Discrimination In Vacation Rentals?

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A study by three Harvard researchers found “widespread discrimination” against people with black-sounding names on Airbnb. Credit Matthew Millman for The New York Times

 

Discrimination by Airbnb Hosts Is Widespread, Report Says

DEC. 11, 2015

Airbnb likes to refer to itself as less a company than a “community.” To that end, it has made trust between real people a cornerstone of its business strategy in short-term home rentals.

But new research suggests that when users get real, racism can result.

A working paper by three Harvard researchers found “widespread discrimination” by hosts against people with black-sounding names seeking rentals. Fictional guests set up by the researchers with names like Lakisha or Rasheed were roughly 16 percent less likely to be accepted than identical guests with names like Brent or Kristen.

“Clearly, the manager of a Holiday Inn cannot examine names of potential guests and reject them based on race,” the authors wrote. “Yet, this is commonplace on Airbnb.”

Airbnb, valued by investors at roughly $24 billion and based in San Francisco, said in a statement that it was “committed to making Airbnb one of the most open, trusted, diverse, transparent communities in the world.”

Last July, the researchers sent housing requests to roughly 6,400 hosts across five cities: Baltimore, Dallas, Los Angeles, St. Louis, and Washington. Renters with names that sounded African-American got a positive reply about 42 percent of the time, compared with roughly 50 percent for white guests.

The results “are remarkably persistent,” the researchers wrote, with whites discriminating against blacks, blacks discriminating against blacks, and both male and female users displaying bias.

The authors suggested the solution is simple: Don’t require users to reveal their names.

With more than two million listings across 190 countries, Airbnb has robust data on the reliability of its hosts and guests, from verified profiles to reviews of fellow users. Benjamin G. Edelman, an associate professor at the Harvard Business School and one of the paper’s authors, argued that those metrics are what should count when evaluating whether to go ahead with a transaction.

“Compare that with whether the guest’s name is Barack or the guest’s name is Bono,” Mr. Edelman said.

“At some point you say, ‘You know maybe it’s nice to see people’s names and faces, but gee, think about the harm that this causes for some people.’”

Airbnb, a standard-bearer of the so-called sharing economy, has argued forcefully that anonymity is incompatible with building trust between users. The anxiety attached to letting a stranger into your home, the argument goes, is lessened by a name and friendly face.

“Access is built on trust, and trust is built on transparency. When you remove anonymity, it brings out the best in people,” Brian Chesky, chief executive of Airbnb, said in 2013. “We believe anonymity has no place in the future of Airbnb or the sharing economy.”

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T.O.T. – ALL Vacation Rental Owners Need to Know

335ed1_d276eede1f154ae4ba391f6d2511658bThis week the property owners and management companies who have vacation rental permits in the city of Rancho Mirage were sent an email regarding T.O.T. (transient occupancy tax).  Besides the deadlines for tax submission, the email also reminded owners of the consequences of tax fraud which some owners may not realize they are doing right now.

Long term vacation rentals are generally understood to be rentals of one month or longer.  There may be variances in each city’s definition of the length of these rentals; for some cities it is twenty-eight nights, some thirty and others thirty-one.  You should know that booking a reservation for a one month stay to avoid T.O.T. or to satisfy your HOA (home owners association) rules on length of renter stays, is consider fraud and a felony.  In other words, if you receive an inquiry for a week, three nights, or even one night short of the minimum nights required by your city as a long term rental, and you are audited, you could be charged with fraud.  Depending on the views of your city’s officials on vacation rentals, there could be fines or more serious consequences.

This is widely practiced, but in owner’s defense … it is usually not aimed at saving the tenants the cost of tax, but more to accommodate the owner’s need or desire to only take long term, or monthly rentals.  Most cities do not require a vacation rental permit for properties that solely take long term rentals, but all should know, whether permitted or not … renting your property for one month to tenants staying less than what the city considers a long term stay, could come back to haunt you.

Cities have full rights to the names and contact information on each and every one of your tenants.  If you are audited, as more and more cities are now doing, you could be charged with fraud and a felony.  Likewise, a tenant could be charged with the same if they book your property as a long term with the intent of avoiding T.O.T.

Picture:  http://www.thetamarine.net/#!audits/c1n2c

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How Vacation Rental Owners and Tenants Relate

Bad-Hotel-Sundance-Vacations-300x189 (1)Finding topics for this blog each week can sometimes be challenging.  My goal has always been to inform, educate and sometime entertain vacation property owners and vacation renters.  Of course the content is often commentary and almost always is swayed by my personal experiences and opinions.  I attempt to put my readers into my shoes and hopefully give them a basis to form their own opinions surrounding their individual circumstances.  The fundamentals of owning or renting a vacation home are the same worldwide with the standard expectations of owners providing a clean, well maintained, honestly represented property at a fair price, and who are caring, easy to contact and take responsibility for issues that may arise; and in turn, owners expect well behaved, clean tenants who will also be respectful of their property and considerate of neighbors.  Sounds very simple, but with vacation rentals, and pointedly … vacation rentals managed by owners, you are working in an environment without any set rules or standards.   A hotel has industry and company standards that a paying guest can pretty much count on.  Now, in the sharing economy, you have individual property owners making up their own standards … and rules.  Taking into account how very different an owner may see their property, as I mentioned in last week’s post, where a property was advertised as “totally updated,” when in reality the last updates were made twenty years ago.  Many owners live a distance from their vacation home and rely on cleaning services which may at times be questionable, especially on a property where they know that it will not be inspected.  On the other hand, an owner may find more fault with the unhappy tenants than the cleaners, when cleaning deficiencies are reported.  I am not saying that all vacation homes that you find on VRBO or owner listing sites are bad … in fact the vast majority are excellent … I merely attempt to point out the variation in people, personality and their individual standards … and with the lack of oversight, the fact is …. there are some “bad actors” out there.

Today this blog is filled with commentary and personal opinion … but the commentary is based on facts that I have noted over the past twenty years and in this post, experiences of this past week.  Early in the week we received a call and then a visit, from a couple from England.  Their story was one we have heard countless times.  They arrived at a condo that they had booked through a listing on VRBO.  They were disappointed upon their arrival to find that the condo that was dirty.  After sitting unoccupied for several months, which is typical during our hot summers, the condo was dusty, dirty and full of dead bugs and cobwebs … just in time for Halloween … but they weren’t in the holiday spirt and I can’t say that I would be either.  The entire condo had just one window and that window had a broken blind that they had to climb up on a chair to open.  The bed was so bad that the husband, with a bad back, slept in the living room chair.  The towels were old, stained and frayed.  The one TV was of the old fashioned variety and not only was their lines through the picture, but the screen was so distorted that it cut off the actors heads.  But the biggest problem was that the property was advertised to have a walk-in shower, and what they found was a standard bathtub/shower combination.  This was a huge issue since the husband, with the bad back, is not able to raise his legs high enough to get into a bathtub.  After calls to the owner with no help on cleaning, which they did themselves, towels, which they replaced themselves, broken blind, which they just left open, old bed, broken TV … the very last straw was when they walked into the condo after a trip to the store, to find that the owner had entered without their knowledge or approval, turned the air conditioning up to 78 degrees and left a very nasty note stating that they were not to touch the temperature on the thermostat or he would deduct an additional $200 from their security deposit to cover possible cooling charges.   After finding this note, they called our office.  We were able to find them a perfect condo, the Taj Mahal compared to their current rental, and finally after arriving in the U.S. a week ago, they were able to start enjoying what was left of their one month vacation.  They received no money back from the slum-lord they had rented from, but refused to let it ruin their vacation.

