $10-20. There is also the issue of having a lag from when the guest asks about using the amenity and you responding with the money request. Then the guests have to send you the money and you have to respond with the unlock code.

With Mount, you get to automate the entire process. This frees up your time to provide and collect payment for amenities.

For example, say you want to sell firewood for your awesome firepit.

You can purchase a firewood box from Mount. It will come with a lock and QR code. If a guest wishes to make use of the firewood, they simply scan the QR code, pay the fee for the firewood and get the code to unlock the box.

ALL AUTOMATED!

Additionally, they have built-in insurance policies for kayaks, bikes, and scooters. If a guest rents a kayak and takes it off your property, your insurance may not cover you if they are injured using your kayak at an offsite location. When you use Mount, you and your guest automatically get insured for the duration of the rental!

Check out Mount and start adding them to your Airbnb locations! Hey, you don’t even have to own an Airbnb to make money with Mount. Start renting out your bike or Kayak from your garage!

It is important to know that should you decide to install cameras, you must make mention of that in your listing so the guest knows about it PRIOR to booking. The same goes for noise monitoring software. You can say that you employ cameras for the guest’s safety. This way they don’t feel l like you are out to babysit them, but you must disclose them nevertheless.

Here are some reasons why you should or should not consider installing cameras at your rentals.

You should consider installing cameras at your vacation rentals if you have limited parking and there is a good chance guest will park on the road. You would want to make sure that should you receive a complaint from a neighbor, the complaint is valid. I once had a guest who parked their car blocking my neighbor’s driveway. They carpooled with other guests and spent the day in Disney’s parks while my neighbor was able to barely get their car out.

Another good reason to have cameras is when you have a home that can potentially attract parties. The best way to monitor parties is by using Noiseaware and Partysquasher.

PartySquasher can monitor if there is an unusual amount of devices logged into your WiFi network. Noiseaware can pick up decibel levels that exceed the norm. You are able to set the decibel level sensitivity based on the time of day. You might be OK with noise by day but not want that after 10 PM. If you get alerted by one or both of these devices, then it might make sense to check the cameras and see how many cars are in the driveway before reaching out to your guests with a reminder about the “no parties” rule.

Another reason why you may want to get cameras even if you don’t have neighbors that would be bothered by parked cars or noise is for security reasons. When your rental is empty you can potentially be a target for theft. Especially if you are in a remote location where you cannot rely on a neighbors recording devices.

I am not a proponent of checking cameras periodically, you would only want to check cameras if you are alerted to a situation that might turn out to be problematic. If you do habitually check cameras, you will be setting yourself up for heartache, for sure. As they say, ignorance is bliss.

Here are some reasons why you may want to go forgo cameras altogether.

If your rental is in a building that has its own surveillance systems, you may want to rely on that for security issues. In the case of a party, using Noiseaware and Partysquasher should be good enough.

If you are in an urban area where your neighbors have cameras and parking won’t be an issue, you may want to rely on your neighbors to provide footage of illegally parked cars or a party in progress.

I have had parties and cars blocking driveways and all it took to stop it was a quick call from my neighbor and I was able to stop parties. Hey, even the bad guys care about their reviews.

If you do decide to get cameras, I would suggest getting them only for the front exterior of the home. I have had people suggest getting peephole cameras for increased security and having them by the pool area in case someone got hurt and they were sued. I don’t think these are good ideas at all.

Peephole cameras are a good way to catch a thief who may want to avoid an obvious camera. In the event that he removes his ski mask when he thinks he is not being observed, this may cause a gotcha moment. However, I don’t think guests appreciate being told bout peephole cameras as this leads them to think that you have them in the interior of the home as well.

Having them in the interior of the home is against the law in many states and against the policies of VRBO and Airbnb.

Having cameras in the pool area may do more harm than good. A better way to protect yourself from a lawsuit is to have a sign that states “swim at your own risk”.

Vrbo’s camera policy “allows reasonable monitoring of the outside of the property while still protecting privacy inside the home.” The policy prohibits image or audio recordings inside short-term rentals with the exception of smart devices. Smart devices may not be activated remotely and are only allowed when the guest is informed and has the option to deactivate the devices.

