10 Mistakes VRBO’s Often Make – #5 will kill your business before it gets started

Managing a vacation rental by owner property can be challenging. There is so much involved in creating a profitable vacation rental business that getting it right from the start is tough — manageable but tough. It is more than learning from a few websites and hoping for the best; adopting a strategy for marketing and operating the business professionally from the outset can yield more income and occupancy than any adhoc approach.

These 10 points are a sample of the most common mistakes VRBO’s make. Maybe you have done one or two and maybe you are still. Being able to take a step back and observe your vacation rental business from back behind the trenches will give you a better perspective as to the areas you need to improve your strategy.

1. Not screening
Vacation homes are often seen as ideal ‘party’ venues for groups of young (and not so young) people. If you set your own restrictions on your property i.e. family groups only or no-pets, or as not suitable for young children, you’ll need to ‘screen’ potential guests to make sure they are a good match for your property. This simply means you need to talk to your guests — on the phone and not by email – to establish what they are looking for in a vacation rental and deciding whether you property is right for them, and conversely whether you want them in your property. Many first time owners get so excited about the first enquiries and bookings, they go for them without really thinking it through which can result in the potential for issues on arrival.

2. Listing with too many sites
There’s a gazillion listing sites on the web, all vying for your marketing dollars. Many of the newest sites will entice you in with a free listing and while there is nothing wrong with taking up these offers, think twice before you sign up with too many. Also make sure you are able to link back to your own website before you do. Remember that each time your business information changes (rates, amenities, photos) you will have to go to each site you’ve registered with and manually change the details.

Check out ‘Free Is Not What It’s Cracked Up To Be‘ for more information on free listings.

3. Thinking Craig’s List and Kijiji will bring quality clients
This is purely personal opinion but we have not yet had an enquiry via Craig’s List or Kijiji that has brought an acceptable application. The guests you are looking for will be looking for reputable sites to find listings of vacation homes and tend to use Craig’s List and Kijiji for last-minute or discounted offers. Let’s just say that on a hit-and-miss scale, they are mostly misses. In addition to this, scammers use these sites extensively and because of the media coverage surrounding some of these, advertising on these sites is seen with suspicion by many potential renters.

4. Taking a booking without a rental agreement
A well written rental agreement is essential for your peace of mind as well as your guests’. It records the period of the rental, check -in/check -out times, occupancy limits, pet policy as well as any other restrictions you place on a rental. It saves any misunderstanding as you can easily refer back to the signed agreement in the event of a dispute. Your ‘small print’ can go in a Terms and Conditions of Rental document that is signed along with the agreement.

5. Pricing too high….or too low
‘My neighbour rents for $2000 a week and his place is a shack compared to mine’. That may be the case, but before you rush to slap a high price on your property, take some time to evaluate more of the competition. Your neighbour may accept all-comers and easily get the money from ten 18-yr olds wanting a party venue, who don’t care they are being over charged. You, on the other hand, are probably looking for more responsible groups who will respect your property. When pricing, look carefully at what is advertised on agency and listing sites for properties in your area and evaluate the facilities and features of your competitors closely.

6. Taking the first booking that comes along
It’s exciting when an enquiry turns into a booking and you just want to grab it. Forget the fact there are 9 people and your place only sleeps 7 comfortably, and that they have got 2 dogs and you prefer to accept only one. Set your maximum occupancy levels and pet policy and any other restrictions you want to make and stick to them. You’ll feel much more comfortable turning a booking away because you haven’t compromised your decisions. And….there will always be more guests anyway.

7. Ignoring gut feelings
Sometimes a conversation with a potential guest just doesn’t feel right. The person might say something that makes you feel a little uncomfortable or they forget to tell you about a child or two in the initial application and it later comes up in discussion on the phone. The question, “How many cars can we park there?” can be an entirely innocent one if a small family is coming up at different times and may bring a couple of vehicles, however it could also mean a small wedding is planned they are conveniently forgetting to mention. If it doesn’t feel right, sound right or sit comfortable with you, it is always better to err on the side of caution and politely reject the booking.