Now I am fully aware that there are two sides to a story … probably more aware than you.  I see this behavior all the time and find ourselves smack-dab between owners and renters and rarely do the two see eye to eye.  However in light of the details shared by our British couple, and the fact that I have met many, many “bad actors,” I tend to give the benefit of the doubt to the tenant.  The bed could possibly be a matter of personal preference, the TV could just have the wrong screen setting … but an owner refusing to clean prior to a tenant arrival, repair a broken blind, replace old towels … and illegally enter a property without twenty-four hour notice … these are unforgivable, and makes me angry as it reflects on the entire vacation rental industry.  If this story is in fact true then it’s my hope that the owner’s bad actions will someday catch up with him … “what goes around comes around,” fingers crossed.  This, in my option is despicable behavior … and I see it constantly!  Other than a bad review, there is very little that a tenant can do.

There are also many challenges for owners.  A tenant may over occupy or abuse a property costing owners in repairs, replacements and in some cases, having to turn away potential or booked tenants to make the repairs.  Tenants may break city noise ordinances and cost owners significant fines or in extreme cases, the loss of their right to rent their property.  Owners who live a distance away face the problem of finding reliable cleaners and maintenance people.  Many will look for a management company such as Vacation Rentals of the Desert, but for some, there will be the overriding desire to avoid professional management fees.  With the growth of the vacation rental industry, we are seeing start-up companies pop out of the woodwork … seems everyone has “the next best money-making idea.”  Yesterday I received a call from a local owner who had signed up with one of these “innovative” new companies.  I won’t name the company, but I’ll tell you enough to recognize them if they call.  This company is located out of state, but offers to represent and manage properties worldwide.  Their management fee is 35% and they find local individuals to check properties and arrange cleaning.  Sounds reasonable on paper … but again there is a lack of oversight, and that is precisely the issues this home owner discussed with me.  He had a handful of rentals over the summer months (surprisingly), but upon his recent visit to the house he found that there was significant damage to the property that had not been noted nor compensated for before tenant deposits were returned.  The air conditioner had not been shut off between a couple of the renters and with temps over 100 degrees, this is a big issue.  In addition, small things like burned out lights and regular maintenance repairs had not been dealt with.  But what really sent this owner over the top, justifiably,  was that his garage door remote was missing, the battery removed from the garage door key pad, the motion detectors outside the garage door disabled, and his golf cart entirely stripped, batteries, wiring, etc. and an expensive set of golf clubs had been taken from a locked closet in the garage.  None of this was found or reported by the local manager or cleaning staff.  The owner found this upon his visit.  The police believe it is an inside job.   So … looks like we are going to be managing a new property.

These are just a couple of examples of what happens all the time … and it goes back to last week’s post on the sharing economy … people are people are people.  You just don’t know who’s on the other end of that phone or email.  As I said at the beginning of this post, sometimes this blog is more commentary …. sometimes I just share my personal experiences …  and sometimes I vent … so here I go.

The above owner with the broken TV, blinds, etc.  … maybe he’s not a slum-lord.  Maybe he honestly thinks that the property is wonderful.  What if the tenant called to complain and was confrontational and disrespectful and the owner took offense and decided not to lift a finger to make his tenant happy?  It’s not right … but it’s very human and happens every day.  This week we called an owner letting her know that the vacuum was broken and we needed to replace it.  She was offended and upset (I know, we scratched our heads about how she could have taken offence), but she finally agreed to replace it.  Side story … she thought she would save money by ordering the $90 vacuum from Target … but in the long run she paid more since we had to charge her to go way out of the way to pick it up (she ordered it for picked up from a store outside our city), then we had to bring it to the office to assemble and finally deliver it to the property.  Had she let us do this we could have bought the same vacuum from Bed, Bath and Beyond, two blocks from our office, used a 20% off coupon and with that 20% savings, paid our office for the assembly and delivery!  Another owner, several years ago, visited her property and discovered that the tenants had burned up her favorite spaghetti pot.  She wanted to cancel her vacation rental listing entirely, despite the $20,000 gross rental that she had generated over the season, and the fact that accidents happen.  She stated that the tenants “did not respect her belongings.”   I immediately went out and purchased a new $25 spaghetti pot, delivered it and the property remained on our rental program for several years.  Sometimes it’s just that one “button,” that one “final straw” that set people off.   Same for tenants … people will vent.  Unfortunately I had to call a future tenant this week and report the sad news that the property they had booked, was going through some “issues.”  Seems that at this particular country club the golf course is not owned by the country club or home owners, but owned by another party.  The golf course was sold, and when the new owner was told by the city that they could not replace the golf course with senior housing, they decided to just close the club house and let the golf course die!  Unbelievable!  Of course the home owners are up in arms.  Their property values have plummeted and most owners purchased within the country club because of the golf course.  Every single property looks out on a fairway … so this affects 100% of the home owners and this high end country club is “not so much” anymore.  So I felt I had better contact our tenants to inform them of the situation since it would have definite effects on their extended vacation.  The fact that it is now in the hands of the legal system, the future of the club is unforeseeable.  With all our properties booked during their dates, my offer of a full refund or significant discount, was countered by ugly accusations and a very, very unhappy client.  Totally expected, but what was I to do in this case?  It is never known how people will act or how people will treat each other on any given occasion.   So back to the couple above, who now have to decide what to do about their vacation … look out onto a dead golf course or move?   The wife insisted that one of the primary reasons she chose this property was to be able to play golf at that particular course and to sit and look out on a beautiful fairway with a gorgeous waterfall (no longer functioning, of course).  Once I calmed her, I told her that she should check with other vacation rental companies … not owner listed properties which would be more time consuming.  Many owner’s do not keep up their property calendars and a renter could spend days waiting for a response only to discover that the property is not available.  I advised she do a google search for local vacation rental companies, and call a reservationist who would have possibly hundreds of potential properties to offer.  This close to season, chances are that most of the properties will already be booked … but they may still have a few.  This would be her quickest and safest way to go.

