Getting Started in Vacation Rental Property Management

There were over 1400 attendees at the national 2017 Vacation Rental Management Association Conference in Orlando – the largest gathering of property managers in VRMAs history.

What struck me the most was the diversity of companies, with representatives from the largest – Vacasa in particular – to individuals who had less than five properties under management. I spent some time talking to a potential manager who had no contracts at all but was there to learn all about the business.

Although the breadth of information presented in the breakout and general sessions was of the highest quality, there was little practical help for those at the start of this journey, and it got me thinking about the beginnings of my property management company, and what would have been helpful at that time to set us on the path to success.

Unless you are buying an already established company with all its systems, procedures, marketing processes etc., in place, you’ll probably be kicking off with just your own properties and maybe a few others. That’s how most property managers start.

For me, I had three of my own places, my sister’s vacation home, and a property owned by a neighbour who was willing to give us a try but didn’t want to pay any commission until we’d proved we could bring him a decent amount of reservations. That was a modest start by any means and in fact, we can take as much rental revenue in a day now as we did in our full first year of business.

After 15 years I can reflect back on the humble beginnings and see the mistakes we made, and how we could have been successful so much earlier than the point we actually became profitable.

If you are in that position – either considering launching a new property management business, or you are already managing some homes but feel like you are fumbling in the dark, here’s some pointers to help you one your way to success.


Goals, Mission, Vision…and the Why?

You have to know why you are doing this, because it’s not easy. What are your core values?

For a start it’s important to know the history of the industry; how far it’s come in a short space of time, and what the future holds. The general consensus from the experts at the VRMA conference was that there is still a future for property managers providing they are ready to adapt rapidly to the changing vacation rental landscape.

Getting into the business with fixed attitudes about what will work and what won’t is unlikely to be helpful in the long run.

Your goals should incorporate the size of business you want to be; the number of employees you will have; the reach of the business i.e. the boundaries of the location; your values; your vision of the company in five, ten and twenty years, and your exit strategy. Yes….you need to think at the start about the end-game, because in part that will define your growth strategies.

If you don’t know where you are going, how will you know when you’ve got there, or if you’re achieving your milestones?

 

Competitive Analysis

It was a lot tougher to get information on competitors 15 years ago. Technology has made it easier to get data on their web traffic, backlinks, page ranking and SEM tactics, while occupancy and rates are easily accessible on OTA sites.

Employing a ‘secret shopper’ to collect information on how they are attracting new owners, what incentives are being offered, the commission being charged, and their unique value proposition will help you map out a strategy to compete.

Create a spreadsheet with columns for number of properties, nightly rates per unit size; peak, low and shoulder season occupancy rates; listing sites used; commission rates; and comment on any niche variables you find.

 

Find Your USP

With thousands of property managers vying for available properties, you have to find your unique selling point – the edge that will have owners coming to you instead of the competition.

There’s always a temptation to take on anything and everything at the beginning, just to bolster inventory, but deciding to specialize in a particular market could be as effective.

Some markets to consider are pet friendly, family friendly, luxury, accessible properties, corporate markets. You can become visible quickly in a niche market.

 

Invest wisely in systems 

With such a vast choice in property management systems, take your time in making the decision. If you’ve spent time setting your goals for growth, you’ll have a good idea on the type of system you will need.

Don’t make my mistake of underestimating the size of company you will become, or you’ll be changing property management systems at a time when you should be settling into the full capability of a system that has been with you from the beginning.

Listen to my chat with Terry Whyte on Episode 198 as we explore best practices in selecting the right PMS.

 

Document Everything!

Perhaps you are a one-man band with your own properties and you know your processes inside and out. When you start to grow and take on third party properties it may be some time before you hire your first employee, but when you do, you’ll have a lot to teach them.

If you haven’t documented the systems and procedures yet, start a Systems Manual today. List all the platforms you use, and write a summary of why you use them and the benefits they give to your business.

Then create a user manual, or at the very least, write a list of links to online tutorials.

This will make it super-easy for another person to come on board and learn how you do things in a systematic way.

Property management isn’t for everyone. Managing your own reservations, operations and guests is one thing, doing the same for a third party is something else.

From dealing with one client group – your guests – to working with a second group – your owners – is a leap not everyone can make successfully.

If it’s something you are thinking of doing, make sure you get your ducks in a row before you start. That way, the path to success will be easier.

Download the Document Checklist that lists all the elements you will need to have in place before you take the plunge. Getting these created and organized ahead of time will save on a lot of work later on.


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