How to Self Manage a vacation rental property
There are a few things you need to manage your property that will make your job easier. You could employ a rental management company to do this for you but you are usually paying 20% of your rental for this and it's something you can easily do yourself if taught how.
I'll elaborate on each of these below individually.
- Vacation rental license agreement
- Key less locks so you aren't passing keys back and forth with renters
- Reservation management software (PC based or web based)
- Ability to accept credit cards as payment
- Local Services (cleaners/inspectors, hot tub services, linen services, emergency contact)
- Vacation rental guide for the home
- Website and email address for the home
- Alarm system and exterior video surveillance
The Benefits of Self Management
- Money. The whole reason to rent your vacation home is to have it generate you money so why give someone else 20% of your income for something you can do yourself?
- Damage Deposit. Most rental companies do not take damage deposits anymore believe it or not. They charge a "peace of mind" insurance or "accidental damage" insurance. This is a straight profit to the rental companies and hurts you the owner in the process. It is generally setup to not cover "willful or wanton" damage and negligence. 99% of all damage falls into one of those categories and the rental company does not want to pay and asks you to file a small claims case against the renter. Cash damage deposits of $500 or more is great incentive for the renters to take care of your property rather than feel like they have nothing to lose since they have insurance.
- Vet your renters. Rental companies will rent to anyone who can pay. You need to forego some rentals to save money in the long run with regards to wear and tear or damages. I vet my renters by asking them the ages of all the guests and turning away young groups in their 20's. I also turn away bachelor parties and the like. If you are on the fence after talking to a renter or the type of group then raise the damage deposit.
- Processing fees. Rental companies pocket another fee for profit, that's the processing fee. Usually $45-65 dollars and this is charged to all renters so don't feel bashful at also charging a processing fee. This is payment for you to manage their deposit and subsequent rental monies, sending of the contract, issuance of the keycode, setting up cleaning etc.
- Less Competition. When you are with a rental agency and relying on just their advertising, you are just one more thumbnail in a book of hundreds or on a website of hundreds.
Expected costs associated with self management
- Website - Free or $100 a year on average to upgrade to a paid site with no advertising
- Email - Free. I choose to use gmail.com for it's reliability, offsite storage and ease of use
- Paypal - Free. You can accept credit cards with no merchant account or you can also accept them for free through VRBO/HomeAway
- Reservation calendar - Free. VRBO/HomeAway provides a nice free calendar that can be embedded into your website.
- Alarm - $40/month - Not essential but recommended. Monitor burglary, fire, freezing temps
- Video - Free. Cameras I use allow you to view them on the internet/iPhone free
- Advertising - $75/month. This is a $350 VRBO.com account and $50/mo google adwords
Vacation Rental License Agreement
This is the contract between you and your vacation renter(s), very important to have it very detailed so there is no confusion on how the property is to be cared for. It should detail all the guests names, ages, dates of arrival and departure, rental monies due etc. It will need to detail the cancellation procedures, damage deposit refund expectations, departure instructions etc. If you have a swimming pool, you should have a totally separate swimming pool waiver that outlines rules and liabilities with it's use.
You definitely want to have keyless locks as passing keys back and forth to a renter can be quite problematic. A physical key can easily be duplicated and used at a later time by a past renter. Not to mention you will not be able to get the physical key to a last minute renter. Keyless access is the way to go and I have found the locks that embed the arrival and departure dates/times into the code are the best lock to use. I have used the locks that you just input codes but they hold a limited number of codes and you must remove the codes and input new codes often.
Ability to accept credit card payments
I have found that most vacation rental payments are paid by check as it's far in advance. Accepting credit cards isn't as difficult as you might think. You can easily use www.paypal.com to allow a renter to pay you via credit card (even if they don't have a paypal account) and sites such as vrbo.com and homeaway.com now offer the ability to accept credit card payments. Typically there is a 3% fee that you the landlord pay to accept payment via credit card which you can pass onto the renter when they choose to pay via credit card.
You must have local contacts in order to self manage unless you are within traveling distance of your property. Most vacation rentals have a hot tub and you will need that serviced after each rental. You will also need a cleaner who will clean your house after the rental. You need to get to know your cleaner and have them be your inspector as well. They will be your eyes at the property to verify whether or not anything is damaged. It is also helpful to have an emergency contact person who can visit the house if you need to get someone there. Preferably a handy man type person that could unclog a toilet if necessary etc.
Vacation Rental Guide
The vacation rental guide is the handbook to your home and the surrounding areas. It's the "book of knowledge" that the renters will be able to turn to when there is a question about your home and how to work it's internals. It will have instructions on how to start the gas fireplaces, relight the pilot light, operate the tv's etc. It's very helpful to include a list of phone numbers for area services such as plumbers, snow plowers, electricians etc.
Website and email address
A vacation rental needs a website to allow visitors to see your home's photos, amenities, availability calendars, rates and a way to contact you. You will need a dedicated email address for the rental so you can keep your personal email separate from your rental emails. The website also provides a way for a prospective renter to share your home and it's pictures with others in their group when trying to make a decision on where to stay.
You will need to get the word out about your rental property and although your website will provide one method of advertising, it's not enough. Vrbo.com or homeaway.com is a must have. I also recommend google adwords and if you have an active chamber of commerce in your area, you can check with them to see if they have rental guides and websites. Usually if there is a visitor's center in your vacation town then there will be a method of advertising with them.
Alarm System and Cameras
An alarm system is essential for peace of mind with your vacation rental. I have extensive experience with installation of a wireless cellular based system that can not be beat. It monitors for fire, carbon dioxide, burglary, freezing conditions, thermostat settings etc. I also like to install video cameras on the exterior of the house which provides you with a visual if someone were to case your house or try to vandalize it. It also allows you to make sure that your rental is not being used by party groups who may have not been up front about the number of guests they planned on having at the property. If you have a pool, it is advisable to have a camera trained on the pool for liability purposes.
If you are wondering which alarm company to go with, I recommend the cellular based as opposed to internet or phone line based systems.
Reservation Management Software
You will need to use some sort of management software to keep track of your vacancy and generate rental quotes. I created my own software that runs on a Windows PC that keeps track of the rental reservations for multiple properties and gives me the ability to select dates and generate a quote that I can then reply to rental inquiries with. I include this in my Services page. VRBO.com and Homeaway.com offer online tools that will manage the reservation calendar.