Managing a short-term rental property is a lot of work to do on your own. From booking to cleaning to troubleshooting issues with guests, it’s nice to have some help along the way. Many homeowners are now deciding to partner with a rental management company.
But the decisions don’t end there—when choosing between rental companies, you have a lot of options. It’s important to look at each company’s strategy and consider what that means for you, your property, and your guests. We’ve outlined the three main rental management strategies below.
Best for: homeowners who want consistent monthly income.
The fixed strategy allows the rental company to promise the homeowner a certain amount of revenue per month, no matter the number of bookings that month. The rental company pays you this set amount, then takes the rest. This means that you’ll make the same amount in the slower off-season as you will during more popular months. Overall, homeowners don’t maximize their monthly revenue with this strategy because they don’t receive the benefits of major spikes during the on-season. The scope of services provided by rental companies using the fixed strategy varies, but in general it is not comprehensive. The homeowner is often required to take care of services like guest correspondence and solving problems during a guest’s stay.
Best for: homeowners who want their monthly revenue to reflect booking trends.
The commission-based strategy involves the rental company taking a certain percentage of every booking. This amount depends on the company and location, but typically falls between 20-50%. Using this strategy, the rental company and the homeowner experience highs and lows as a team. When there are more bookings for a certain month, everyone benefits. If you decide to go with a rental company that utilizes this strategy, it’s likely that a greater range of services will be covered than with the fixed strategy. However, you may still be expected to coordinate services such as cleaning, maintenance, and restocking the property between bookings.
Best for: homeowners who want to maximize their revenue and minimize their workload.
The turnkey strategy is for homeowners who want their rental company to handle all of the tasks that come with maintaining a short-term rental property. Sometimes used in conjunction with the commission-based strategy, the turnkey approach covers all aspects of a booking, from answering initial inquiries to check-in to troubleshooting to turnover. Many homeowners who live out of state or frequently travel abroad choose this method while they’re away. Others live down the street and want a more hands-off approach to hosting. Although this strategy can be more expensive, the additional monthly revenue gained and the peace of mind that everything is covered makes it well worth it.
We handle every detail of your rental so you don’t have to. Click here to see the full list of services offered by Effortless Rental Group.
The short-term rental industry is booming worldwide, and Colorado homeowners are enjoying the profits. Airbnb hosts in Colorado made $183 million in 2017 alone, a 68% increase from the year before, according to The Denver Post’s recent article.
More properties are listed on Airbnb and other popular rental sites like HomeAway and VRBO every day. But with more properties comes more competition, which makes it crucial that your home stands out. Take a look at our list of amenities to add to your home to make your listing shine and enhance your guests’ experience—meaning more 5-star reviews for you.
1. Recreational items appropriate to your area
If you live across the street from a park, include some Frisbees or a croquet set in your home. If you’re close to a river, kayaks or inner tubes are great additions. Guests will choose your property over others because of nearby sites and attractions, and will appreciate that they don’t have to buy or rent equipment to enjoy these areas.
2. Modes of transportation (or information about how to get around)
Many of your guests will arrive without a car, especially if your home is in an urban area. Having bikes on hand will allow your guests to easily roam. Cheap bikes from Walmart or Target will do the job. If you can’t buy bikes, at least provide some details about how to get around in your area. Check out our article on exploring Denver without a car for some ideas.
3. A stocked kitchen
This goes beyond simply having dishes and utensils. Make sure that your kitchen is stocked with other essentials like olive oil, spices, and balsamic vinegar. Add a box of pasta and your guests will have everything to make a quick meal—especially useful for those who arrive late at night. If there’s a food item that’s local to your area, it’s a nice touch to include that, as well.
4. Ways to access attractions nearby
To go above and beyond, leave some tickets or passes that allow your guests to visit spots in your area for free. This could simply be a library card for renting books and DVDs, or something a bit more extravagant like free tickets to a museum or an access card for a rec center. This is a great way to use the free guest passes that come with many monthly memberships.
If you have any of the above amenities in your rental property, be sure to list them in your property listing. These items will not only attract prospective guests, but will also make their stay in your home the best it can be (great for them) and inspire them to write you a 5-star review (great for you). You’ll have that Superhost rating in no time.
It takes practice to be a successful short-term host, from creating eye-catching property listings and making the most of your space, to interacting with guests from booking to check-out. Take a look at our list below for some common mistakes made by hosts, especially those just starting out in the short-term rental world. With some experience, you’ll be on your way to stellar host status in no time.
#1. Having limited ability.
Many first-time hosts devote only part of the day, like before leaving for work, to addressing guests’ issues, questions, or requests. But a maintenance problem or other issue can happen anytime, day or night, and delays in responding to these requests (especially in cases of emergency, like a pipe bursting or roof leaking) can lead to a bad review and potentially a dangerous situation. Guest Experience Coordinators at ERG are available 24/7 to help address anything that comes up during your guests’ stay. Whether a guest reaches out about needing fresh towels or something more serious, we respond quickly to get things back on track.