Vacation Rentals of the Desert is a pretty old fashion kind of company.  Certainly we have all the new bells and whistles … state of the art website and software, massive advertising budget, including VRBO and FlipKey, (can’t do Airbnb … one day I’ll explain the various reasons why this is a bad idea), fully trained and professional staff, checks, balances and standards of practice.  These are essential to running a successful vacation rental company … but the one thing that makes us stand out is the way we handle business … clients, tenants, owners and their properties.  This is where “old fashion” comes in, and we live by these rules every day …

                The customer is number one

                Do unto others as you would have them do unto you

                Treat everyone with respect

                Treat properties as if they were our own home

                Listen and give everyone the benefit of the doubt before making a decision

                It’s not always about the bottom line

                Honesty in all cases

For some owners and some companies … it is only about the bottom line.  We’re very fortunate … our properties are not investment properties …  they are second homes.  So if we feel the tenant would be a bad fit, we look for someone more fitting.  If we have a past history with a “questionable” tenant, we pass.  This is why we do not handle Coachella and Stagecoach Fests rentals.  Granted … the vast majority of fest goers will cause no problem, but about 10% will be a problem in one form or another … and we cannot gamble with our owner’s properties or our reputation.  Here’s a good example:  Last year we had a group of friends staying at a property during Coachella.  They informed us that they were in their 50s and had no intention of attending the fest.  The second night of the fest the tenants were on their back patio at 2 a.m. talking and the neighbors called the police.  Next day we received a $500 fine with a picture of the Coachella Fest bus in front of the house loading up our renters earlier in the day.  The age and profession does not matter … after partying all day, reason quickly flies out the window.  Now this property owner stands to suffer stiffer fines in the future and possibly lose his vacation rental permit because of tenant behavior … and it may not even be the tenant we screend.  It could be an unruly friend that gets out of hand or someone that they met at the fest who had no place to stay.  Bottom line is that even if the security deposit is raised to cover possible ordinance fines, my owner is one citation closer to losing the ability to accept vacation rentals.  Ultimately was the money worth the citation not to mention the extra oversight of future tenants?  Next fine is $1,000 … you better believe I’m hovering … and is this fair to our “good renters?”  I’ve been told by another management company owner that you just have to know how to screen properly!  How do you screen people today, for their behavior after partying a full day or two in the future?  There is no way.  I hate like heck to lose the rental money during these fests, but as I mentioned … the properties that we handle are second homes and my owner clients are wary of damage, fines and possible animosity from their neighbors making their own visits uncomfortable.  Sometimes the juice is just not worth the squeeze.

On my drive home from the office last night I was listening to a discussion on NPR Radio.  They were talking about Volkswagen and how they’ve lost the public’s trust.  One of the fellows in the discussion was from a large advertising firm and when asked his opinion on regaining public trust he said he thought the company was “screwed.”  He suggested an ad campaign showing the VW board members being fired and a big explosion.  Pretty drastic … but this is how important trust is to a company.  A trusted reputation is a necessity for survival in the business world … now look at how much it’s going to cost Volkswagen, and all the money they spend may not change the public’s mind.  Further in the conversation they talked about the Volkswagen Bug’s initial ad campaign … back in the 60s, I believe.  Back in those days all the cars were big, long boats.  In those days of cheap gas, bigger was better and these big cars represented success and prestige.  Then here comes the little VW Bug.  The advertising campaign was simple, but brilliant … and it worked!  In magazines they ran a blank white page and in the very bottom corner was a photo of a VW Bug with the caption, Think Small.

Simple but brilliant.  Reflecting on how our company of 130 properties competes in the big sea of VRBO, Airbnb, and large impersonal cookie cutter vacation rental companies … if we were a big national company … I think our ad might look like this:  A blank white page with our Vacation Rentals of the Desert logo in the bottom corner.  The caption would simply say … A small company, striving to be the Very Best.

Photo:  https://sundancevacationsblog.com

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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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Any Rental Will Do

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On-line bookings comes with certain risks. Be smart, ask questions before booking rentals into your vacation home.

 

The vacation rental industry has certainly changed … especially in the past few years.  I’m sure this is true everywhere but here in the desert it went from then, to now … almost overnight.

Back in the 80s I managed the vacation rental side of a small, successful real estate company that specialized in two country clubs; one in Rancho Mirage, the other in Palm Desert.  Back then, vacation rental properties were scarce and not well known.   Prospective tenants paid a deposit and were put on a list based on three choices; the preferred country club, a two or three bedroom condo and an A, B or C (C being “luxury”), price point.  The booking process went like this … during the summer we would gather the reservation requests.  A seasonal calendar was mailed to the property owners with a request for them to mark any “owner use” dates and return the calendar by the end of September.  Once we received the marked calendars and the dates recorded, we (usually I), would go into a private conference room, and for several days, work reservations into the properties one by one … like fitting pieces into a puzzle.  The goal was to fit in as many requests as possible, based on the tenants three choices, with a minimum of unoccupied time between reservations.  The property calendars we used looked much like accounting ledgers and were computer printed on dot-matrix sheets that were as much as ten feet in length in order to accommodate all the months of our rental season.   When working with sixty to seventy properties and about two hundred requests of varying requirements, you can just imagine what a long process this was.

Also remember that back in the 80s, computers were not in most homes.  We used a computerized reservation system, but the entire booking process was done over the phone and through the mail.  There were no websites to look at pictures and if a client wanted to see photos of a property, we had to mail them actual 3X5 photos and request that they return the pictures.  It was not until the early 2000s that websites and property listings started to appear, after personal home computers became common.

So … this long description of what vacation rentals were like leads me to the simple point of today’s post:  once upon a time, tenants were simply happy find any available property!  Vacation rentals were just not plentiful.

This is no longer true.  Since the late 90s the industry has grown and after 2008 it has doubled, then quadrupled, and then again and again.  What used to be an “owner’s market” is now definitely swung in the opposite direction.  In my view, there are three major contributors that have driven the growth and changes in the vacation rental industry over the past fifteen to twenty years … turning the industry into a “renters” market.

  • The computer
  • An abundance of vacation rental properties
  • The owner managed vacation rental

The computer has taken vacation rentals global.  Once, vacation rental companies had to identify their potential “key” markets and pay for newspaper advertising … at best this was a costly, hit or miss proposition in light their potential world-wide cliental.  Now, companies vie for position in search engines and among ever growing competition.   There are a great number of start-up companies that promise more rental income and lower management rates but at the trade-off of poor property and occupant oversight and property damage.  Most of these start-up “tech” companies are located far from the area, promote on-line booking and rely on cleaning services as their eyes and ears.   As owner of Vacation Rentals of the Desert, a traditional vacation rental management company, it is hard for me to watch these companies gain ground, but as they grow, so does my business.   It doesn’t take home owners long to discover the importance of local, responsible oversight and management and personal tenant screening.  We hear a lot of horror stories.

