In episode 4 of the Selling Derby City podcast, we break down the host responsibilities for short-term rental properties. We cover everything from the fees to have properties on sites such as Airbnb and VRBO, to the day-to-day management responsibilities that are required by the host. Now, this episode is a two-part episode. So be sure to listen to episode 5 right away as we talk about self-hosting versus management and determining which option is best for you. But before we dive into everything, Justin shares his chicken wing necklace that was sent to him from a fan as a gift.
If you've missed Justin's obsession with all things fried chicken then check out the Selling Derby City YouTube show. Justin has a particularly memorable moment where he shows his love for chicken and chicken wings on camera.
Now, let’s dive into the key takeaways from episode 4.
“The operations consist of many different moving parts. We've got calendar and rate optimization, channel and distribution and management, repairs, cleaning and linens a whole multitude of things.”- Justin Reid
Calendar and Rate Optimization
Justin begins by breaking down how to manage the calendar and rate optimization for short-term rentals. Because markets are different across the board, you need to make sure that you know:
Events that take place throughout the year
What draws people to your city
This will all help you with determining your rates, when to lower and when to mark up prices, and when to offer a small discount to draw people in. Keep in mind, offering a small discount will help you stand out against competitors. It's also important to keep the seasons and geography in mind when determining rates for your short-term rentals.
Channel Distribution and Management
Next, we dig into channel distribution and management on sites such as Airbnb, VRBO, Expedia, booking.com, etc. We want to share how you can focus on your visibility in the marketplace.
One thing to keep in mind is to not put all of your eggs in one basket. Outside factors, such as neighbors reporting your property, can remove your listings off of sites. So it is important to list your properties on more than one site. We recommend using both Airbnb and VRBO because you can sync your calendars together.
“If somebody books on VRBO, that's going to block your calendar on Airbnb so that nobody can book and vice versa. So it makes it very easy for the operator to be on two platforms, but not have additional management operations that need to happen on the calendar and the rates.” -Jonathan Klunk
“Whether you have one property, five properties or 15 properties, it just makes the most sense to use both of those platforms because those calendars do integrate together and it's all about exposure too. You don't want to just limit yourself. So I think that that's just a given. You should always use those two platforms since they kind of go hand in hand.” -Justin Reid
Now let’s break down the fees to consider for listing your short-term rental properties on these sites. There are fees for:
tax remittance to city and state (tourism/bed tax),
Channel Charges - Airbnb 3%, VRBO 5%, Booking.com 15%
Because the fees vary for listing your property on different sites, Jonathan explains the importance of adjusting your rates accordingly to offset those fees.
“Booking.com has a 15% fee that they normally charge to the host. So you'll want to make sure that you're able to increase your rates by about 15% in order to offset that. Airbnb, it might make you less competitive on Airbnb if you use the same price that you would for booking.com. And if you use your Airbnb price on booking.com, you're going to leave some money on the table because you have additional fees or a cost of doing business, essentially.” -Jonathan Klunk
Repairs and Maintenance
This ties into our next discussion on rate optimization and keeping in mind repairs and maintenance that will take place on your property. Justin gives several examples of different repairs and maintenance items to keep in mind to include in your rates. These repairs and maintenance items include, but certainly are not limited to:
Internet goes out
HVAC / Water heater
Guests damage the property (some things can wait, others cannot)
Clogged toilets (some properties have only 1 bathroom)
These things do happen and no one is at fault. But the guest will point fingers at the host. So just get ahead of it all by being prepared, accommodating, and understanding to your guests.
“This is not the time to find the people who can come out and help you, the 24/7 people. So have a list of all of those that you want to call and have your relationships in place. Because your speed to be able to resolve these issues is going to help the future marketability of your property, via the reviews.” -Jonathan Klunk
In agreement, Justin says, “the smallest thing in the property could ruin a guest stay. So you want to make sure that the property is always in top condition ready to go. And that just goes into a kind of seasonal maintenance too. Things that you want to do on a regular basis.”
Cleaning AND Linens
Now onto everyone’s favorite part of the conversation for short term rental properties:
CLEANING AND LINENS.
“This is the most important part. It is the most frustrating part. It is sometimes the hardest part to really figure out and streamline and just make it flow smoothly,” - Jonathan
It is so important to have more than one cleaner in your back pocket.
“There are times where people are going to get sick. And is it going to be you that cleans the property? Are you going to leave your full-time job to clean the property between the hours of 11:00 AM and 3:00 PM, the check out and check in times. What do you do in those scenarios? So it's great to have more than one cleaner to assist you with that.” -Justin
The same goes for your linens too. You want to have multiple sets of linens per bed in your house. Jonathan gives an example of why it is best to have all of those linens cleaned off-site.
