Summit Mountain Rentals (a property management company in Summit County) has some great advice for first-time second homeowners who are looking to rent their property.
RENTING YOUR VACATION HOME YOURSELF? AVOID THESE FIRST-TIMER PITFALLS
If you’re renting your vacation home for the first time, it’s easy to fall victim to what we call “first-timer pitfalls.” Renting your vacation home is a business. Unfortunately, many forget this and treat renting their home too casually or forget to consider the consequences. Running a business, even a small one like renting your property, takes time, effort and thoughtfulness.
Here are the top things to never forget:
Pay your taxes
In the beginning of the vacation rental market, governments were not too worried about a single homeowner paying sales tax. But with the advent of VRBO, AirBnB and other online channels of sale, vacation rentals by owners is big business — with big revenue. Local tax entities no longer look kindly upon a “casual” attitude toward paying taxes. The last couple of years, city, county and state governments have offered amnesty to homeowners for back taxes as long as they start paying current taxes. However, these types of programs are going away.
If you are renting your property, you owe sales tax — and not paying sales tax is a crime. If you have not been paying sales tax, start now. Remember, it does not affect your rental’s price. Everyone expects to pay sales tax on top of the price you list; you just need to tell your guests and charge them for it. There is no reason to risk criminal action, so pay your taxes.
Need help? Check out this great article on vacation rental taxes.
Get professional pictures of your rental
Yes, this costs money. But the difference in revenue, guest satisfaction and just plain pride in your home calls for professional pictures. And, unless you sell photography for money, you are not a professional photographer. The number one way to distinguish yourself from other properties in the sales process is to have great pictures. Homeaway/VRBO is now building algorithms to determine if you have good pictures; if so, you get a higher spot in their listings. This will become standard in the market. Not only do good pictures generate better income; it makes for happier guests. The number one way to make a guest happy is to meet or exceed their expectations. So take lots of great pictures and let your guest know exactly what they are getting. You will make them happier, generate better income and reviews, and just make your life easier.
Upgrade your vacation home
If you walk into your vacation home and say “Wow, I really like being here,” so will your guests. Think of it this way: going cheap gets cheap — and going nicer gets nicer. If you furnish and treat your home like a “rental,” then your guest will do the same. If you furnish and treat your home like a beautiful home, then your guests will do the same. Nicer homes have much less wear and tear because guests love them and come back. I always advise my owners to make their home something they love to come to. It always works — guests know the second they come into a home whether the owner cares about their property. And, it will generate more money for you. The number one way to increase price and sell more nights is creating repeat guests. People come back to places they like. Making your home spectacular not only makes you feel good when you visit, it makes your guests feel good and makes you more money through higher rates and higher occupancy.
A bad bed is just a bad bed
Have you slept or at least tried to take a nap on all the beds in your vacation home? If you haven’t, do it. One bad review about mattresses can make you lose a lot of guests. People don’t call and ask if you replaced a bad mattress they read about in a review; they just don’t come. If you get a complaint, go try to sleep on the bed. If your mattresses are 10 years old … they are 10 years old! Replace them. The primary function of a vacation home is to sleep. Often your guests will not even eat in the home, but they all sleep in the home. If you don’t give them a good night’s sleep, nothing else matters.
Need help? Check out this great articles on updating vacation-home bedding.
Have local resources ready
Now that you have found your renters, collected their money and checked them in — what happens next? Why, Murphy’s Law, of course: “Anything that can go wrong, will go wrong.” The TV won’t work, the heat goes out, the air conditioning goes out, the fire alarm goes off, the water doesn’t come out of the master shower … and so on. Almost no one realizes how often things go wrong in their own home … we just take care of it. But in your vacation rental — for which someone is paying good money — you now have to take care of the same issues for someone else. And, you’re a 1000 miles away.
It is imperative that you not only have names and numbers of good local vendors (plumbers, electricians, etc.) but that you have interviewed them. You need to know if the plumber will come out on a Sunday night at 10 p.m. (You do know that toilets only overflow on a weekend night, right?) You need to know that your audio video resource will be able to fix the TV on Super Bowl weekend (again, this always happens!). You need to know that electrician will go out and fix the power at 1 a.m. so the house does not freeze. There is nothing worse than having a guest yelling at you over the phone because their 2-year-old child has been sleeping in a freezing cold or overheated room for four hours. Be prepared … and know your resources.
Pricing is important
Don’t be fooled: Having every date sold in July 2016 by the end of August 2015 the previous year is not “great.” It means your pricing is WAY TOO LOW. Not only have you lost out lots of revenue, you have probably rented to the cheapest and least respectful people. The same is true for not having July 4 booked by June 15. In this case, your pricing is probably WAY TOO HIGH.
So … pricing is very important. You need to sell your property, but you don’t want to give it away. The trick is research and paying attention. Do a quick search of the vacation homes that are similar to yours. How are they priced? Now do you want sell your home before them (price yours slightly lower) or after them (price yours slightly higher). Then pay attention. if your home is selling too fast, raise the price. If it is selling slowly, lower the price.
Renting a vacation home is a job
It takes time. Don’t fool yourself. If you want to do it yourself, make sure you have the time to do things right. What I’ve discussed here is just a small part of what it takes to rent your vacation home yourself. If you take the time and do it right, you can make good money. But if you don’t have the time or don’t like doing it, no amount of money made will be worth the aggravation.
So, try it! You’ll know quickly if you like it. If you don’t like doing it, get a good property management company do it for you. Either way, USE YOUR HOME AND ENJOY IT. I have found that owners who visit their vacation home often have the happiest guests. If you are happy with your vacation home, then others will be happy too.
If you have any questions about renting your vacation property yourself, call me! I’m happy to talk with you and help you get started. Here’s my number:
Mark Waldman, Owner, Summit Mountain Rentals, 970-423-7382