Skip Booking Fees!

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Owners and renters of Vacation Rentals may not be aware of the recent changes to Vacation Rentals By Owner (VRBO) after its acquisition by Expedia. Expedia purchased VRBO to serve as direct competition to newer sites like FlipKey and AirBnB.  Prior to the acquisition, there were various tiers or levels an owner could pay for a VRBO listing.  The different tiers had different benefits which could improve placement in the listings and searches on the site and the number of photos you can have on a listing.  Now, all owners pay the same flat fee to list a property if the property allows online bookings and a higher flat fee for properties that do not.  The biggest change is the use of an algorithm to determine the listing order and a service fee of 10% with a cap at $399 per booking paid by the renter to VRBO.

For Owners these changes can drastically affect your bookings.  The fees for listing the property can be significantly higher than those they were previously paying.  The “performance algorithm” that now determines the rank of a listing punishes those who prefer to deal with inquiries off of the site or in direct contact with the inquirer.  Meaning if an owner responds to an inquiry via the inquirers contact info and not through the VRBO site, the owner does not get credit for responding to the inquiry.  The listings are now showing response rates, for example “avg. response time: 2 days.”  Using the algorithm limits what an owner can do themselves to improve their position in rankings and leaves it up to the algorithm to essentially “guess” whether a renter would be interested in the property.  In addition, some owners have already noticed less bookings as renters get “scared off” by the service fee.  The additional money on top of the rent rate is pushing renters to seek other avenues. Renters are not as affected as owners with the changes except for financially.  If you rent a property for a month at $2000 who would really want to spend an extra $200 in service fees to VRBO?  Those monies could be used for food, activities, shopping, or other ways that benefit the renter and not a company who acted purely as a middle man.

So how can you save 10% on your next vacation rental?  As a renter you can search for a Vacation Rental Management (VRM) company, such as Vacation Rentals of the Desert, in the area you would like to stay.  If you aren’t finding a company during a quick google search you can call a local visitors bureau or chamber of commerce and they can most likely give you a list of professionally managed companies to try.  For owners, you can try listing your property with a VRM company who generally only take a commission for bookings and do not charge an additional fee to the renters or a listing fee, although some may.  VRMs can also negotiate between the renters and owners, from an existing client list in addition to new inquiries, to find a rate that satisfies both parties involved from an existing client list in addition to new inquires.

Post by guest blogger Vacation Rentals of the Desert Employee David

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Who’s Minding Your Business?

The Pros & Cons of an Owner Managed Vacation Rental

shutterstock_65009158I receive many calls throughout the year from new property owners asking about our services.  Many are researching the pros and cons of professional vacation rental management verses listing and managing their properties themselves.  There are many things to consider … the biggest … how much spare time they have to spend managing their property, particularly if they do not live in the area and whether they have a reliable, trustworthy person they can call upon 24 hours a day.  The primary issues to consider are cleaning, maintenance, tenant assistance, emergencies, overseeing the property while occupied and city/state laws and compliance.

As a vacation rental manager for over eighteen years, I can tell you from personal experience that there is much more than a 50/50 chance that issues will arise during a guest’s stay.  Even the most meticulously clean, well maintained property will have the occasional issue.  When a guest calls, the “manager” of the property MUST answer.  Most of the time the call will be a minor issue; the guest cannot find a needed item or the guest cannot figure out how to use the cable TV remote, etc.   Here are just a few of the more serious scenarios to consider … and all are true stories.

A tenant calls in a panic to report a bad leak is flooding your property or an overflowing toilet has flood the hall carpet.  These kinds of emergencies must be addressed immediately and if you are an owner managing your property … do you carry your cell phone with you all the time?  Sleep with your cell phone by the bed?  You must!  If you do not hear the phone at midnight because it is in another room …. you can imagine how upset the tenant will be in the morning when you finally call them back … they may even have gone to a hotel and expect you to reimburse them for the night’s stay as well as their inconvenience.   An owner will also be worried about the damage to their property.  Who should they call to take care of the repair and damage?  What if the guest cannot get the garage door open and they end up calling a taxi … they are going to expect reimbursement.  Do you have someone reliable you can call 24 hours a day, 7 days a week to assist with emergencies and make good, sound decisions?