#2. Not optimizing your space.
You don’t need a lot of space, but you should efficiently use the space that you do have. Make use of spare rooms and empty areas by giving them a purpose: install drawers in the space under the stairs for more storage, or turn the corner of the living room into a cozy reading nook. Have a large backyard that goes mostly unused? Get some benches and turn part of it into a fire pit area. Small touches like these will make your listing stand out from the rest, which will get you more views, bookings, and positive reviews.
#3. Representing your property incorrectly.
Your listing is the key to attracting guests, so it’s important that you optimize it to include relevant descriptions about your home and high-quality photographs that feature its best qualities. Try to showcase the details that make your home unique, like a deck with skyline views or a game room in the basement that’s perfect for entertaining. One of the benefits of a partnership with ERG is a fully optimized property listing. Our professional photographers, interior designers, and writers are dedicated to presenting your home at its best.
#4. Not keeping up to date with local regulations.
This common oversight can cost you in the long run. Cities change their regulations for short-term rentals all the time, and it’s important to stay updated—or risk a steep fine and possibly your ability to rent in the future. Your city should have a short-term rental page on its government website with all of the info you need to apply for permits and learn about guest allowances, taxes, and more. Pay close attention to the information your city requires you to post on your listing, like your Business File Number (BFN), to remain a valid host.
#5. Underpricing or overpricing your property.
Most hosts on short-term rental platforms like Airbnb and VRBO are incorrectly setting their nightly prices, and therefore sacrificing number of bookings, monthly revenue, or both. It can be tricky to correctly price your property while taking into account important variables like local events, hotel occupancies, and travel trends. ERG’s analytical pricing matrix considers these and many other variables to set rates that get you more bookings over multiple platforms, including our own exclusive platforms. We use a flexible pricing approach—not a static one—so the prices we set change based on day of the week, seasonality, weather conditions, and more.
#6. Not understanding the ups and downs of short-term rentals.
Every investment property makes more money during certain times of the year and less during others. Maybe there’s a summer festival in your town that attracts a lot of travelers, and the rest of the year is relatively quiet. Or if your home is in a region that sees sunny skies only a few months of the year, you’re likely to have a surge of guests at that time. It’s important to recognize that these fluctuations are normal and not get discouraged. Focus on ways to attract guests in the slower months, like a lesser-known event nearby or renovation projects that will make your home stand out year-round.
#7. Cleaning and maintenance slip-ups.
Two of the main reasons for negative reviews are oversights in the cleanliness of the property and delay or failure to fix something that’s broken. It’s crucial that you have cleaning and maintenance experts who you can trust to prepare your property before every booking. ERG’s professional cleaning company keeps your property looking immaculate after every check-out. If any repairs are needed, our maintenance team resolves the issue quickly and efficiently. We make sure that everything is in pristine condition when your guests arrive—every single time.
A partnership with Effortless Rental Group means 24/7 support by our team of short term rental management experts who are dedicated to your success. We’d love to help you navigate these and other common experiences of first-time hosts.
With their new partnership, Airbnb and dining reservations app Resy make it easier than ever to get a taste of a new city.
“When you’re traveling,” says the video in the Airbnb blog post announcing the partnership, “all those unfamiliar options can make it hard to choose. That’s why Airbnb teamed up with Resy to handpick some of the best spots around, from local favorites to award winners.”
Now it’s possible to book a reservation at almost 650 restaurants in over 15 major U.S. cities, including Denver, San Francisco, Austin, Miami, and Washington, D.C. Through the Airbnb website or app, guests can choose the type of food they’re craving—from Indian cuisine to Japanese tapas and everything in between—and desired location. All of the restaurants on offer through Resy have been curated for their quality of food and service, so guests know they’re in for a good experience.
With Airbnb guests spending over $6.5 billion on dining in the last year (included in Airbnb’s restaurant report), it’s likely to be a lucrative partnership.
Looking toward the future, Airbnb plans to extend this service to international cities—and that’s not all. “We’re looking into allowing for even more dining options,” writes Airbnb in their blog post, “like exclusive tables for our users or social dining experiences where guests can share a meal and meet their fellow Airbnb travelers.”
With the rise in popularity of short-term rentals, many owners are turning their investment properties into a second source of income. Once the decision to rent out the property using a short-term strategy has been made, there are numerous other questions that the owner must ask himself or herself: how much should I charge? How do I decorate my home? What do I include in my listing? Should I post on Airbnb, VRBO, or both?
There’s a lot to consider, especially when you’re starting out as a first-time renter. But the single most important decision you’ll make is whether you want to team up with a short-term rental management company or go at it alone.
