October 2019 Q & A
10.04.2019 - By Cashflow Diary™
Questions and Answers We are making our first short term rental unit listing tomorrow, when should I set up Wheelhouse and AirBnB? That should be done now since that all happens at the same time. If you are ready to make your listing live go ahead and get that done now. What is the best way to attract guests to stay one month or longer? When it comes down to length of stay, being able to attract someone who wants to stay longer has a lot to do with what platform you’re on and your pricing strategy. Each site markets to its database differently and displays your listing differently. Booking.com is a discount marketplace, so your ranking depends on how much of a discount you’re giving. Craigslist is not recommended for this purpose. The best way to get a 30 day reservation is to work with insurance companies. When a homeowner gets displaced during an insurance claim, it will often be for 30 days or longer. Should tenants have list agreements signed? There are times when a list agreement makes sense, for example a deal with a corporation. If you want to protect yourself from a tenant’s rights issue a listing agreement can be a good idea. What is considered an automatic cancel with regards to someone’s reservation of a short term rental? If someone causes a disturbance and then becomes belligerent, that creates a completely different issue and can be subject to cancellation without any sort of refund. Within the house rules list it outlines what the words “our discretion” means. Typically that means the process goes from warning, to fee, to cancellation, but there are some issues that warrant an immediate cancellation. A question about using a four-plex as a short term rental The more you can divide a piece of real estate, the higher your utilization rate becomes but it is a double edged sword. This kind of rental requires different levels of services and a much higher level of management. Pricing can also be pretty cutthroat and can make screening more difficult. You will also probably need someone on site 24/7 and there may be a separate license required. Depending on the layout of the four-plex, it could be possible to get away with less management. Finding someone to actually manage a hostel style short term rental is another big challenge. Should the damage waiver fee be the same when your in the 30 day market? The damage fee should be increased to closer to $300. In a traditional market where you get $59 you would get in theory five or six reservations, so you should try to make up for the potential lost revenue. Now that AirBnB is currently favoring businesses as hosts instead of individuals, should we rearrange our inventory? J has started putting all the inventory onto a single host account for AirBnB. When you have your team document resolution income claims do you find value in having the unit added to the spreadsheet? Yes. If there are multiple claims from the same short term rental unit, that may indicate it’s priced incorrectly and attracting the right client. Are there any corporate rental websites that work well? Nothing yet. We’re going from high to low season, what actions should I take moving forward? The metrics you need to pay attention to within SmartBnB is early vs. late bookings. When you’re new, you don’t know what you don’t know about the seasonal patterns. What you’re trying to figure out is if the pattern is normal or if there is a seasonal adjustment to your pricing issue. You can eventually tell with data that you will need to adjust something, probably your discount curve in order to maintain the same occupancies and revenue. This September will be that baseline for what to expect from here on out. How important is it to have central air? There is a big difference between having some AC and having no AC whatsoever. In a humid and hot environment, so long as you have some sort of air conditioning you shouldn’t have a problem. This is a review driven business and as soon as one person sweats all night you’re going to have a problem. If the unit has no AC at all, ask the landlord to put one in. When people smoke inside, will the carbon monoxide detector go off? Label your devices in each room of your short term rental unit. You will want to know if it was the detector in the bedroom or the kitchen. People are cooking in the kitchen you know. Have you gone over what you will be doing with your listings in LA after November 1? Not much is changing because we are constantly working on getting direct bookings and our networking is contributing to keeping the units filled. Links: cashflowdiarypodcast.com Thank you for listening! If you enjoyed this podcast, please subscribe to the show on iTunes and Stitcher Radio!