Vacation Rentals and the Sharing Economy

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After taking a reservation from a wonderful gal that we’ve become acquainted with over the past few years, I received the below email, which inspired this article.  Our staff met her as an owner’s guest during a couple of her visits to one of the properties we manage.  She called yesterday looking for a property to rent for her family next month during the Thanksgiving holiday and luckily we found her a spectacular property that met all her needs.

I have to tell you:  before I called Vacation Rentals of the Desert, I looked on line at VRBO … and I just felt uneasy about accepting at face value what the owner was saying.  I also realized that I was checking out properties a little late in the game.   

That said — I have friends who have rented through VRBO and have had tremendous success. 

I think the fact that I had spoken in the past to your company (from a friend’s unit that you manage, regarding a maintenance issue and also in regards to a neighbor having fallen in the unit next door and reporting that to 911 and to your agency) made me feel very comfortable in trusting your company’s sense of what might be the right thing for me to rent this fall!

Many, many thanks to you and Kathy!  As recommended in your email, I’ll be in touch closer to arrival regarding keys, etc.

 

Of course I responded to this email with our thanks and further explained to her that I too had been in her position last year and had similar feelings about dealing with owners I did not know.  I wrote about this in a blog titled “Girlfriend Retreat,” dated June 8, 2014.  Today I’ll share some of my mixed feelings on what is now being called the “sharing economy.”

Watching HGTV, which my followers know is one of my biggest addictions, I love the shows that demonstrate how it is affordable to own a second home if you take in a certain amount of vacation renters.  These are great shows and do a lot to build the industry but my only caution to those who have interest in buying with an absolute need to rent the property … “due diligence” is a must.  These shows do not take into account things such as year round utility costs including Wi-Fi and TV cable, property maintenance such as pool service, gardening and home repairs or upkeep of supplies and cleaning.  Nor do they include the costs of advertising, HOA fees, commercial liability insurance, warranty programs or an emergency fund in the event of a major issue such as a broken hot water heater or HVAC that interrupts rentals for a period of time.

If I owned a vacation rental, which I don’t, I can say for certain that I would handle the property myself, doll it up and pamper my guests.  It can be fun if you do it correctly … but it’s what I do every day.  I know the rules and regulations; I know the cleaning requirements and know what makes tenants happy and how to avoid upsets.  BUT I would manage it myself only if I lived close to the vacation rental … otherwise I would definitely look for assistance from a professional vacation rental management company.  Trusting a cleaning service, friends or family, is just too big of a risk and a responsibility that I would not put on someone I cared about.  Vacation rentals can be fun … but they are also very demanding and dealing with rental clients, neighbors and city ordinance regulations these days, can have you jumping through hoops day and night.

Returning to our client’s email above and her hesitancy to work with someone she did not know … I will share with you some of my experiences with property owners.  This year alone I turned down about five properties.  Owners inviting me to their vacation homes, wishing to list with Vacation Rentals of the Desert, but having substandard properties.  I really, really hate turning down a property and always try my best to convince these owners to take the necessary steps to bring their properties up to speed.  Sometimes it works, but more often than not … I get excuses why the property is fine how it is.  Here’s just a few …

I walk into a property with carpet at least thirty years old; stained and worn.  Foil wall paper on the walls and in the bathrooms, it’s even on the ceilings.  The living room sofa is 1970s plaid with Early American furniture.  Anyone old enough to remember spindly-leg Early American furniture?  The flowered bedspread in the master matches the flowered curtains that are faded from the sun.  I could go on, but I won’t … I’m sure you get it.  This property was too far gone and I had to explain to a really nice lady that our customers are looking for a more updated property.  She offered to purchase throw rugs to cover the carpet stains, but insisted the living room furniture was fine and she loved the flowered bedspread and claimed that it had been very expensive … yes, thirty years ago!   She told me that all of her friends and family who had stayed there, loved it.  Of course they would …. who would want to upset this really sweet lady.  Ultimately I had to walk away from this property wishing the owner, sincerely, the best of luck.

Another property that I viewed; the owner lived full time at the property but would move in with a friend when it is rented.  He would need to lock one of the three bedrooms and the garage, for his personal possessions and insisted on doing all of the cleaning, before and after guests.  The place is very dirty but he insisted that he was an excellent cleaner.  I explained that maybe the locked garage would be okay but not the locked bedroom.  Tenants are spooked by a locked room … closet okay, room no.  Also I told him that we needed to use our cleaners due to sanitation requirements and guarantees.  When he would not agree to these requirements, we parted ways with a handshake.

On another occasion I received a call from an owner describing her property as totally updated and she was certain we could ask for top dollar.  Upon walking up to the property, I could see that the bedroom window coverings were mini-blinds … some bent … oh no!  But she’s was absolutely correct … it was completely updated … in the 80s!  Mauve carpet, mini-blinds, 1980’s pastel southwest furniture, 1980s appliances.  She explained that she has been renting it herself but was tired of getting complaints from tenants all the time.  I looked at her website listing and she had described her property as “completely updated throughout.”  It’s not a wonder that her tenants were unhappy.  It was clearly misrepresented.  I passed.