Side Story:  Just yesterday we received a call from a prospective tenant inquiring about a private home with a pool.  He wanted to pay $500 for just one night so he and his friends could throw a 21st birthday party.  Would a directly an on-line booking have caught this one?  It’s doubtful.  I have personally seen the results of these kinds of parties … heck, years ago, I went to these kinds of parties.  $500 might not even touch the clean-up and repairs, much less the fines for over-occupancy without an “event permit.”  Did you know that many cities require a permit for parties at vacation rental properties and that significant fines can be levied and/or the loss of rental privileges can come as the result of not having the correct permits?  Check your local city ordinance.

As recently as five-ten years ago, when talking to property owners interested in listing their “dated” vacation home, I would explain that there was a price point for all tenants.  If the property was nice, neat, clean and provided all basic amenities, it would appeal to those with a limited budget.  This is no longer true, which I will explain further below under owner managed vacation rentals.   If a property is dated, it will most likely be passed up unless it is the very last possibility … in which case the tenant will complain during their entire stay.

The abundance of vacation rental properties has come as the result of several factors but most significantly from the recession starting in 2008.  In our area, as in many “desirable” locations throughout the United States, there are many second homes that were used only by the owners and their immediate family.  In the midst of the recession, many owners struggled to keep their second home and since the bottom had dropped completely out of sales, vacation rentals became a logical solution and a means to off-set some of their carrying costs.  Here in the desert, the number of vacation rental homes grew rapidly.  Fortunately many of our tenants were Canadian which did not get hit as heavily by the recession.  So the “rental” side, despite our economy, still brought in a brisk business.  With property values at rock-bottom and the Canadian dollar high, it was not long before our northern neighbors started buying homes and using the vacation rental income to off-set some a good chunk of the expenses supporting an out-of-country property.    I cannot tell you how many tenants we lost when they bought their own vacation home … but our inventory grew as these very same tenants listed their newly purchased homes on our rental program.  There were also “investors” who came in, flipped run-down properties and listed them as vacation rentals.   In addition, industrious couples of all ages, purchased properties in hopes of enjoying and self-managing the home as a vacation rental.  All the above were lucrative investments and all helped to grow the local vacation rental industry, but as the number of properties expanded, competition grew and “the bar” was set higher.

 When you’re the only restaurant in town, your tables are always full … add fifty more restaurants and your chef had better be amazing!

The owner managed vacation rental market grew with the above … wide-spread computer access and taking advantage of depressed home sales.  VRBO (Vacation Rentals by Owners) launched twenty years ago in 1995, but it was not until the early 2000’s that vacation management companies and the general public, started to take notice.  The U.S. recession had a major influence in growing this VRBO and many on-line listing sites such as FlipKey, soon followed.  With one annual fee, a home owner could list and manage their property locally or from a distance.  This had two great owner appeals … one, it eliminated the management fee from a professional vacation rental company and two, certain owners were attracted to the hands-on interaction and pampering of their tenants … it was looked at as a fun second or retirement job … kind of like managing a bed and breakfast.  But the unfortunate truth about owner managed properties are that they generally have a negative impact on the local vacation rental industry and this fact is almost completely unknown by the owners doing the damage.  It comes in various forms but an example would be a home owner that lists his property as “for sale by owner,” then prices it way below the neighborhood comps.  Inexperienced new property owners who do not know the vacation rental market may in the long run do themselves and the surrounding vacation rental properties, a disservice by underpricing their vacation rental and causing a “race to the bottom.”  Professional management companies look at area “comps,” and even though they do not typically get together to set rental rates, they do look at market norms and head typically in the “up” direction instead of driving rates down.  Over the past few years, I have rates between owner managed and professionally managed properties, run all over the place with ridiculous variances.  A perfect and true example is a three bedroom, completely updated, newly furnished, perfectly located property that I would have listed at $4,800 per month, the owner was renting at $2,500 per month.  Lucky tenant … but now it makes it more difficult for my $4,800 property and all the other properties listed at “market” price, to compete.  Bottom line is that this owner is potentially driving the market down instead of in the other direction.  Now this may not have as much of an impact in some areas, but in a highly sought after country club that tenants seek out year after year, go with friends, associate and meet at the pools, dinners, etc. … this has a huge impact.  Those tenants who have rented directly from owners will slam their phones down in our ears, when we quote them our rates.

There has also been a huge fall-out from owner management rentals who usually are run by absentee owners who are entirely focused on their bottom line and not on the behavior of their tenants or “justifiable” complaints from their neighbors.  These are the owners that disregard the city ordinance regulations and rent their properties as party homes or a two bedroom condo to eight people.  These “problem” properties fall into the “one bad apple” scenario.  This is one of the major contributing factors to stiff city ordinances, negative press on vacation rentals and the disgruntled and very vocal neighbors that show up at every city council meeting.  It has added to owners hesitating to rent out their properties and renters hesitating to stay in particular areas.  Ultimately it reflects on all vacation rentals, whether owner managed or professionally managed and hopefully will not end in the demise of the entire industry.

So … things have changed a lot and I guess that’s a good thing.  We all have to make adjustments to these changes as they arise.  Bottom line is this … tenants no longer are happy to with just anything available.  They want the best, with all the bells and whistles and at the best price.  There is a lot of competition out there and if you are not willing to provide “the best,” someone else will.  If you think about it … isn’t that exactly what you look for in any purchase you make?

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Got Your Panties in a Bunch Over Vacation Rentals?

NeighborMrsKravitzWhy is everyone so angry?

I found the following posted on Facebook by 95.5 the Rock, radio station, April 19th.  I have copied it word for word.  Click on the picture to go directly to the Facebook post or read below.

Screenshot_2015-06-29-18-57-37_resizedThis was in a mailbox in Arizona…how would you respond to something like this?

Dear “Neighbor”

You just moved into this neighborhood a year ago, and I wanted to give you time to correct this problem on your own, but you are apparently too inconsiderate to do so.  Every day this week, when weather has been nice and windows are open, you proceed to let your small child run free in your backyard and laugh and giggle and carry on without end.  This is very disruptive for my two dogs and my bird who sits next to the window and like to look into your yard.  Perhaps you could ask him to tone it down a bit, or at least limit his outside time to 15 – 20 mins a day so my dogs can be outside without seeing him running around.  If this kind of behavior persists, I WILL CALL THE POLICE!

Really???  I don’t remember there being so much anger twenty or thirty years ago … or is that just me?  I’ve been accused of wearing rose colored glasses a time or two.  But I remember a time when people were not so sensitive; when children’s laughter was a good thing, when live and let live prevailed.  If year-round neighbors cannot get along, there “isn’t a hope in hell” that vacation home owners can expect to get along with year-round neighbors.  This letter burns me up on so many levels, but it is a typical example of the nonsense complaints I hear from year-round neighbors.

Here are a few complaints that I’ve received …

A local resident called me to complain that the tenants in the vacation rental home next to his house let loose about six helium balloons … just let them fly off into the sky.  I told him that this was not a violation or against the law.  His response was that people do not behave like that in his neighborhood.  Turns out this tenant had rented the house to celebrate a sixth wedding anniversary and the six balloons released by their children represented six decades of marriage and a wish for many more years to come.  But people don’t behave that way in this neighborhood.  Shame on these tenants!