“So, let's say that you have a house that has a washer and dryer in it, but you have four bedrooms.So four sets of bed linens and all of those guests. That's between eight and 10 guests that you could have. And you have all of those towels. There's no way all of that's going to fit into one laundry cycle. So you're going to have two sets of linens that you have to wash and then dry, and the drawing takes the longest. I mean, your cleaner would be there from checkout until almost check in, just waiting on those linens.”
In order to lessen your stress, Justin suggests, “that you have 3 sets of lines for every bed and bathroom. You want to do that so you have something clean that's in the property, something that's being laundered, and something that's sitting on the shelf ready to go for the next cleaning. Same for quilts or comforters. I think there should be two per bed.”
What is the best and cheapest place to purchase linens? Great question! We suggest Costco for bath linens because you can buy them in bulk in-store or online. For bed linens, we order Utopia Bedding from Amazon. They are comfortable, inexpensive and more importantly, the guests love them!
Quality Control and Inventory Management
Along with cleaning and linens, this brings us to quality control and inventory management. You can have your cleaning company do inspections and keep a list of inventory. Justin breaks down two different options for restocking inventory on your property site.
“What we provide to guests are basic soaps and paper products. Again, hotel-style amenities. And what we try to do is if we have a place on-site to leave them, that's honestly the best option. It's easier to access them while you're already onsite cleaning. That's what I prefer and suggest. Get you a small little closet that you can buy at Lowe's or something. Stick it somewhere, lock it up, and then only give your cleaners access to that. And another scenario, you can have things packaged up in a basket, ready to go in your car, show up and unload it.”
Some other inventory items to keep in mind may include:
Make-up wipes (this will help keep your linens from staining and getting dingy)
Now onto the most important thing to talk about in our industry and that is guest communication. Imagine yourself texting with a friend, but leave them alone, and do not bug them while they are on vacation. Justin shares three tips for communicating with your guests:
Set the tone- reach out beforehand and build a connection. See if there is anything that they need for their stay that you may not offer, within reason. They will feel like you care about them.
Checking in- at 9:00am the next day, send a simple, quick message saying “I hope you had a great first night. Please let me know if you need anything.” Again, this just lets your guests feel like you care and are available to them.
Before check out- reach out and ask simple questions like, “how was your stay?” “Is there anything we could have done better?” This will get ahead of any animosity so they tell you now instead of in a review.
Some other things to communicate with your guests about are FAQ, parking, early check-ins, late checkouts, assistance with operating the TV, late-night lockouts, etc.
One very important tip to prevent a late-night lockout, because believe me, you do not want that phone call at 3:00am that your guest is locked out of the house or doesn’t know the combination lock!
“Always make sure you have a physical key to the door in a lock box near the front door. I mean, even if you have to use it once, it is worth doing. Put the code in there. And if anybody ever says the battery is dead, direct them over to the lockbox to grab the key so that they can open the door just until you get there the next day to change the battery. And alongside that, make sure that you don't install an electronic lock that does not have the key feature because there are some out there and then you will have to call a locksmith.”
Next, we cover a few miscellaneous tips on guest communication. First off, sometimes guests refuse to check out or leave. Jonathan explains that the first thing you want to do is contact the site that the guest booked through (Airbnb, VRBO, Expedia, booking.com, etc). The guest might be non-responsive or it could even be something as innocent as their alarm not going off. By contacting Airbnb, will cover you and your review regarding that particular guest.
Otherwise, you just have to wait it out. You do not want to call the police and draw attention to your property, especially if you already have sensitive neighbors. Plus, a lot of police are told not to deal with short-term rental properties. In this case, by already having a relationship established with an off-duty police officer, you can have them drive to the property and see if they can assist with getting your guest to leave the property.
Another miscellaneous tip on guest communication that has been discussed in previous episodes, is having Noise Aware to monitor the decibels in the house. Remember to first set the expectation of when quiet times begin. Also, let your guests know that this device is in the house. Inform them that it isn’t recording their conversations, just the volume that they are at.
Weekly garbage and lawn care is another miscellaneous tip that falls under guest communication. Jonathan explains the importance of having garbage pick up and lawn care set up on auto-pay and to occur on the same day each week. This way you can communicate with your guests as to when to expect these things to occur.
“You want to put those on auto pay, set them and forget. And if you change your credit card or your bank account, please be sure to update that. We do have lights going out, water going out on guests only because of a clerical error, with the payment for your utility company. So take as many headaches and question marks out as possible.”
You definitely want to stay on top of the garbage and overgrown lawn, which can happen because of holidays or severe weather. It is all about first impressions.
“Automate as much as possible so you can set it and forget it and have very few headaches and get those five-star reviews.”
We enjoyed sharing our expert tips with you on host responsibilities.
Remember, this is a two-part episode. So be sure to listen to episode 5 to determine if you want to self-host or hire a management company.