Are short term rentals more difficult or simpler to manage?

[Jon D.]

I've been doing some research into the short-term rental market. Browsing on Airbnb in my city and analyzing prices, availability, etc. Economically, they make a lot of sense given the higher comps and cash flow I can pull vs. an annual lease.

I also believe that a lot of the day-to-day can be automated (i.e. listing the property, booking it, keypad lock entry, having it turned over for the next rental.)

QUESTION - If anyone has a short-term rental, I'm curious to know if they are more or less difficult to manage? Are there common problems that come up with short-term rentals, which the average real estate investor wouldn't consider?

[Peter R.]

I'd say the biggest surprise some people find when getting into this business is just how much of a customer service job it really turns into.  The attention to detail can mean the difference between 4 and 5 stars across multiple booking sites. 

And not just in dealing with guest interaction when they are on property, I'd put time management and communication skills right up there with customer service skills.

Poor communication with potential guests will see your listing dropped in search results by Airbnb and VRBOHA. If your AVERAGE inquiry response time on the booking sites is greater than 24 hours you're going to start suffering in searches.  I'd even say a good 25% of my bookings are accepted and paid before some of my competitors even bothered to respond to what I'm sure are inquiries from the same person that asked me about rates for a particular week/month.

And once on-property, if you're not checking in, being pro-active about making sure they're happy or spot checking occasionally to top them up on towels or what not, you may see your ratings tend towards the non-5 star.

So to sum up, I'd say if you're coming from a long term rental mindset, the attention to detail and constant communication would be the biggest shift in mentality.