The next city over at another vacation rental property, the neighboring resident called to explain that two teens were throwing a football in the middle of the street.  The property is located on a quiet cul-de-sac and when I asked whether the teens were blocking traffic or being disrespectful in some way, the resident told me no, but he did not think it was appropriate behavior and once again I heard that people do not behave that way in his neighborhood.  I for one grew up throwing a football in the middle of the street and can think of about a million things I would not want to see a teen do … but throwing a football in the middle of the street is not one of them.  Shame on these teens!

originalI’ve received dozens of calls, days and night, reporting open garage doors and trash bins set by the curb on the wrong day.  These kind of calls are typically relayed with such over-the-top anger that it would humorous if the caller wasn’t so serious.  Really … an open garage door is cause for such agony?  I just don’t get it.  I live in a nice neighborhood and I see this kind of thing every single day and never would I think of complaining or reacting as if I was in fear for my life.  But if it’s a vacation rental … that is an entirely different story.

It’s just a small presentage of residents but they make a lot of noise … the vocal minority.  But why all the anger and hostility?

Why?  Sometimes we get legitimate complaints which should be reported.   Unless you live in the country with acres around your home, chances are, you’re going to have a “bad” neighbor at some time or another.  Unfortunately we can’t choose our neighbors.  There just isn’t any kind of interview process where you can “test drive” the neighborhood for compatibility prior to purchasing a home.  Sometimes you get a great friend; sometimes you get Mrs. Kravitz!  At least with a vacationing tenant, if you get a bad one, they’ll be out shortly … and most likely not return.  It doesn’t work that way with a year round renter or owner.  There have been many times in my life where I would have been greatful for a vacation renter rather than the person that lived on the other side of my back yard fence.  I’ve moved a lot and experienced way too many Mrs. Kravitz types.

Why?  Many neighbors are angry because they think that the owner of the vacation rental property is making a fortune.  I hear this a lot at HOA and City Council Meetings.  The neighbor finds the property listed on the internet, or “knows someone” who tells them how much they saw the property listed at per night.  They always take the nightly rate and multiply it by 365 nights!  Oh don’t we all just wish!!  Here in the desert we are lucky to get four months cumulative in rental bookings.  There are many factors that these residents are not considering.  A nightly rate is the highest cost … the longer the property is rented, the lower the rate.  Example:  $450 per night for 365 nights … $164,250.  I can assure you that that is just not happening.  More like two nights at $450 so that is $900 for the weekend, two to three weeks out of the month if they are lucky.  During season that same property rents for $6,000 per month … but like I’ve explained … it will not rent at $6,000 per month for twelve months.  Still the owner is lucky to get four months of bookings with a combination of nightly, weekly and monthly renters.  For a property that rents at $450 per night/$6,000 per month … it’s probably a property valued in the $400,000 to $600,000 range.  Now think of the carry costs.  Mortgage payment on a $600,00 home plus utilities including full cable, Wi-Fi and phones, electric, gas, water, trash, twice weekly pool service and once weekly gardening if it’s a home, HOA fees if it’s in a country club, cleaning, upkeep, etc.  Bottom line … owners are not making a living from their vacation rental home.  Chances are that the home is an investment towards their retirement waiting till the day they can move into the property.   Or it may be a vacation home that they use on and off throughout the year and they do vacation rentals to offset some of the costs of owning a vacation property.  Here in the desert … vacation rental homes are not huge money makers … our “season” is simply too short.  So why are the neighboring residents so angry at the thought of the owner making money?  Jealousy … I don’t think as much as … why should they make money and I have to put up with the bad behavior.  Like putting the trash bins out on the wrong day or hearing kids splash around in a pool that is not typically used … bad neighbor!

Why?  I have actually spoken to several residents who have no complaints about the tenants and in fact have made friends with many vacationers.  When I asked one particular resident why she stood with the group that did not like vacation rentals, she told me that her “neighbors” don’t like them and she was only trying to be supportive and not oppose these friends that she lives with year-round.  It’s what everyone says in the neighborhood, she told me.  When I pointed out that she rented properties from Vacation Rentals of the Desert each year around Thanksgiving for family overflow, and asked what she would do if a ban on short rentals was mandated she responded; I will just rent directly through a home owner and the HOA and city won’t know.  This is an inevitable truth … if short rentals are banned, owners will go underground and rent out their properties anyway.    A ban will not eliminate short term rentals … and these rentals will have no accountability, no regulation, no oversight, will not pay the transient occupancy tax to the city and are extremely difficult for authorities to prove, charge and stop.  I’ll give you an example of the “friendship effect” at yet another of the properties I manage.  Two neighbors approached me a couple of years ago and expressed great anger (hostility really), at the owner renting the property.  I will also note that the new owner remodeled the entire property and the home went from a run-down house with dead landscape to a show place home, which also improved the property values of the surrounding homes.  Anyway as I was saying, the neighbors were angry about rentals and said that they were going to complain to the city ordinance officers so much that the owner would have to sell the property.  They also shared that they had no problem complaining and often called city ordinance to report the lady who lived directly behind the vacation rental home.  Apparently she is an artist who played her music too loud when she was painting in her back yard.  I personally found this to be true on several of my visits to the property.  Some time went by and sure enough, I started getting calls … but from the tenants, not the city.  The neighbors were shouting across the back walls for the tenants to stop jumping in the pool and making noise.  Code Compliance was called and actually got after the neighbors, threatening to issue a fine for the nuisance calls they were making to the city.  I was at the property for one of these calls and the neighbors met me by my car … the two neighbors that originally approached me plus the lady who played her music too loud when she painted!  Guess they all found common ground in the “agonizing ordeal” of dealing with vacation renters and now her loud music was no longer the source of their anger!  Really???  Come on people … live and let live!

So … the city has their monthly City Council Meetings and the residents complain about vacation rentals.  So … the city throws more rules and regulations into the ordinance to quiet the residents.  In the long run, with more rules to violate this just gives the residents more reasons to call city ordinance.  So they write in another regulation instead of dealing with the source of the problem.

I think a better way of handling this problem would be to talk to local residents about the importance of vacation rentals and try to get a handle on all the exaggerated hostility.   Of course, rental owners and vacation rental companies should be included in these discussions since they will need to take responsibility by educating and monitoring tenants at their properties.   We need to defuse the “over-the-top” anger and work together because vacation rentals are a great source in bringing money to local businesses, jobs to all the various people needed to service these properties,  generate needed tax money for our cities and is great for tourism and real estate sales.

To residents I would say … most vacation renters are exactly like you and if the opportunity presented itself, would probably be good friends.  They are on a hard-earned vacation in our wonderful desert, pretty much the same as you were many years ago.  They may even fall in love with the area and buy a property; perhaps retire here, just like you.  Remember your own children jumping into the pool and splashing around, remember your family BBQs?  Most likely these folks are YOU … just some years ago.

