It is a Brave New World out there for the vacation rentals market.
Sites like VRBO can set you up as a destination landlord. Sit back and watch the money come rolling in, but there are issues and concerns.
More and more people are turning away from hotels and anything still around called a ‘Travel Agency‘. They are using sites like Airbnb and Vacation Rental By Owner (VRBO) to navigate the waters of where to stay when you’re away from home.
My experience with VRBO has been an overall positive one and I feel the business model is destined to grow.
Sites like VRBO allow you to tailor your stay to your specific tastes and needs. You are partnered up with a person who is usually very motivated to please you, in exchange for your money.
Step 1 with this particular side hustle income stream, is to have a place that you can rent out. Big first step, I know. It also has to be someplace people want to (or have to) go. Lastly, it has to be nice or at least clean.
VRBO’s computer setup time takes about 20 minutes for a rough draft. You will fine tune this while you learn what ‘descriptions’ and ‘pictures’ lure the most
suckers customers to your shithole little piece of paradise.
Take some time to write up the space and its amenities, keeping in mind what they will want to hear. Play up your advantages and decide what to do with your short comings. Admit and minimize or leave out? I am completely honest because I spent $58,000 getting the place into great shape.
Spy on your neighbors entries in the same sites to get an idea on rates. Too high and you will not get any business. Too low and you leave money on the table. I would encourage ‘Seasonal Rates’ because most places fluctuate in terms of traffic and things to do.
That FIRST PICTURE needs to be a prize winner.
This is what draws them in to find out more. I use a lovely Sunset shot over the lake from the outdoor patio, it could win a prize and has brought many flies to my web.
You also need to assemble a trustworthy crew. I do not live near my rental. So I need at a minimum a cleaning service and a handyman on standby. This is easy enough to find in a tourist town.
There are plenty of reliable folks looking to make some money on the side as your cleaning person(that’s their side hustle gig). A handyman is used far less often, but needs to be available as your first line of defense. I pay and tip my people well, they are the core of a smoothly running operation.
Now for some of the parts I like least about this racket.
The modern world belongs to the customer. Back in the day, you could part ways with a difficult customer and the most harm they could do was to tell a couple of their friends not to stay at your place. Boy did the internet and social media change that for all times.
Fast forward 10 years and one bad review can sink all of your hard work.
I always acquiesce to my renters needs no matter how inappropriate because I fear that ‘2 out of 5’ star review. Dealing with a jerk is finite and will pass from memory, a bad review will linger and affect your account for years to come.
I take my time answering all the questions someone has before and while they are at the house, it is just part of being a good host.
This is upside down, but a fact of life in the Age of Yelp and the ‘Customer Review‘. This is the face I make when I read that you “could have used more hand towels, but I guess it was alright.” Or that you “wished the weather had been warmer” like that is my fault and I somehow deserved to get dinged for it. Roar.
Someone could start a whole website for dumb comments from customers that were demanding stupid things. Landlords and Managers could console their simmering rage by collectively calling these customers bad words.
The simple fact that you do not LIVE there will cause problems. Renter shows up and the power is off. This is your problem not theirs. I am anxious the first hour or two after I know new people have arrived. I am just waiting for that call to tell me what is wrong.
Don’t get me wrong, overall renting out our vacation home has totally been worth it. It is good for a house to be lived in during the cold months (skiers and fishermen). And a house that makes you money is way better than a house that costs you money.
I personally use VRBO for some specific reasons.
At this time, Airbnb reports income to the IRS and VRBO does not. I prefer to do my own taxes thank you very much. Airbnb also does last minute bookings and one night stays. I need more leeway than that and it does not make much sense after I pay for a cleaning to let someone stay for less than 3 nights.
I assume Airbnb will allow you to set preferences for more notice and longer stays, but I think clientele looking for those perks drift towards Airbnb. Whereas, VRBO is more for the long range vacation planner looking to stay a week or so. This fits my place better.
This appearance of the small scale lodging industry is here to stay. For awhile it seemed that the Hotel Lobby was going to wine for laws to push back against all your neighbors renting out their spare bedrooms. But, too much money is pouring in. Not only for the homeowner, but for the business the ‘guests’ are going to while they stay.
I suspect this model is the new way of traveling and if you can get in, get in.
What does VRBO cost you? As a guest, they tack on a service fee. It is calculated on a sliding scale of 4% to 9% of the rental amount. A host pays a subscription of $400 per year. I also pay a fee for VRBO to handle credit card transactions for me.
Abandoned Cubicle has a great checklist for AirBnB/VRBO stuff.