8. Asking for payment on arrival
If you don’t take a deposit, and simply ask for payment to be made on your guests’ arrival, you run the risk of them not turning up, or arriving with a cheque you then have to clear through your bank which may not happen until they have departed. It is very difficult to ask your guests to leave and go back home if they ‘forgot to bring the money’ and promise to bring cash when you come back at departure time. Make sure you take at least 25% deposit on booking, and the remainder with enough time to clear through your account. This is standard practice in the industry, so if your guests don’t want to follow your procedures, you are probably better off without them. For very last minute bookings accept a money order sent to you by courier or expedited mail.

9. Sending keys in the mail
This was the old method of guests getting entry to the property but if you want to maintain security of your property, don’t do it. Giving guests a method of access before their appointed rental period opens up a lot of security issues — not least of which is them copying the keys and giving one to each group member. At the end of the season you could have a vast amount of keys in circulation. Instead, fit a keyless entry system, or use a lockbox, and set a new code for each guest. This way, once they have left the code is changed and they cannot use it again.

10. Supplying the barest minimum
The key to great rental income is in repeat guests and 5 star testimonials. The way to achieve both is by going above and beyond the competition. If you provide the barest minimum in the way of features and facilities, your guests will either be barely satisfied, or will complain after they leave. Expectations have risen significantly and what was seen as ‘luxury’ a few years ago, now is considered to be standard. I still hear the expression, “It’s just a rental” as if that excuses old and stained mattresses, clunky and rusted refrigerators, and grandma’s hand-made throws on the beds. This isn’t a dollar-store business — it’s a consumer driven tourism industry that is rapidly achieving main stream status as a vacation choice. It’s better to be on the leading edge of it, than in the bargain basement.

All vacation rental owners will experience a range of issues and it doesn’t take too long to get into the swing of enquiries, reservations, and rental agreements and finally, maximum guest occupancy. We all make mistakes along the way and wish we had done things differently, but each one is a learning point that just creates a better business along the way.

Please share some of your biggest learning points in the comments below.

  • Sue and Art Cloutman

    I love this blog and was compelled to write. We’ve been in the summer rental business since my parents started in the 1940’s. My husband and I took over in the early 70’s. There have been plenty of mistakes along the way but one of our biggest was not having a rental agreement until 10 years ago. It wasn’t too bad until my husband took 6 months to hike the AT which left me with the business ALONE! I don’t know if just not having a man around made people feel they could do whatever they want, but we’ve never had so much damage in cottages, so much trashing of the grounds, etc. It was nightmare! We alter that agreement almost every year depending on what we might have learned from the year before but it will always be there!
    Also, I like the comment about raising your rates dependent on what’s around you. We are going up this summer after realizing that we were among the lowest rate around and offer much more than all of them. Duh!!!

  • Marina Meier

    What do I do if the renters are way above maximum occupancy? I am a new at this, would appreciate some advise. Thanks

  • Hi Marina
    First thing…does your rental agreement limit occupancy to only those whose names you have? If not, you need to create a form for them to use to list the people in their group (with ages if you want), then let them know the agreement will cover only those people. Second, there should be a clause in your T & C that tells guests your insurance limits occupancy to a certain number and overcrowding is not permitted. Some owners would say that overcrowding could result in them being asked to leave without refund. That is a bit draconian but it works.

  • Marina Meier

    Thank you Heather, your reply is very helpful. The contract says maximum 6 but does not have names. And there are at least 12 in the house. In future I will definitely require the names and ages of people staying in the house.

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  • Thankfully our PM does a great job on points 1-9. Point 2 (listing on too many) is definitely a challenge for me. I have augmented our PM’s house listings and have had the challenge of having to remember where my home is located on the WWW. What I have done to make sure I don’t forget one is to keep a list of them. I note the address, my login info, the cost and renewal dates, person to contact.
    As for item 10 that’s where I try to excel. The other thing to consider between bare bones VRs and full service is the pre-arrival hassles: the packing of all the missing items before your guests arrive. If the departure is not easy then the time to settle in and relax will be that more stressful. In fact I just published a packing list comparison between bare bones and a full service home such as Abalone Bay:
    The Essential Sea Ranch Packing List for Vacation Rentals http://searanchabalonebay.com/vacation-tips/essential-sea-ranch-packing-list/

  • Great post. I would never and have never considered taking payment on arrival. The total amount including deposit is due at least 60 days prior to their arrival. When a party has a problem coming up with even the 2nd half of the payment which I do consider, I worry because they put themselves in the same category of people who have rented my place when I have had a fire sale which I’ll never do again. These guests are always looking for additional discounts including reasons for not paying the cleaning fee which is on the lease agreement as non-refundable. And even with that clause on the rent agreement, I was asked to make an “exception.” Always try and get the full amount well in advance.