I wish we could all get along together just enough to fix this situation … unfortunately this is happening everywhere.  So why are people so angry these days?  I guess it’s always been this way.  After all, it was over fifty years ago, in 1964 when Mrs. Kravitz first appeared on Bewitched.   I guess the better question would be … what “if” we could all get along and make this work?

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Why Should You Go With a Pro?

Java Printing

The following is a post I am sharing from the Vacation Rental Managers Association’s Blog dated April 23, 2015 by Trisha Howarth. There are many reasons to consider professional management of your vacation home. Trisha has just about summed it up … but there are additional benefits and you will find a few below her post in the comments section. The final comment I submitted yesterday. As a vacation rental owner, there are many points mentioned below that you will want to consider when making your decision on professional or self-management.

Why Should Homeowners Go With a Pro?

Thinking about renting your own vacation home? Here are some things to consider.

It may be tempting to place your home on a “for rent by owner” website and attempt to handle the rental of your home without using a professional agency. While saving on agency fees may be tempting, are the savings really money in the bank?

Time is money. The value of having an agency handle rental for you allows you to focus on the enjoyment of your second home versus the rental and maintenance aspect associated with home ownership. Filtering inquiries, booking reservations, greeting guests, servicing the guests while they are in your home, maintenance calls, trust accounting, tax submissions, and marketing all take a large amount of time. How does the return on the time it takes to do all these items compare with your regular earning potential during these hours or to the value of time spent doing things you love?

Security of your investment is key. On-site personnel is essential for assuring that your home is in good order and guests have left the home as they found it. What if something does happen during a guest’ stay? Handling collections and legal issues surrounding damage or an event can be difficult especially if the issue isn’t caught in a timely manner. How will you know if your home is secure and maintained without hiring some to check it for you?

Attention to you and your guests are the focal points of a professional agency. Vacation rental management companies are in business to bring agency, homeowner and guest together in business transactions that benefit all parties. It is what they do. Agencies hire full-time employees and provide them with professional and legal training as well as stay knowledge about industry trends. Agencies also have systems in place to take care of owners and rental guests. Some agencies also may have an attorney on staff to assist in daily decisions regarding rental receipts and advise on issues that arise.

Exposure through marketing brings awareness and results in bookings. When you list your home with a website provider you become limited to one stream of exposure. A professional agency may list your home on the very website you are considering and pay the associated fees; however, an agency invests money in many forms of advertising including web, print, direct mail and public relations.

Satisfaction comes in many forms. In the short-term the savings may seem worth it; however, peace of mind is worth something. “For rent by owner” sites taut booking results, but what about your personal experiences with rental guests and the overall experiences of the guests themselves? Taking the worry out of maintaining a home you visit several times a year, the challenges of customer service and all the various components of renting a home is what a professional agency does.

Before listing your home on a “for rent by owner” site, research rental agency firms and weigh your options. Vacation rental management companies with proven track records can offer a way for homeowners to enjoy their second home instead of manage it.

 

Comments

By: William LeMasters

On: 04/28/2015 12:31:37

Additional benefits of professional management comes with stronger vendor relationships that a management company develops which results in faster response times and better pricing on repairs and supplies.
Additionally a management company works with larger data blocks and can be more effective setting and adjusting pricing to maximize revenue.

By: Erin Mitchell

On: 04/28/2015 13:34:58

William brings up a very good point. Strong vendor relationships is huge and can ultimately make or break a guest’s experience if something does go wrong. We have had last minute issues with pools, appliances, AC- you name it and our strong relationship with certain vendors helps us solve these issues much quicker. In Hawaii, this difference is especially exaggerated as there is a very small vendor pool to call as it is and repair parts are often not in stock.

To add to the point about “Time” – No matter what, someone always has a question in the group (where’s the extra TP, can you recommend a cab, what time is sunset, do the trees block the view, etc.) and having a professional manage your property means you have some available to answer the many questions a guest has and at all hours.

By: Vickie Murguia

On: 05/23/2015

Another advantage would be in handling city ordinance regulations and the oversight of short term vacation rentals. It is difficult for an owner to manage their property from a distance when city ordinances have strict monitoring regulations. Many cities require a responsible party be available twenty-four hours a day and within an hour’s drive if a code enforcement violation is received. It is also beneficial to have an advocate of vacation rentals present at HOA and City Council meetings to represent absentee owners and their rights. Attending these meetings, I have noticed that some of the most vocal complaints from residents opposed to short term vacation rentals, site absentee owners who manage their properties from a distance and feel that there is no oversight of the tenants reflecting a lack of concern for their surrounding neighbors. Vacation Rentals of the Desert makes it a practice to pass out our business cards to neighbors of the vacation home and encourage owners to do the same. I have found that when neighbors feel that their concerns matter and have a local professional company that can be contacted directly, it has often circumvented complaint calls to city officials, and saved the owner costly fines. It will also generate a better relationship between the vacation rental owner and their neighbors.

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Furnishing a Vacation Home

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Shop consignment stores! A few vintage pieces can add charm and interest to your decor … but be careful not to go overboard creating a “dated” look to your vacation home.

 

 

 

 

 

 

 

 

 

So … you just purchased a vacation rental home.  If the property is unfurnished, you have a blank slate and the perfect opportunity to choose furnishings and amenities that will draw tenants.  If you plan on using the property yourself, of course you will want to furnish the property to meet your needs, but it is also important to consider the needs of prospective tenants.  Through my years in the vacation rental business, I have seen gorgeous properties sit vacant while a lower-end property next door was constantly rented.  There are more factors in making your property desirable then decorator décor.  Location, pricing, bed configuration and amenities, weigh heavily in attracting inquiries.  I have a few suggestions for those new to vacation rental ownership and suggestions for areas that are often overlooked.

First … It is very important that you read through the city’s vacation rental ordinance.  Even if you plan to have a professional management company handle your vacation home, you as the property owner, are fully responsible for any ordinance violations.  Most cities have short term vacation rental regulations that limit the number of occupants based on the number of bedrooms.  It is important that you know what the city considers a bedroom or sleeping area.  There is no use adding sofa-beds in living rooms and dens if the city sets occupancy limits.  For example, here in California, a room without a closet is not considered a bedroom.  So if one of the bedrooms has been converted to a den and the closet has been removed, it is not a bedroom.  If your plans are to use the space as a bedroom or sleeping den, to be on the safe side, you may want to consider adding a closet.  Ordinance violation fines for exceeding occupancy limits can be significant.