I have personal experience with owners who have set up their cleaners to not only clean and maintain their property but also handle 24 hour emergency services.  This does not always work out well in an emergency situation as in one case where the owner could not reach the cleaners on Thanksgiving Day to ask for assistance with an emergency at their vacation property.  The guests called the owner to report that the breaker would not flip back on and they had a stuffed turkey in the oven that they could not cook.  The cleaners were at a family gathering and did not hear the phone.  With no assistance from the owner, the rental guests tried to use a heavy duty extension cord they found in the garage to run the electricity to another outlet in the home.  Thank goodness this did not work… it could have been disastrous to the guests and the property.  The guests ended up taking their family to a restaurant for Thanksgiving dinner and the owner not only paid for their entire meal but also for the turkey and fixings that went unused.

An even more disturbing occurrence, and I have two owners who experienced this scenario prior to joining Vacation Rentals of the Desert, was finding that the designated cleaner or friend that the owner arranged to manage the property in their absence, rented out the property unbeknownst to the owner and pocketed the rental fees.  Unfortunately I have heard this story over and over again.  Or … and this happens even more often … the designated “manager” allows their friends or family to stay at the property without informing the owner.

Who’s minding your business? 

The above are just a few stories associated with absentee ownership and every vacation rental owner contemplating owner management verses professional local management should be aware and weigh the pros and cons.  Professional management will definitely cost you a percentage of your rental fees … but in the long run, is the peace of mind and cost of your time worth the price?

Following are some of the other benefits that come along with professional “local” vacation rental management.  These are the benefits we offer at Vacation Rentals of the Desert.  Most of these benefits apply to all professional companies however this is a good check-list to use when interviewing for a management company that suits you and your property.

24/7:      We manage vacation rentals 24/7.  We respond quickly and professionally to guest inquires, vacationing guests and homeowners.  Also, we respond to emergencies 24 hours a day.  We provide all guests with our after-hours emergency number and we provide a guest book with important information about each particular property.

Guest Services:  From reservation inquires to booking; from check-in to repair calls; from concierge services to housekeeping and inspections; we take care of guests and vacation properties 24 hours a day.

Marketing:    Who knows better how to market your vacation home than a professional manager?  Who has more marketing dollars to spend on advertising?  And strength in numbers?  We live here, we participate in our communities, and we are part of the tourism efforts.  Local events, holidays, and customer base of thousands of guests who often return year after year as repeat customers.

Internet Marketing:    We know Internet Marketing!  We know Search Engine Optimization!  Our website is attractive, easy to use and up-to-date.  We know how to help guests find your property online, easily, when they are planning a vacation in the area.  We manage email marketing to past guests, social media marketing, listing sites and a variety of other internet marketing strategies that will lead browsers to our website and to book our properties.

Promotions:    Print, radio, internet, travel bureaus, chambers of commerce, email blasts and Facebook, pre-arrival and post-vacation emails, guest surveys, low-season promotions, rental brochures and rack cards …. We are hospitality experts who promote the area and your property!

Reservations Made Easy:    In person, online or on the phone, our reservationists know your property and know how to promote it to inquiring guests.  Whether paying by check or credit card, Vacation Rentals of the Desert makes it easy for guests to book your property in a secure, professional environment.  Rental and refund policies are clear and professional.  We absorb the credit card fees into the cost of doing business … a savings to our homeowners.

Additional Services:    Travel insurance, additional housekeeping services, golf cart rentals, linen services and much, much more … professional managers offer guests everything they need for a great vacation.