  • Cher

    I rented my home through VRBO last weekend and was horrified to discover that the renters vandalized and stole EVERYTHING except my furniture. They broke into my locked closet and stole ALL of my belongings including my clothes, shoes, towels, sheets, pillows, comforters, vacuum, paintings, coats, dishes, bike, electronics (roku box, stereo, DVD player, clock radio, etc) literally everything!!! What was left was discarded around my house, backyard and driveway. They left food, cigarette butts/burns in furniture, drugs and urine on my mattress. DISGUSTING and had no regard for my property! They even took down my light fixtures! It is really upsetting that VRBO does not seem very surprised or apologetic and their insurance only covers $5k in damages. I met the renter and I cannot believe she looked me in the face knowing that she was going to rob and destroy my property. This experience truly makes me SICK!!!

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  • Number three on this list is a solid one and is often overlooked when in reality it’s one of the most important things! Having quality clients is huge. Great read thanks for sharing!

  • Alex Goldenville

    It is true, but you can get a “right guests” from the free listings, if you target the “right groups”, like family reunions, small corporate events etc.

  • Dana Jo Forseth Tabayoyon

    Thanks for this post! Great tips. I’m only beginning to look into the idea of owning a vacation rental (am currently renting the property on year and mtm leases), so I will be bookmarking this as I continue to do research.

    I would like to mention, though, about #10….that as an avid quilter, I can assure you that any treasured heirlooms handmade by my grandmother will not be anywhere near a rental property…and my guests should be so lucky if they were. 😉

  • There is a lot of great information here, thanks. It can be hard to find the right pricing for vacation rentals. I always feel I am shortchanging myself. Great article!

  • This has got to be the absolutely worse horror story I have ever heard.

  • If I can offer the biggest #1 killer of vacation owners is listing their property on only VRBO. You need a website as well as other venues where you market your property. I think this is a well-written article except I fundamentally disagree with point #3. Craigslist accounts for nearly 10% of my rentals, and I have had nothing but respectable up-class people from Craigslist who rent my property in Summit County Colorado.

  • Reinke Rhine Ka

    Good point about advertising on CL. I had a CL ad with the VRBO my first year and of the 15 or so bookings, none were CL. Only low ballers and scammers. I will say CL is great if you want to buy a kayak and I have used it to advertise job openings with my business with great success but no vacation rentals. There is a reason so few show up in an area compared to VRBO searches. Although the last post mentioned having your own site and that is not a bad idea!

  • Christine Stallis Woodward

    Did you get this person’s info before they booked with you like their drivers license or credit card? Did you file a police report? I’m so sorry this happened to you.

  • Cher

    Yes, I have photocopies of their IDs. I even met them in person. You have no recourse with Police or VRBO, as this type of crime is not a priority. They just tell you to take the people to small claims court.

  • mac

    what do people do with regard to stolen towels? our house sleeps 22, and we recently had three sets of towels “go missing”. Seems that this is above and beyond ordinary loss, but how do you handle it with the guests? if at all?

  • Great article, thanks for sharing.
    Apartments in Riyadh

  • SS

    I have just completed my first year on VRBO and cannot say enough good things about the experience!! I was SO aggravated with rental companies and ALL of the things that they claimed that needed repairs and the ck. given was normally less than 1/2 of the income. I grossed almost $45,000 my first year with over 33 5* ratings..I agree with all of these points given-you have to notice when inquiries slow down, keep the property TOP NOTCH and updated, communicate with your guests, send attachments so they can ask questions..I send a enewletter with info on the area and that has coupons for events-guests appreciate these little “extras” and you set the bar high for YOUR expectations too. I have not had anything stolen or destroyed, only the very best guests..I consider myself blessed, but you do have to work to make it happen and answer the inquiries ASAP, even if you have to say, “I am at the Dr. office-will get back with you in an hr.” I insist on $400 to book and then balance within 15 days of check in. Just sharing some things that have WORKED for me.