Bed Configuration:  You need to do your homework and be fully informed on your particular demographic.  Review area rentals on the internet.  Look at the occupancy calendars of properties your size and in your immediate area.  Note the typical length of stay, bed configuration and amenities offered.  You can also talk to local vacation rental companies.  Even if you plan on handling your own rentals, vacation  management companies are a wealth of information.  Here are a few things to consider when setting up your bedrooms:

  • I would ALWAYS advise a king in the master bedroom! This is a big deal breaker for many people.  Two reasons:  If the tenant has a king bed at their own home, they will want a king bed in their vacation home too.  If the tenant is tall, they will need a king bed to be comfortable. Vacation Rentals of the Desert manages several vacation homes with queen beds in the master … and believe me … this IS a big deal and we see a significant difference in desirability.
  • Did you know that two twins can easily be joined to make a king? When advertising, you should always describe the beds as “two twins that can be converted to a king.”  Twins-to-king conversion kits can be purchased at Bed, Bath & Beyond or online at Amazon.  There are increased costs but it will also make your property suitable to a wider audience.  You will need complete bedding for both twin beds and a king bed … mattress pads, sheets, blankets, bedspreads.  You will also need to ask tenants how they would like the beds set up for their stay.  Note:  If you are with a management company or are a long distance owner, you will probably have to pay extra for the beds to be joined or parted and then for the beds to be made up with the correct bedding.  Another note:  I would never cut corners and push two twins together and advertise it as a king bed.  It is likely that the tenant will feel the hump in the middle and you will probably get a complaint call or worse … a review saying that the bed configuration was falsely advertised.   Full disclosure is your best bet.
  • If you have a large guest bedroom you may want to consider two full or queen beds. This is much more appealing to a renter than two twin beds.
  • A single full size bed should only be used if you do not have room for a larger bed. It will not be appealing to a couple.  If at all possible you want each bedroom to have the ability to sleep two people comfortably.
  • I am not a huge fan of bunk beds. Couple of reasons:  First … safety and owner’s liability are big concerns.  Second … it pretty much limits the room to children only.  Adults will shy away from even sleeping in the lower bunk.  However, in some communities bunk beds may be a plus. Before buying I recommend that you check with your insurance company on possible liability issues.
  • Sofa-beds are rarely comfortable but adding a very thick, quality mattress cover will help greatly. Sofa-beds are best used by children or for short stays.  If your demographic caters to adults, beds are preferred.

We have several three bedroom condominiums where one bedroom has been “purposed” as a den/office.  For our demographic, this makes sense.  As I mentioned, most of our tenants consist of one or two couples staying for one month or longer.  They may think that a three bedroom property is unnecessary and will not even consider it … but a two bedroom with an office/den is a space that they will use.  It will also work for families that come out for shorter stays where a sofa-bed can be used for a few days or by a child.  If you know what the typical renter in your area is looking for in a vacation rental, you will be able to better determine how to furnish your vacation home to attract attention.

home-office-desk-lamps

A small desk tucked into a corner creates a handy work station for your guests. Look for a desk that compliments your decor and avoid student computer work stations.

Desk or Office Space:  Have you ever stayed in a hotel that does not have a desk?  Now more than ever, a desk is a welcome amenity.   You can bet your tenants are bringing their laptops, iPads and Notebooks.   From correspondence, to bill paying, to keeping up with the stock market and even those who are on a “working vacation,” having space to set up their computer is huge.  Unless your property is advertised as a bare-bone; wilderness experience … you absolutely MUST have Wi-Fi.  Note:  Choose a nice home/office desk that will match your décor, such as the one pictured here.  Avoid the inexpensive student style computer desks that will conflict with the beauty of your home.

Living Room Furniture:  Rule of thumb … at least enough comfortable seating for the maximum amount of tenants who will be staying at the vacation home.  If you have a three bedroom home that sleeps six, then you want seating for six … and that doesn’t mean wedging four people on a sofa.  Imagine three couples watching TV.  They will not be comfortable on top of each other.    Same goes for the dining room and patio furniture.  You should have seating for the maximum number of people your property will accommodate.

Flat Screen TVs:  If you have an old boxy TV … throw it away.  Even if it works … throw it away.  It will lose you rentals … guaranteed.  When a tenant sees an old TV they immediately think that the owner is cheap and does not keep up the property.  We hear this every day!  It may be the farthest thing from the truth, but that is how a prospective tenant will perceive it.  A flat screen TV in the living room, den and all bedrooms should cover all the bases.  You will never lose renters because you have too many TVs … but you will for not enough.  If they have children, bedroom TVs can be a big deal.  With the cost of TVs these days, it is an investment that will pay for itself quickly.  Best Buy typically has adequate 32” TVs for less than $200.

DVD or Blu Ray Player:  I recommend Blu Ray players.  They are now inexpensive ($10 more than DVD), and they will play regular and Blu Ray discs.  This past year I went with two long time girl friends on a three day vacation to the mountains.  We had planned one stay-home evening of wine and chick-flicks.  We were really disappointed that there was no DVD player of any kind at the vacation home.  This isn’t even considered an amenity anymore … it’s a necessity in a vacation home.

Lighting:  I know … I love those little decorator bedside lamps with the dark colored shades that match the bedspread … but can you read a book in bed?  Look for those really great bedside lamps that you CAN ready by … maybe the kind that uses three-way bulbs.  Recessed lights in the ceiling are great for lighting an entire room but not so great for reading.  You should have table lamps in the bedrooms and in the living room.  Furnish your vacation home so that every tenant can read in bed or in living areas and you’ll never get a complaint about lighting.  If you do not have the space for a table to place a lamp, I recommend one of the standing lamps with three directional lights.  It can be stored in a closet, but easily moved by tenants wherever needed.

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Ceiling fans in living areas and bedrooms will help to cut your air conditioning bills and add beauty to your vacation home.

Ceiling Fans:  EVERYWHERE if you can.  It’s not a necessity, but will make a huge difference in your air conditioning bills.

Full Length Mirror:  Somewhere in the property you should have at least one full length mirror.

Door Hooks:  I cannot tell you how many owners do not think to put hooks behind bathroom doors.  Tenants often mention the lack of hooks to hang their robes or sleepwear.  Or worse … owners will return to their properties to find that tenants have taken it upon themselves to put up a stick-on type hook … which the owner may not be unhappy about.  It is always best to put up the hooks that you desire and that will match your décor.

Area, Bath and Kitchen Rugs:  Always purchase non-skid rugs for safety purposes.  If you have tile inside the front door, back door or sliding glass doors, you should have a non-skid rug to prevent slipping accidents when the guests enter when raining or wet outside.  I usually recommend machine washable rugs whenever possible.  This will save you a little money in professional carpet cleaning costs.

Throws:  If you decide to purchase throw blankets … I recommend the kind that can be thrown in the washer.  They will need to be cleaned.  This season we had mishaps at two properties where tenants washed wool throws, not noticing the dry clean only label.  The owners now have very expensive kitchen hot pads!