Housekeeping & Inspections:    We employ trained, skilled housekeepers who keep your vacation rental home cleaned to industry and sanitation standards.  Inspectors are in your property before and after every guest, ensuring consistency, quality and making sure that everything is in order.

Maintenance:    We make sure all properties are in great shape at all times; are clean and in good repair.  We offer professional maintenance services with a timely response to maintenance problems and after-hours requests for emergency services 24 hours a day, 7 days a week.  We use reliable vendors who are qualified to handle practically any situation, at fair prices.  We offer guest plans to cover against accidental breakage/damage.

Money:    As professionals, we maximize the return on your investment property or second home, earning you money when you aren’t using it.  Professional marketing and excellent guest services earn guests’ loyalty and repeat visits.

Records:    We keep the records … from revenues to repairs; from lodging tax to 1099s … you’ll receive professional accounting of what is happening at your property.

Communication:    We let you know what’s happening … from property repairs and marketing initiatives to local issues and industry standards.  We know the vacation rental industry and we’ll keep you informed.

Security:    As professional managers, we are the constant “eyes and ears” for your property.  Instead of sitting empty year-round, vacation homes are lived in, checked and maintained during tenant occupancy.  We meet your guests and we’re available if a problem arises.

Accountability:    As your vacation rental manager, we are primarily accountable to you, the property owner.  All guests are required to sign a detailed rental agreement and review the policies.  We primarily rent to families or adults and do not handle “party houses.”  We do everything we can to protect your home and your investment and to be good neighbors.

Local Connections:    We maintain relationships with HOAs as well as local city officials and agencies … from tourism boards to the police, city compliance officers, City Councils and Chambers.  We are constantly making sure our homeowners views are taken into consideration and that their vacation rental property is viewed favorably.

Good Neighbors:    As professional vacation rental managers, we understand the importance of being good neighbors.  We maintain connections to property owner’s associations, your neighbors and neighborhoods; we keep guests informed about subdivision rules as well as local laws and ordinances.  We patrol our properties in order to enforce policies that do not allow overcrowding of your home, house parties and parking violations.

Local Advocacy:    Professional vacation rental management keeps homeowners’ best interest in mind at all times.  We advocate for clean, attractive communities and we participate in our chamber and tourism boards, planning commissions and other local and tourism related organizations.  We sponsor and volunteer for location initiatives that promote the positive impact from tourism.

Consumer Confidence:    Booking a professional managed vacation rental through a member of the VRMA (Vacation Rental Managers Association) is a seamless process, as all members are held to the highest standard, and committed to quality hospitality, professionalism and industry excellence.  Vacation Rentals of the Desert is a member of the VRMA and the owner serves on the Communication Board.

Time:    Vacation Rentals of the Desert will save homeowners time, worry and simplify the business aspects of vacation rental ownership!  We just about do it all! 

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How Vacation Rentals are Improving our Economy

 

WELLS FARGO AND BROTHERS REDEVELOPMENT HELP TWO ELDERLY SISTERS PAINT AND REPAIR THE HOME THEY HAVE LIVED IN FOR 54 YEARS.Over the past several years vacation rentals have contributed significantly in the recovery of our housing market.  When the housing bubble popped in 2008 the nation watched as their home values plummeted, yet the vacation rental industry grew.  Why?  The way I look at it, it was a perfect storm …..

In the summer of 2008 Vacation Rentals of the Desert was booked solid for the height of the upcoming season … February and March 2009, and we were looking for more properties to sign on and accommodate our growing tenant waiting list.  Then the storm hit …. the housing bubble popped, the stock market took a nose-drive and the very heated presidential campaigns were being fought … the sky was falling and we were all going to hell in a hand-basket or at least that is what the media would have us believe.  That fall, through October and November, about 75% of our tenants called to cancel their reservation.