  • Nanny 54

    My insurance company just informed me that the cottage I rent out seasonally with 2 million liability isn’t any good if someone were to sue and if it burned down I wouldn’t be covered…yes they new I was renting it out seasonally and that is the reason I was told to up the liability to 2 instead of 1 million. What now? What type of insurance is needed to rent your cottage just enough to cover expenses, like taxes, insurance and maintainence ?

  • Great to hear you’ve had such a good experience. You are right that expectations are high and you have to set the bar high too. This is not for everyone and you have to go in with the right attitude and it will be successful.

  • Over the years, we’ve had a lot of towels go missing. I usually chalk it up to the cost of doing this business. I’m not sure people set out to ‘steal’ towels but may pack them inadvertently. Having 3 sets go missing is a little suspect though. If it is not a common occurrence I’d be inclined to let it go, or you could just email the guest and mention the lost towels asking if they were packed by mistake. I am not sure you’d get a response, but it may be enough to put them off doing it again.

  • cindiSue

    Most rental policies do not cover short term rentals. People should read their policies. My agent also told me for years that I was covered, but when I read the policy I found the house itself was covered (but contents weren’t covered if it was occupied by a short term renter.) But liability was not covered. I got a commercial liability policy which is designed for short term rentals. It was an additional $800 a year for $2m, and my home has a pool.

  • Kim Portenga Melendez

    We have been renting our vacation house in Puerto Rico since July of 2014. It was booked within 2 hours of listing it on VRBO and occupancy kept steadily increasing, to the point that my husband talked me into retiring with him and running the rental business there. We built a small casita for us on site, and suped up the larger vacation house to maximize the rental. What we have learned over the past year of being on site and personally meeting the guests is that 70% of the reserved party show up with more people than they disclose. We did not know that when we were 2000 miles away. We drew a hard line at 6, because the price is more than fair at that number; however, when you start adding more water for showers, wear and tear on the furniture, noise, etc., it becomes insulting that they expect the host to fund their cheap vacation. So, what we did is meet them at Check In, if they have more than 6, request and receive $25 pp/pn. We don’t treat them harshly, suspiciously, or unwelcoming, it’s just a matter of business. Never have we had one party leave, they make it right, right on the spot. The highest party has been 9, but especially during peak season/spring break, we are counting on parties showing up with more than 6. I disclose on the listing site that the price is for 6 only and $25 pp/pn for overage, and owner reserves the right to check and confirm amount of guests in rental space.

  • cavendish

    We are just getting ready to put a house on VRBO, so very new to this… What are the “rules/laws” for putting a camera at the exits?

  • Cher

    VRBO also charges extra fees in the event something goes wrong. Their insurance is fake because people have to admit to any damage or theft for those damages to be covered by the insurance. Good times. A year later I am still dealing with my homeowners insurance.

  • MikeVolpe

    We love using Vacation Rentals, but I’ll agree. You definitely need to read reviews and your contract VERY carefull!

  • Candlelight53

    Hi, we have just opened our suite downstairs to vacation rentals and have our first guests coming tomorrow. I am very concerned that our family will make too much noise for our guests. When I’m in the suite I seem to hear everything going on upstairs etc. Is that expected and normal. Any opinions?

  • Lisa Smith

    Look into Proper Insurance Company. We use them for our vacation rental business and have been very pleased.

