Archives May 2020

A precautionary tale for vacation rental operators post COVID-19

As a professional Airbnb manager, I’m a member of a lot of Facebook groups filled with other hosts and managers.

Some of them are very helpful and offer a wealth of knowledge; some of them I’m a member of more for the entertainment factor that anything else.

But I’ve been seeing a LOT of hosts lately making comments that concern me. They’re all along the same vein, but here is a paraphrased quote of one of them (I removed all the swearing and typos) :

“I didn’t pay my rent on my Airbnb unit in March, April or May. I’m not planning on paying at all until August at least. That’s the earliest the complex would be able to evict me based on current eviction bans because of the virus. Until then I’m just going to ride the gravy train. Plus the lease isn’t tied to my SSN, so I won’t even have the eviction on my record. Yay, me – I’m so smart!”

Really?

Do people really think this is ok?

There are so many things wrong with this statement. Where do I even start?

The blatant violation of a contractual agreement? The outright stealing? The bragging about said stealing? Comments like this (of which I’ve seen many the last few months) make me physically sick.

Many hosts complain that bad guests are making things difficult for them. But not many of them say anything about how other hosts are also making things difficult for them. If I was a landlord, I sure wouldn’t want to rent to someone who might sublet my place out and then plan on not paying me for 6 months or more!

Many Airbnb hosts jumped on the gravy train when bookings were easy to get, overextending themselves because it was “easy money,” and now they (and everyone they’ve rented or purchased from) are paying the price.

But it’s more than that, too. I’ve seen a consistent trend of Airbnb and other short-term rental hosts proudly exploiting loopholes in the system or even outright violating the rules so that they can operate. They seem to have no regard at all for respecting the rules of the community within which they’re trying to operate.

Thus they operate where they know they’re not allowed, lie to landlords, refuse to pay rent, and all sorts of other illegal or unethical practices.

If this is your business plan, your exit strategy, if you’re even considering doing this or anything like this, let me be clear: you’re not a business person, you’re a con man.

You’re a thief, a common criminal. And you should not be proud of this. You should be ashamed.

That woman entered into a contractual agreement that she is choosing to flagrantly ignore. It’s not even that she doesn’t have the money. She just wants to hold onto it “just in case.” She hasn’t bothered talking to her landlord and working out some sort of deferred payment plan. She’s just giving the middle finger to the person who’s enabled her primary source of income for the last several years.

People, this is not right.

If you want to start a business with Airbnb….make it a business. Make it legitimate and honorable. Do your best to pay your bills and honor your obligations. If you’re unable to do so because of unforeseen circumstances, talk to your creditors. (And yes, a global pandemic that cripples the world economy definitely counts as an unforeseen circumstance.) Be honest with them and tell them what’s going on.

More often than not they’ll be understanding and willing to work with you, as long as you’re upfront with them.

That is the only way to create a business that will survive the long run.

Now I know that if you’re in the situation right now where you have multiple properties and can’t pay the rent or mortgages on many of them, there’s not much that can be done in hindsight to change that, although I’d still recommend you talk to the landlords.

But hopefully this can serve as a precautionary tale for vacation rental operators moving forward.

I know that it can be tempting to just buy, buy, buy (or rent, rent, rent), to expand your empire as quickly as possible and bring in the moolah. But rapid growth like that isn’t healthy. We’ve seen this over and over again throughout history – it’s called an economic bubble, and it always eventually bursts.

I encourage you – I entreat you, I beg you – for your sake as well as all of ours, restrain your growth goals. Don’t gain new properties quicker than you’re able to manage them responsibly. Keep a healthy financial safety net to get you through the unexpected bad times.

There’s no question that COVID-19 threw a nasty and unexpected wrench into vacation rental operators’ plan everywhere. But there’s also no question that if they had been operating their businesses more responsibly and ethically in the first place, a lot of them would be in a much better place than they are now.

Let’s do better next time. Our guests, other hosts, and the landlords or banks who are entrusting their resources to our care deserve it.

How to survive COVID-19 as a STR host – webinar replay

Are you freaking out because of the uncertainty that COVID-19 is throwing into your life? Are you struggling to find a new equilibrium for your STR?

You’re not alone.

Across the globe, hosts everywhere are struggling with the challenges that the virus has thrown their way. Many of them are having a hard time.

That’s why at the end of April I hosted a live webinar – How To Survive COVID-19 As A STR Host – with my friend Katie Adkins.

Katie is a leadership development coach, and the founder of Adkins Talent Solutions. She excels at helping people to think creatively to maximize their full potential.

So on the webinar, we did a little coaching session with me as her subject. My hope was that the insights she pulled out of me as an STR host could help other STR hosts think creatively and get out of their ruts, as well.

It was a great hour! In fact, I had so many people follow up and ask me about it that I decided to make the recording available to everyone. Enjoy!

If you have more questions, you can always follow up with either me or Katie.

The best direct booking property management tool

There’s no doubt that COVID-19 has thrown an enormous wrench into the short-term rental market. Consequently, a lot of hosts are looking for opportunities to diversify and pivot their listings.

One of the most obvious ways to pivot is to start accepting direct bookings.

These are simply reservations that are booked directly through you, rather than through a booking channel like Airbnb or VRBO.

Direct bookings hold a lot of appeal. Especially because the policies of Airbnb and other large booking sites seem to be a moving target right now. Hosts are eager to get their eggs out of the single basket that they really have no control over.

But opening yourself up to direct bookings opens the possibility for a whole new slew of problems.

One of the most obvious – and important – problems that needs to be addressed is that of guest vetting and payment management.

Normally, if a guest books through a booking channel like Airbnb, the channel has already done that work. They have their own guest vetting procedures (admittedly some more stringent than others). Things like ID and background checks can give hosts confidence that the guest is indeed who they say they are. Booking channels also generally have payment processors built in, so you don’t have to worry about failed credit card payments or chargebacks.

In exchange for these services, they of course get a cut of the booking fees, and hosts don’t have a lot of input regarding system and policy changes. But it’s a price that most are willing to pay for the ease of mind that it brings.

If you decide to start accepting direct bookings, the first thing you’re going to have to is figure out a way to handle these problems on your own.

The best tool that I’ve found to do that is Cozy.co.

Cozy is a nearly 1-stop shop for everything you need to efficiently manage your direct bookings. Here are a few of the many features it has:

  • Rental application portal that includes credit reports and background checks of potential renters.
  • A payment portal that can take rent payments, as well as other incidental charges such as security deposits, cleaning fees, etc.
  • Listing links that you can share with prospective renters, including space for both photos and a video walk-through. I’ve found this to be particularly helpful, as many people want to see more than just photos of the place before they book.
  • You can also track expenses, keep a record of maintenance requests, and store important documents like lease agreements, all directly within the app.

The only downside I’ve been able to find of Cozy is that it does not have a mobile phone app; however their website is mobile-friendly, so even that really isn’t a big deal.

If you’re looking for help collecting more direct bookings safely and securely, definitely consider checking out Cozy.co. I promise you it will save you lots of headache and stress!