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I'm planning to retire from my day job (well, it's really a day AND night job) this summer, and am trying to figure out what's next for me. I currently own a vacation rental on the ocean and have really enjoyed the whole business, from improving my property to make it very marketable to advertising and meeting guests and, of course, making money. My husband is urging me to consider turning this "hobby" into a real business, but I can't afford to buy more homes, so I'm thinking of finding other properties that I can manage for other people.
So, how did you get started in the PM business? Do you have your own property for rent as well as properties that belong to others? How did you find homeowners to work with? How many houses can you manage comfortably on your own? How do you work with an owner to improve the appearance and marketability of a property, or do you just try to rent it "as is"? Any other pointers would be welcome.
This isn't the type of 'retirement' I would have in mind for myself in future years as it is a LOT of work, though I'm sure you could enjoy it and find the challenge to be an invigorating opportunity to experience new things.
It is good that you have had some experience managing your own vacation home to start with, so at least you know a little about what you may be getting yourself into. I think it is important to truly learn how to maximize all the opportunities for making your own vacation rental the best it can become before venturing out to manage other properties. Use your own property as an opportunity to determine what works, what doesn't and how you want to be able to help other owners that wish to rent their properties as vacation rentals.
There are so many different ways you can go about doing things, just like anything else, so I would suggest taking some time to do research on other vacation rental management companies in your area. Learn about the applicable real estate restrictions, if any, relative to short-term/long-term rentals. Understand as much as you can about the market, about the demand, the seasonality and so on. You may already have a great grasp on those things and, if so, then you are off to a great start.
In my opinion, a successful vacation rental management business needs to be approached with the same level of seriousness and commitment that any other business undertaking would merit. While it does not require much capital to get started in this industry, the quality and type of service rendered by the various individual managers and large management companies will vary dramatically, depending on what services they offer, what commissions they charge and what responsibilities are deemed to be the owner's and what expectations they have of the managers.
My experience has been that having a keen attention to detail and an ability to organize the business well around technology, systems, processes, procedures, checklists and so on, are crucial to the success of the business, not to mention your own sanity!
Before you head out to acquire your first owner client I would encourage you to take several hours (or days/weeks) to flesh out specifically how YOU will do things, what YOU bring to the table, how YOU will help them and what differentiating factors that you bring to the table in this regard.
There will always be other owners out there that 'wish' they could do what you are doing with your property, but they just don't know how, or perhaps don't have the time or interest to do it on their own. Those are great people to find, if you can.
I'm no expert on this, but what I am getting at is that you need to put some processes and systems in place that you will be able to rely on and count on to produce results for your property and for those of your future clients. Our technologies, systems and processes have literally been in a constant state of evolvement over the past several years as we started our business with one of our family-owned properties, added another, then another and grew from there.
We are still very small, but we have gone from 'free and basic' systems for our business to 'paid and advanced' systems and processes and have seen huge improvements made in terms of the amount of time we need to spend to acquire and process each reservation.
I'll do my best to specifically answer some of the questions you posed in the last paragraph of your post. I'm sure there are many others on this forum that manage more properties than we do that could add much deeper insight on this subject.
How do you find homeowners to work with?
I've asked that question to a number of highly successful VR management companies and it often comes down to the statement "success breeds success", or in other words, as you do really well with what you currently have, you will find owners drawn to you. Part of that is that you do need to get out and network and let people know what you are doing; or hoping to do. We've done some direct mail invitations to some owners in targeted areas where we manage property, or wanted to manage property. It is a good way to get the word out, though it may take some time to see the results from that. Others would contact homeowners directly based on finding their home and seeing it as a great vacation home option. If they don't currently rent it out and it sits vacant much of the time then all the more reason to help them bring in some rental income from it.
How many houses can you comfortably manage on your own?
The answer for this one is definitely "it depends". It depends on what systems, processes, software and technologies you are utilizing. If you are jotting things down on a notepad and making notes on the booking calendar hanging on the wall then you will be limited to less than a handful of properties at the most. If you eventually implement a reservation software, accept all credit cards, have an online reservation system, email templates, accounting software, CRM software, specific checklist of what needs to be done for each property...then you could manage many more.
However, due to the level of detail required to successfully manage even one property, even when using the most advanced systems available, there is still a significant human element necessary to coordinate and schedule cleanings, to answer the phones, to enter reservations, to input accounting data, to send notifcation emails or reservation confirmation documents. I was able to manage about 4-5 properties on my own, even while holding down a full-time job, but that was tough AND I was utilizing every piece of free technology and software that I could get my hands on. Since that time I have deployed multiple paid software applications like LiveRez, QuickBooks Online and iContact in order to more effectively manage our business and also to establish a scalable business structure that we could use to grow to 50, 100 or 500 properties. It is not my intention to get that big, but a goal of managing 50 properties is really not out of the question once you implement the right systems. At some point you need to hire reservationists and will always be using cleaners, maintenance personnel, depending on whether you choose to go the Independent Contractor or paid Employee route.
How do you work with an owner on improving their property....or just rent it as is?
Again, this is something that is entirely up to you. You can take things "as is" and work on improving them over time or you can require that a certain standard or level of quality must be adhered to before you will even take the property on. When it comes down to it, the property doesn't have to be newly furnished and have all the latest and greatest gadgets in it, but it does need to be complete.
By that, I mean each room needs to be adequately and completely furnished and appointed. If there are common items missing from the kitchen drawers that the average guest would likely be looking for, then it is incomplete. If there is an alarm clock in one room, but not in the other two, it is incomplete. If there is only 1 set of linens for each room, it is incomplete.
There is a minimum standard level that needs to be set to ensure that you can successfully do your job: which is to market and rent the vacation home and give guests that best opportunity to have a positive experience. It does not do you, or the owner, any good if you prematurely put a vacation home on the market only to have each guest leave dissatisfied and unhappy with the overall experience due to staying in an incomplete property. They could then leave negative reviews and you would have a steep uphill road to climb to remedy that situation. I like to walk through a property and make note of everything that I think needs to be done to get it ready to rent. Before I even get to that point though I email the owner a list of the very basic starting point for supplies and amenities. I think HomeAway may even have a document like that somewhere on this site.
Any other pointers would be welcome.
Be flexible and open minded to the opportunities available in this industry. We ended up also starting a cleaning company as a result of our vacation rental business. We had managed over 300 property cleanings in a short period of time so I figured, why not?! Learn all you can and find out how others are doing it in your area. After you manage 5-10 properties, try to join VRMA as there is a wealth of information you can glean from that association. A lot of this depends on what your goals are. If you want to manage 5 properties you can probably make that happen pretty well without having to do a lot of fancy bells and whistles. If you want to manage much more than that though there are a lot of things that can and should be done in order to maximize the opportunites.
There are so many different things you can do and so many different directions you can go with this that I think you need to focus in and determine what you want to do, how you want to do it, then map out an inital game plan to make it happen. As you start to branch out you will likely make constant revisions and improvements in order to adjust to better meet the needs of your clients. If you can deliver a service of great value to them, then you will be rewarded and they will be happy.
It's a lot of work, but for the right person with the right mindset, it is fun and rewarding!
Good luck to you in your future endeavors!
Thank you so much for your thoughtful reply. Obviously, this is not a business for an amateur!