  • Michael

    Anyone knows how to get higher on the Booking ranking? I’ve been in this business for 6 months, I’m on several sites such as Airbnb, Booking, Homeway etc. On Airbnb i’m pretty high in the ranking, maybe also because i’m a superhost and I got the maximum score, but on Booking although I have and unbelievable score (10 out of 10 based on 36 reviews), I tried everything to get in the first three or four pages but I can’t. In addition to that i’ve the right price, wonderful photos, and great location! I’ve implemented every advice the Booking call center gave me but still with no results. They always say the same things and They’re not capable to give me real pratical stuff. Seems like it works randomly sometimes. No one is capable to give me explanations on it. Someone has done it? What strategies did you implement? Looking forward to an answer.
    Thank you very much

  • Sal

    Hi. I’m looking for advertising purely to list my properties , not looking for any commission based ads as I do all my own bookings through my own web site. Since Owners Direct and Holiday Lettings have prioritised the commissioned based properties my enquiries via their sites have dried up. Owners Direct use to be really good but now in a search for my specific village I’m showing below other properties located in other villages in the area! Any ideas?

  • Miss SuzyQ

    I have a problem with decor items, decorative pillows, blankets, things that are obviously not owned by renters disappearing. It has been worse this year than any other year…plus we utilize a property manager since it is cabin

  • Take a full set of photos that show all your decor items, pillows, blankets etc. Not so much specifics of inside cupboards but more of whole rooms. Then you can put them in your Welcome Book with a note that is helpful for them to replace furniture they may have moved, or decor items they might put out of reach of kids. This serves two purposes – your guests can see you have record of all items, and they have a good reference as well for checkout.

    For your property manager, use this within the Properly App http://www.getproperly.com

  • Sal – check out Perfect Places http://www.perfectplaces.com/ This has always been a favourite of mine. Another idea is to think about creating a collaborative website with other owners on the Rentivo platform. http://Www.rentivo.com

  • I’ll be talking to Booking.com reps at VRMA Europe in March and will ask the question.

  • Michael

    Thank you very much. Looking forward to hearing from you soon.
    King regards Michael

  • Miss SuzyQ

    Thank you. Great idea.

  • Harry Jones

    https://www.findarentals.com/ Here is the website I have found on the internet and I have listed my property in Galveston,

  • Harry Jones

    https://www.findarentals.com/ Here is the website I have found on the internet and I have listed my property in Galveston,

  • Harry Jones

    https://www.findarentals.com/ Here is the website I have found on the internet.

  • Desiree Moreno Quintana

    Be careful everyone VRBO AirBNB if you get a reservation an the VISA is stolen, they stay in your house steal from yo than you have to pay the money back and their fees back! VRBO and AirBNB let anyone book a house!

  • Chesie Roberts

    Hey we are buying a house in Seaside, Florida. I would love it if you would write a blog on your knowledge and how to be successful with vrbo! Let me know please!

  • Ana Banan

    Get a $500 security deposit in addition to the 1/2 rental up front upon making a reservation. You can return the deposit minus what is taken/damaged/broken but how you will inspect property and communicate blame for missing/damaged/broken items will require you provide proof with dated/documented pictures and signed acknowledgement of inventory at the start of each renter’s rental period and what was inventoried at the end. It may not be the renters but their guests or their kids leaving things outdoors, taking to beach/etc. – or it may be cleaning crew not restoring what they launder. You may have a hard time proving who did what so the rental contract must include that the renter is responsible for the (list of contents) and the condition of the items during their stay.

  • Ana Banan

    I know with traditional renters (mtm) you can hit their credit report when the renter damages the property and leaves without paying what they owe. You need a police report to file your insurance and report the theft/vandalism/drugs found on scene. I would talk to an attorney to see what your options would be against the individual. Still file a crime report with the police – it makes it a record attached to that person’s name. You can also post pictures and make statements naming names via the internet that would not be slander if true.

  • Ana Banan

    I would honestly expect this will start happening more frequently – think about it – it’s not breaking and entering but allows those who are granted access for the cost of rent to, at their leisure, plunder the entire estate they are given access to. I would think the only thing people could do involves discreetly placed home security cameras that can prove what happened despite not preventing it.

  • Miss SuzyQ

    Using a property mgr and have proposed they do this. They are resisting
    In past, I’d mention it and nothing happened. After this last time, I document and all for reimbursement from property manager.

  • Miss SuzyQ

    Great advise…now any suggestion on how to get the property manager to do this? It’s remote so we depend on them.