One of the main benefits of a partnership with Effortless Rental Group is that you’ll be supported by a team of knowledgeable professionals who are dedicated to maximizing your monthly revenue. To learn how you can make exponentially more money when you work with us, versus renting on a short-term or long-term strategy alone, check out https://effortlessrentalgroup.com/hosting-tips/want-increase-earning-potential/
Increasing your earning potential is just the beginning. Effortless stands out from other rental management companies because we provide a turnkey service for our clients. This means that we take care of everything—from analytical pricing using our custom algorithms to handling all bookings and guest correspondence. Our professional cleaning company and re-stocking team will give you the peace of mind that everything is ready for your guests. In fact, many of our clients travel abroad for part of the year or even live out of state. They trust us to manage every single aspect of their rental property.
Owners who want to maximize their revenue and live their lives without worrying about the upkeep of their rental property choose to partner with Effortless Rental Group. We would be honored to work with you in the future. Please feel free to contact us anytime!
Effortless Rental Group
With the new year comes new responsibilities for short-term rental owners in the Denver area. Owners are now required to hold a short-term rental license, obtainable from the City and County of Denver website, in order to rent out their properties for stays shorter than 30 days. Not all American cities require a short-term license—state officials make the call on a case-by-case basis. Part of the licensing process involves proving that a property is an owner’s primary residence and posting his or her Business License Number on the Airbnb listing. The fee for the STR license application is $25 and an owner can be fined up to $999 for advertising their property without a legitimate license.
Learn more about the new Denver STR License at www.Denvergov.org/STR
AURORA | City officials have agreed to allow residents to rent out their homes as vacation rentals using services like Air BnB, but hosts of the increasingly popular short-term rentals must obtain business licenses and pay municipal lodger’s tax, ending a months-long logistical quagmire.
On Friday, Nov. 6, the city issued its first vacation rental business license to Saurabh Chawlah, an active Airbnb host who was barred from renting out his home on East Dry Creek Place in April after a neighbor complained about the amount of people frequently coming in and out of his east Aurora home.
“It was a long road, but I’m glad we got to this point,” Chawlah said. “I’m glad that (the city) made this a priority over the past seven months — they did a pretty good job and they listened.”
The decision means that all vacation rental hosts with an Aurora address will have to apply for a $38 Aurora business license and collect an 8-percent lodger’s tax from each guest they host, according to Trevor Vaughn, manger of the city’s tax and licensing division. The business licenses must be renewed every two years for a $25 fee.
“It’s going to be an allowed home occupation,” Vaughn said.
He added that people who rent out all or a portion of their home to travelers may still be subject to a separate, state lodger’s tax of 4.25 percent.
Had the city not elected to pursue the current plan, Chawlah and his wife, Neha, would have had to pay upward of $4,000 for a conditional use permit and attend a public hearing to receive the approval of all residents and Homeowners Associations within one mile of their home.
The Chawlah’s re-listed their house on Airbnb early Friday, and Saurabh said that he plans on charging guests $45 per night. That price includes the now-mandatory lodger’s tax, which he will remit to the city on his own — not through the Airbnb website.
Vaughn said that the city has continuously pursued negotiations with sites like Airbnb to get them to agree to charging the required taxes at the point of sale instead of having individual hosts remit the city fees themselves on a monthly or quarterly basis.
“At this point, we are looking for more cooperation form the website providers in collecting and remitting the tax,” he said. “That’s something that we’ve been in touch with Airbnb about, but they haven’t cooperated yet. But I think that would be easier for all parties involved.”
Saurabh said that he’s proud of Aurora’s decision to allow vacation rentals by owners in the city, although he’s not certain how cozy other area Airbnb hosts will be to the notion of having to apply for a business license and charge guests an additional fee.
“Other hosts may not be too happy, but at least it will be an even playing field at that point,” he said.
There were about 40 Airbnb hosts serving Aurora visitors as of July, according to anecdotal data collected by the tax and licensing division. That’s a number nearly 10 times what it was early last year.
Prior to being shut down this spring, the Chawlahs had hosted about 55 guests in their Aurora home, according to Saurabh. He said that the majority of their visitors were people looking to stay close to Denver International Airport, students in town to interview at the University of Colorado Anschutz Medical Campus, and younger professionals flying in for job interviews at in Downtown Denver.
Saurabh said that barring any loud or cantankerous behavior, city officials have told him that any future grievances from the next-door neighbor who lodged the initial complaint will be ignored.
“In regard to who’s coming in and out of our driveway, that’s not really that person’s concern,” he said. “We’ve been told that if they do complain it will be ignored unless something crazy happens with loud noise, music or a party. But just with people coming in and out, we’re free to do it.”
Despite Aurora’s new plan regarding Airbnb, a slew of other cities around the state and the country are still wrestling with how to regulate the ballooning sharing economy. Following a months-long moratorium on the practice, Boulder voters approved a 7.5 percent tax on short-term rentals in the city earlier this week. In the metro area, the Denver City Council is in the process of considering its own regulations on Airbnb and other vacation rentals by owner there.
Written by Quincy Snowdon, Reported by the Aurora Sentinel