The dated property scenario happens over and over again, almost as much as the “completely updated” story.  Many owners do not realize how competitive the vacation rental market has become.  For every dated property, there are ten updated properties with all the new bells and whistles.  When vacation rental owners say that their friends and relatives love the property, and they all say this … I think, but can’t point out the obvious … how many friends tell you that your butt looks big in that dress or you walk funny? They don’t want to cause hurt feelings, or risk not being invited back.  People are very tolerant of shortcomings when they’re staying free or at the cost of a cleaning.

There is also the “eye of the beholder” to take into consideration.  I wrote about this in an earlier blog post titled “Hopelessly Stuck in the 80s!,” posted January 12, 2014.  Many owners who purchased and decorated their vacation homes years ago, view the property through very different eyes than you and I.  Their homes are filled with memories and they do not see any of the shortcomings, only the property that they love.

There was a time, when tenants were happy to find any home available for their vacation, but that was some years ago.  Now, with the vacation rental boom and the variety of properties readily available, an updated, well maintained property is extremely important.  As recently as a couple of years ago, I would take on dated properties, pricing them accordingly, with the thought that there is a price point for every tenant.  I have found since then that dated properties are a lose/lose situation.  Despite informing tenants before they book, that the rental rate is low because it is a bit of an “ugly duckling,” dated but well maintained and squeaky clean … we will still get complaints.  Often it doesn’t matter how much you clean … “old” just looks dirty.    On the other hand, the property owners will inevitably know a neighbor who is making more money on their property of the same size and not taking into consideration the dated condition of their property, ask us why they are listed at a lower rate.  So I no longer take dated properties.  Sometimes the juice is just not worth the squeeze!

If you are a vacation rental owner, and I have said this many, many times … drag a stranger, your friend’s acquaintance, a property manager, over to your vacation property and ask for an “honest assessment.”  DO NOT ask a friend.  DO NOT ask a relative.  A friend or relative will NOT give you an honest answer.  They will not risk hurting your feelings.  If your furniture, beds or décor are twenty years old … your prospective tenants will see this and your vacation rental business will suffer.  If they do rent … you will get complaints and the tenant reviews on your website will be bad and discourage future business.

There are very, very few properties that can pull off a dated look.  The properties that can are mid-century modern and maybe some vintage, antique filled Victorians.  1970s, 1980s and 1990’s era furniture are not desirable at all.  If you are doing mid-century modern you should be careful about how much original furnishings you are adding to the home.  A few vintage pieces here and there, some art, lamps, etc. are usually okay … but not the entire house.  I have seen it … it never works.  It looks old and shabby.  You will want your beds and living room furniture to be new.  Remember that the vintage pieces you buy are over fifty years old and may break.  One of the properties we manage has a very expensive Eames chair.  I have grown to hate this beautiful chair.  Twice it has broken.  Once with a tenant sitting in it.  The breaks were not due to misuse, it came from fifty to sixty years of butts in and butts out.  Excessive wear and tear.  A reproduction would have been equally attractive, less expensive and safer.

A clean property is THE number one priority.  It doesn’t matter how much you’ve spent on dolling your property up … if it’s dirty … that’s all the tenants will see.  One dead bug laying in the entry of an otherwise spotless home, can upset tenants to the point that they think the home is insect infested and want a full refund.  You must make sure that the home was been well cleaned and sanitized, and that someone checks the property just prior to your tenant’s arrival.  You will also want to make sure that you immediately address any cleaning issues that a tenant may report … I stress immediately!  Likewise for maintenance issues and repairs.  If your property is listed on a website than your tenants have “The Power of the Review,” another recent blog post for you to read, dated August 30. 2015.  With the review, tenants have the power to make or break your vacation rental’s success.

I have done many inspections after an owner has said that they would have the property cleaned for an upcoming vacation rental, only to find that the toilets were dirty and the sheets needed to be washed … hair on the pillows and the corners of the sheets popped off the mattress, don’t lie.  I have a computer file filled with these photos where I’ve documented the issues and then had to rush our cleaners in to do a proper job before the tenants arrived.

If you are a prospective renter and have read this far … you probably get the message.  Most people who list on VRBO are wonderful owners, I won’t get into Airbnb, but there are the few vacation rental owners who are only concerned about their bottom line.  I understand the appeal of the “sharing economy,” and applaud all the conscientious vacation rental owners, but seeing what happens from our view inside the professional industry … I’m waiting for the “other shoe to drop.”  I would not advertise that I make the best lasagna in town, which I do, and open my front door to paying clients nor would I cross into Mexico to get a less expensive facelift.  There are some situations where the risks are too high … I’m not a lucky gambler.  I often wonder how there can be so many people who are willing to risk their vacation money … but again, I’m not a gambler.  I’m very happy to pay a little more through a vacation management company for my peace of mind, knowing that I will have certain guarantees and that the company has a valuable reputation to protect as well as a full team of professionals with one main objective … to make me happy.

Photo:  http://whitehousecleaning4u.com/

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