What are your top STR Hacks? Here are four that worked for us and our clients.

[AJ Wong]

The top Vacation Rental Hacks I've learned in ten years as a BNB operator, DIY'er, investor and broker that has sold over two dozen vacation rentals:

- Hosting and Management

Use a local Super Host, neighbor or new friend to reduce operating costs and increase property TLC. National STR Property Management companies are good, sometimes necessary, but also prohibitively expensive. I've worked for one of the largest (if not the largest) STR PM in the country and depending on your region they generally charge 20-35% of GROSS revenue. I often joke that if they want a 1/3 of the revenue they should put up a 1/3 of the down payment and co-sign for the mortgage..lol Also depending on the geographical region, there's a chance the larger PM operations could be managing several properties in your area. In peak seasons checkouts and turnovers generally occur on the same days. With limited support staff it can be difficult for companies to execute on time, and likely the actual on the ground cleaner has little financial incentive to perform meticulously . They are often compensated much less than the cleaning fee the host charges guests. The solution? Find your own cleaners and crew. Post to Craigslist for a cleaning crew (and a backup!) Then match with a super host or someone you can trust to treat your property like their own. Incentivize them. Make them a partner in your property. 8-12% is common. Let the cleaner keep the full cleaning fee. OR assemble an on the ground team and find someone in the family (maybe you) to do it themselves.

- Furniture & Decor

This is up for debate but for most short term rentals, those that are themed, have quality furnishings and a cohesive presentation typically produce better occupancy and revenue results. I have no statistical data for this but I do have real world experience. When AirBnB first got hot in 2014 I used to sublease my rented 1/1 bungalow in Venice Beach when I traveled. (DO NOT DO THIS NOW) but the difference in production when I changed out the sofa, linens and provided exterior amenities was drastic. Same goes for my Oregon Coast hosts and investors, it doesn't have to be high end furniture, I have one client that probably executed best of my clientele last year. They had a very specific vision for a dream beach house. They took a week, ordered almost everything online and created a very 'beachy' home. They are CRUSHING IT. SUPER host. Check out their listing HERE. In general, create a home that is yours, that is shared with others. STR investors need to budget for an unfurnished home both in capital and time. Getting a property fully launched involves moving. The same moving required with a primary residence. There are logistics to consider, if you're driving, repurpose some items from your current properties.

- Permit Consultants

In areas where vacation rental dwelling permits or licenses are required (DO YOUR RESEARCH) it can be useful to employ a consultant to process your application or permit. A local contact often has local relationships and the consultant we use in several coastal counties where the process is involved. The service fee or cost can be justified in saving time (and mortgage payments) during the application and approval process. In some areas the applications and/or licensures themselves have been increasing in costs to as much as $3,000. These and the time required are important costs to consider when estimating required capital to launch.

- Second Home Loans & Seller Concessions

One way to off-set some of the unanticipated costs above is by utilizing more favorable and flexible lending and mortgage terms. If the property is located in a vacation or coastal zone typically lenders have fairly low barriers to what constitutes a second home. In most cases it is the duration of occupancy by the investor annually, often as little as 2-4 weeks per year. It can be a fine line which is best walked with your licensed mortgage broker. Second homes cannot be utilized for DSCR loans because they can't produce income to qualify. They are usually full income verification or Alt-A utilizing a combination of bank statements or asset depletion for income. Second home loans often have lower down payment requirements (since they show more income) and can typically receive up to a 6% seller concession (instead of the typical investor maximum of 2%-3%.) Rates are lower and the products available (30 year I/O, 40 YR AM, ARM) are usually more diverse. Pre payment penalties are less prevalent. Seller concessions towards closings costs can reduce cash to close and conserve capital for furnishings and operations during licensure. Interest rate buy downs are a good way to improve operational cash flow until (hopefully) mortgage rates continue to decline.

What are your TOP STR house or property Hacks?