After the dust settled, the stock market steadied, President Obama was sworn into office and everyone realized that life would go on and winters would continue to be cold in the northern states and Canada … our tenants called back to reinstate their reservations.  But … what was surprising (and should not have been unexpected) is that we started receiving calls from owners interested in listing their second homes.  Most of these owners had never intended to rent their family vacation home, but due to the economy they were struggling and looking for options.  For most, selling was impossible.  For many owners the property was upside down or for those who did have equity in their vacation home, the challenge was to find buyers in the sluggish sales market and for those who did find buyers, losing them due to buyers finding that bank loans were unattainable.

There were other options to these struggling home owners such as long term rentals.  But here again there were many challenges such as removing personal belongings and striping the property of all furnishings.  And as real estate sales were down, so were long term rentals.  Monthly rental rates plummeted and it was difficult to find tenants who could pass a credit check.  The reality was that many of the families looking for long term rentals had lost their own homes in the recession.   Other options … foreclosure or short sale.  For most … the vacation rental option was the wisest financial solution.

So … we, as many other vacation management companies, added properties to our rental program.  Some home owners decided to manage their vacation homes by listing them on VRBO or HomeAway.  There were few options back then, VRBO being the largest of the internet based rent by owner (RBO) sites.  This is the time when VRBO really took off and grew, as did other vacation management companies.

As the vacation rental industry grew, the media took notice and vacation rentals were exposed more broadly to the public.  As public awareness grew do did the demand.  Now renters were coming in greater numbers, for longer stays and a wider range of dates.  And over the past several years I have noticed a great increase of local properties purchased expressly to be used as a vacation rental.  Some may call these new owners “investors” and may view “investment” as a singular selfish and money making scheme, but it is not that simple and one must look at the bigger picture.

This may be the best time to purchase a family vacation home or future retirement home … even better if you purchased it two or three years ago … then you property got a significant deal.   Good for you!  In our area, with our short “rental season,” it is almost impossible to generate more money than would just “offset” your carry costs.   The following are perfect examples:

Scenario #1) While visiting the desert (maybe for the first time or tenth time), Mr. and Mrs. Smith walk into a neighboring open house.  They tell the real estate agent they are “just looking” but explain that they have been visiting the desert for X years and would love to own a property but do see that it financially viable.  So … the agent explains how they can purchase a second home and offset cost by doing vacation rentals.  They can save the two months of rental fees they are paying, apply it to the house payments and further offset cost with seasonal rental income.

Scenario #2)  Same as above only Mr. and Mrs. Jones wish to retire in the desert one day.  The real estate agent highlights the same above advantages but also points out that property values are going up and they may save a significant amount of money by getting their foot in the door now while housing prices and interest rates are still low.

Scenario #3) Mr. Green has money he would like to invest.  He chose to purchase a vacation home instead of investing in the stock market.  He may like the idea that he and his family can also enjoy the vacation home when it’s not rented … a more tangible investment than the stock market.

Senior #4) Mr. and Mrs. Johnson have a little money to invest, a bit of free time and are looking for a project.  They find a bank foreclosed home, short sale or beat up property that they can purchase at a steal.  They throw some money into it, some back-breaking TLC, and come out at the other end with a gorgeous vacation rental home that will generate a little income throughout the year and continue to increase in value as the real estate market grows.

I am certain there are many more reasons vacation homes are being purchased but these four examples are the ones I see over and over.  This year I have lost five repeat vacation rental tenants that fall under the first two scenarios.  Some putting the vacation home into our management program, others have privately listed their property on line.  I have picked up four properties that fall under scenario #3, and I am working with several owners in scenario #4.

This is how vacation rentals have helped improve our local housing market and economy.  Other than possibly scenario #4 … these buyers were previously vacation renters and visitors and lived outside our community … they came, they fell in love with the area … and then they purchased.   Sometimes our city officials and year round residents do not see this bigger picture … but as the older literally die out … the above four categories  represent the growing demographic of new buyers.   This has caused some controversy in our desert cities … it has actually caused controversy world-wide in resort communities and heavily populated vacation rental areas.  This is the world we live in now.  It is the result of the perfect storm.  It is the ingenuity and resourcefulness of individuals that has grown the vacation rental industry, contributed toward growing the economy and housing market and even increased property values in many areas.