For more ideas and helpful hints, read through some of my earlier blog posts.  The posts that address furnishings in particular are, “Dress for Success,” posted February 8, 2015, “Make Cents?” posted June 22, 2014, “Furnishing Tips … What You Don’t Know May Cost You,” posted February 23, 2014 and “Kitchen Rehab,” posted February 2, 2014.  A complete copy of Vacation Rentals of the Desert’s Minimum Requirement List, which may be helpful when purchasing your basic needs, can be found in my December 14, 2014 post titled “A Perfectly Appointed Vacation Home.”  Of course you may have additional needs based on your area and demographic, but our list may be a good starting point.  As always, I would be happy to answer any of your questions asked through this blog or at Vickie@vacationrentalsofthedesert.comHappy Sunday!

 

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Photos:   http://www.kitchencabinetssandiego.us & http://www.palmfanstore.com & http://adonishoffman.com

New Technology Brings Up New Issue to Consider

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This past week we had a new kind of wrench thrown into the system.  It came in the form of “Smart Home” technology.  You know those commercials we see on TV all the time showing that via cell phone or computer, we can now control our entire home from a distance … lock doors, adjust thermostat, turn on/off lights.  You’d think that would be pretty cool for a vacation home … until you look at privacy laws.

Even though not all vacation rental owners are rushing to install these new computerized systems, a few owners do have them.  In our experience these systems are sometimes complicated to operate manually, and can be a challenge for tenants.  Once the system is understood by our staff and explained to the guests, the technology is amazing … that is up until the owner calls to complain that the tenants have the A/C turned down too low or up too high, that the widows are open or the doors left unlocked.  Of course the owner jumps to the worst case scenario and as the manager of the vacation property, we have to intervene.

Which is exactly what happened this past weekend.  An owner with a “Smart Home” system called to report that they were receiving alarm signals on their cell phone indicating that the A/C was on and the windows and doors were open.  They asked that we contact the tenants to let them know that they were receiving alarms and that the A/C system would automatically shut down when the doors and windows were open … which we did. Throughout the weekend there was a power struggle between the A/C system shutting down and the tenants turning the temperature further down to get the system to work.

On Monday morning we received a call from a very upset tenant stating that he was going to file a law suit against the owner for invasion of privacy.  In addition to monitoring the windows and doors, we found out that the owners had turned the A/C up when they felt that the temperature was set too low.  Legally it would have been within the tenant’s rights to sue and possibly win a small claims suit against the owner.  Even though the owner did not set foot within the property the tenant was being monitored and their use of the property controlled remotely by the owner.  Consequently, the tenants were upset and had an uncomfortable vacation.  In this instance there were other circumstances surrounding the rental which may have prodded the owners into watching their home more closely.  Being the Coachella Fest weekend, one of the country’s largest and most popular three day music festivals, there is a very real risk of over populated “party houses”.  All of our vacation rental owners are on edge.  Regardless of the circumstance, owners and vacation rental management staff must know and abide by the law.

Overview and California Civil Code

In short, the implied covenant of quiet enjoyment is a guarantee of sorts that the landlord will not permit either himself or someone else from interfering with the tenant’s use and enjoyment of the rental unit. This implied covenant was established all the way back in 1927 in California Civil Code 1872 which stated: “An agreement to let upon hire binds the letter to secure to the hirer the quiet possession of the thing hired during the term of the hiring, against all persons lawfully claiming the same.” Since its enactment, California cases have set out to define in greater detail what this covenant is and what it is not.

The latest in personal “Smart Home” technology is now widely used in the vacation rental industry, allowing door locks, security alarm systems, A/C-heating units, lights and pool heaters, to be monitored and controlled remotely.  In this surveillance sensitive age, all vacation rental owners and management staff must be made aware of the civil codes and laws that surround the privacy of their tenants and the boundaries and even the possibly that legal disclosures will have to be implemented to protect the tenants, owners and their management staff.

Thankfully a close associate of Vacation Rentals of the Desert has a long history and on-going relationship with the tenants mentioned above.  Thanks to her intervention, an amicable settlement was reached.  In this ever changing industry … another lesson learned.

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Is Palm Springs on the Right Track?

palm_springs_03On December 10th the Desert Sun ran an editorial on vacation rentals in Palm Springs.  I am glad to see the media presenting a broader picture on the heated debate between vacation rental operators and local residents.  There are two definite sides to vacation rentals and I firmly believe that finding a middle ground will benefit everyone in the long run.  Palm Springs might be on to something here!  For quite some time I have been saying that some entity needs to step in and handle the complaints received by the police and compliance offices.  We need a neutral party to identify problem homes as well as nuisance residents. 
Bad owners and party houses are giving us a bad rap … or should I say rep.  Every party house reflects on the entire industry.  Every conscientious vacation rental owner and manager would like to see the bad players shut down.  These few bad apples are harming the entire industry.  I am hopeful that the Palm Springs pilot program will be successful.  By cracking down and enforcing the existing regulations, perhaps we can stop the increasingly strict city rules and regulations. 
Again and again I have been put in the very uncomfortable position of defending a Rancho Mirage regulation that I view unfair.  This past week, meeting and doing a property walk-through, I had to explain to a lovely sixty-something year old couple that they were not permitted to turn on the TV on the back patio … period.  The couple was disappointed that the city felt that they could be a possible nuisance if they took their coffee out to the private back yard and watched the morning news.   They mentioned that it was not a very welcoming feeling.  For the vacation rental owners and managers who strive to enforce good neighbor policies and follow all the rules, it is bitter to swallow the pill prescribed for the few problem properties. 
The boost that vacation rentals bring to the local economy and the city coffers, make it worth the effort to find a workable solution.  I also believe that there are some people who have gotten their backs up, and this is true on both sides of the issue.   This should also be looked at very carefully.  This is a good time for everyone to stand down, take a deep-breath and give the Palm Springs’ pilot program a chance to succeed. 
Following is the Desert Sun Editorial dated December 10, 2014 …

Our Voice: Palm Springs on top of vacation rentals

Vacation rental management agencies and homeowners in Palm Springs can expect a more vigorous response and follow-up to disturbance complaints.

The city will launch a three-month pilot program with Desert Security Services to quickly respond to disturbances received by the police department on weekends.

“The security officer or a code person will be dispatched immediately by police dispatch,” David Ready, Palm Springs city manager, told the Palm Springs City Council on Wednesday. The pilot program will cost $45,000 to $50,000.

“They will respond immediately to that home, and make an assessment of what’s occurring. If a citation needs to be issued, they will do it. And if nothing is occurring, they will record that as well,” Ready added.

The council was reviewing the modifications it made to the city’s vacation rental ordinance six months ago, in part, to see if the changes are working to reduce disturbances, and improve compliance with the ordinance.

Roughly 1,500 homes in Palm Springs are registered as vacation rentals, a 10.3 percent increase since February. Of those, 2 to 3 percent of the rentals have garnered complaints, according to city statistics taken in the last six months.

However, the issue remains a sensitive one — particularly for those residents who happen to live next door to “party houses.”

Tricia Porter said she has what seems to amount to a fraternity house behind her home.

“We can stand in the front of our house and hear them playing ping pong,” Porter told the council.   Read full article …..

Photo: http://www.dollysinatralodgeosia.org/

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