Surveillance devices, including security cameras and smart doorbells, are allowed outside the vacation rental when they are intended for security purposes only and the location and coverage of the devices are disclosed in the property description.

Airbnb has a similar surveillance policy:

• Intentionally concealed recording devices (such as hidden security cameras) are never permitted
• Airbnb prohibits security cameras or recording devices that are in or that observe private spaces like bedrooms, bathrooms, or sleeping areas
• You must indicate the presence of all security cameras or other recording devices in or around a listing, even if they’re not turned on or hooked up
• Undisclosed security cameras or other recording devices are never permitted
• You must also always disclose if an active recording is taking place

In summary, I think cameras have their place. Not all situations call for them, but if you do need them, make sure they are in positions where guests won’t mind, and make sure they are disclosed in your listing and that you only photograph the exterior of the home.

But first lets review 3 Terms. Occupancy, ADR and RevPAN.

Occupancy.

Occupancy means how many nights you were booked a month. 50% means 15 nights out of the month, 75% means 22.5 nights, and 90% occupancy is 27 nights.

ADR

ADR is an acronym for average daily rate.

Say a listing in your market is booked for 20 nights a month on average, 10 nights at $50 and 10 nights at $100. The average daily rate for the 20 nights booked is $75. The total combined revenue earned for the month is $1,500.

REvPAN

RevPAN refers to  Revenue Per Available Night.

(RevPan is a borrowed term from the hotel industry that uses the term RevPar Revenue per available room).

Now that we know what our average daily rate is, what if I asked you to tell me how much you potentially would make per night? $75 was the average for the 20 nights that were booked this month. This did result in a monthly revenue of $1500.

However if you were to take the $1500 and divide it over the month of 30 days, you would get the number per night that you REALLY  earned. It is less than $75 a night because you averaged out the daily rate only on the nights that you were actually booked. If you were to take into account the 10 additional nights that you could have booked, you would be at a lower nightly rate of $50 a night.

This is calculated as $1500/30 (nights) = $50 a night. OR you can calculate it by the average daily rate multiplied by your occupancy. 20 booked nights will put you at a 66% occupancy rate. 20/30=66. Your occupancy rate of 66 times your average daily rate of $75 would be 75X.66=49.5.

Your RevPAN will always be lower than your average daily rate unless your occupancy is 100%. In that case, it would be the same as the ADR.

There are two ways to increase your RevPAN. You can either drop your rates and thereby get more bookings resulting in a higher occupancy rate. Or you can increase your ADR and get fewer bookings. If the RevPAN stays the same in either scenario that means that your pricing strategy did not affect your monthly revenue.

You will know that you made a good decision when your RevPAN increases. That’s when you know that you are getting more revenue for the month. You might be pricing lower, but the higher occupancy is working in your favor and increasing your revenue.

I hope this clears up the difference between ADR and RevPAN and how occupancy rates and RevPAN are correlated.

The best way is for you to connect your network with your realtor’s network. If you are fortunate to have an excellent realtor, there is a good chance that they are in touch with a great team of handymen and home decorators. If you have a good relationship with your realtor, they may be able to refer you to the best electrician around or the best home decorator in town. In addition, many times if you come as a referral from a realtor, you can get special pricing or get scheduled quicker than if you reached out to them without a referral.

The reason is that these professionals want to have your realtor continuously refer jobs to them. If the client is happy with the price and schedule, then they are bound to share feedback with the realtor who will then refer these trade professionals again. The cycle feeds itself over and over.

A second way to get top professionals is to use Thumbtack.com. You can try Yelp or Google but Thumbtack is my favorite as it allows you to easily enter your project details and then share them with other professionals with the click of a button. Thumbtack has ratings and reviews for each business. They will also tag professionals as “remote services” which means they are used to working with clients who won’t be at the job site. “Great Value” and “High Demand” are also tags to look out for.

A third way to find these professionals is through word of mouth. If you are in touch with other investors in your location, reach out to them and they will often be happy to share referrals with you. Here is the interesting thing about real estate investors. Unlike other industries where secrecy rules the day, real estate investors love to talk!