Let’s look at this last statement … “increased property values.”  I have seen this throughout our area in HUGE numbers.  I am talking about those three or four properties that you see in almost every neighborhood.  The ones that look like they should be torn down.  The landscape and exterior are in a deplorable state.  During your evening walk, you don’t even allow your dog to venture into the yard.  The house windows may be broken or boarded up, the wood fence is leaning and you are almost certain that someone or something is living inside.  You know what these homes have done to your property values!

So Mr. and Mrs. Johnson purchase this home and over the next few months you notice the transformation from eye-sore to shiny new beauty and all the homes in the neighborhood enjoy a boost to their property value.  I have seen this over and over and over and over.  Some of these same property owners who are enjoying the enhancement of their neighborhoods and the increase in their property values are the same people that are standing up against vacation rental properties and so called party houses.  What a shame!  I’m not ready to get on my soap box, but I will say that it seems these days that neighbors have found it easier to throw their neighbor under the bus rather than address the issue straight on.  What a crying shame to have to throw out the barrel of apples instead of picking out the bad ones.  If asked, would you want to go back to the abandoned, foreclosed eye-sore of a property next door?  Doesn’t it make sense to try to figure out a solution rather than pushing these people out and going back to the previous status quo?

So … without actual local statistics and survey numbers, I still feel comfortable in saying that vacation rentals have helped to grow our local economy in the following ways:

1)      Increased sales in the housing market

2)      Improved property values

3)      Continue the “circle of life” by bringing in new residents and property owners

4)      Contributed valuable TOT (transient occupancy tax) to cities

5)      Heavily contribute towards the tourism industry

6)      Supported local business and contractors with home improvements, furnishings

7)      Support maintenance companies such as pool, gardening and cleaning services

8)      Helped cities in marketing the desert to tourists, business and home buyers

9)      Bring in city sales tax from retail, dining and entertainment

I will close with these words … every resident is entitled to “quite enjoyment” of their home.  I would hope that all vacation rental owners be very aware of the type of neighborhood their vacation home is located in (condominium, private home, estate, etc.), and the “tone” of your neighbors (hot-spot for vacation rental complaints, tolerant party spot, etc.), and rent to the demographic that will fit best within your neighborhood.  Look at the “big picture” keeping in mind that a “party” could cause irreparable relations with your neighbors and/or possible restrictions through city ordinance.  Don’t be that bad apple … if you are, not only are your neighbors upset with your “business,” but your fellow vacation rental owners are as anxious to pick you out of the apple barrel and throw you away.  After all … they are trying to be good neighbors and following the rules.

If you are a vacation rental tenant please take note that vacation rental home owners are dealing with city and community issues throughout the world.  If you are planning a party or feel that you may get loud or rowdy … please make sure you talk frankly to the property owner or management company.  Many cities have ordinances that could cause you to be removed from the property if confronted with a city ordinance violation.  There are some properties that may be better for your enjoyment and peace of mind during your stay.  I am certain that no one wants a visit from police, ordinance compliance, the owner or manager during their vacation.  It is a very good idea that you ask whether there is a vacation rental ordinance in the city that you will be visiting and either request a copy of the ordinance or visit the city page to see what limitations there may be as far as age restrictions, occupancy and noise/music restrictions.  Be informed now so you won’t be disappointed later.  And please, please be a good neighbor … act as you would want the vacation rental tenants next to your house, your bedroom window on a Sunday night when you have to get up at 6 a.m. Monday morning to get ready for work … to behave.

Now I will step onto my soap box and say one last thing … perhaps we can rebuild and revitalize our communities … together!

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