Advice for a newbie in the short term rental space?

Question

My husband and I are under contract on our first STR in Old Saybrook, CT. We have two standard rental properties which we've owned for 5 and 6 years but feel like we have a lot to learn on this new venture. I'm trying to research as much as I can as quickly as possible to try and help our cash flow this year. Does anyone have advice they'd like to share?

Our plan is to furnish the property ASAP after closing (early Feb) then advertise the property. We have renovations that we'd like to do to really get the property in tip top shape but plan to do them over next winter to avoid being out of commission during the warmer months.

I'm not sure whether to use AirBNB or market it elsewhere. We're really trying to reduce the marketing and turnover fees as much as possible since we know we'll be in the red for a bit. We live about an hour away from the new property so my husband and I plan do some of the management.

Thanks in advance for any guidance you'd like to share!

Ola Dantis · Answer

@Meghan Reed From a marketing perspective, there are other ways to get tenants who would stay longer and you won't have to spend too much on marketing.

You can consider calling the local hospitals to see if they have travel nurses or doctors who need a place to stay. This is one of many ideas to really help your turnover, as we know turnover costs can really bite into cashflow when it comes to STRs.

Good luck to you and your husband.

Michael Baum · Answer

Hey @Meghan Reed, welcome to the vacation rental foray! So you want to reduce your marketing costs, which is pretty easy by using AirBNB and VRBO to market your property. The first year will be thin, but as you build up reviews (hopefully 5 star) you will get more and more. This won't really cost you anything other than setting up your place right.

How big is your home? Will it cater to families or couples or ?

Turnover costs are something that will always be with you. It is not the same as LTR's that you have. You will need a top notch cleaning team. Someone you can trust to get the house in tip top shape and clean as a whistle between guests. They will also be watching for damage and the like so get a good cleaner.

I would love to get some details on your place. How big etc. Then we can help with some of the nuances of vacation rentals. And don't be too nervous! Just come in here and search for answers. Plus ask away! We are here to help!

Account Closed · Answer

@Meghan Reed, I'm new to the STR space also. For my first deal, I was fortunate to partner with someone who's already successfully running another STR. That said, I have some suggestions from the experience so far: First, besides getting the place furnished, are there other things you'll need done to the property prior to renting? If so, start coordinating those tings now so that you don't lose any time. With the cabin we bought, it needed a furnace which required coordinating with HVAC, propane, electrician, and county inspection. Your goal should be trying to make any needed repairs, cosmetic improvements, etc. happen right after taking title.

The other advice I might offer is to start familiarizing yourself with the platforms, Airbnb and VRBO at least, and building your listing in advance. Learn to navigate the sites. Get any template messages ready. Create guidebooks, attachments, etc. now. You can have your listing pretty much ready to go live, just waiting on staged photos.

Rachel Campagnolo · Answer

Hi Meghan - love that area on CT - so beautiful! There's a very active AirBnB owners group on FB that I think you'd find useful. Not to deter from BP, but another option for education and discussion.  Most list primarily on AirBnb and VRBO.. and there's of course many others.  Also, AirDNA is a great resource to understand the market, occupancy and rates.  Wishing you the best of luck!!

Luke G. · Answer

Schedule a call with @Luke Carl.  He helped me a ton get my processing rolling for my cabin.

Filipe Pereira · Answer

Congrats on going under contract on another property @Meghan Reed! Love seeing local CT folks on the forums doing big things. The easiest will be AIRBNB (but like you said - at a cost). I am a fan of the travel nurse option as they typically stay a few months and usually you can get more $ by renting out per room. Plus, I'm sure you and your husband would prefer to minimize your trips down there!

Meghan Reed · Answer

Thank you @Paul Sandhu and @Rachel Campagnolo so much for the recommendations!  I get a little nervous each time we go under contract on a new property but this one is really making me uneasy just because I need to figure out a whole new rental game.  I really appreciate the advice!

Donna Boyd · Answer

Like a lot of people had said already, put your property on every channel to get the most exposure (airbnb, vrbo, all of them). Use a property management software to hellp manage them (I work at Hostfully and would love to tell you more about them, just message me). Guidebooks also help you be more efficient with sharing property info with guests, upselling, as well as booking future stays. I always start with a low daily price to get more customers and 5 star reviews before I increase the price. With software, you can update all the prices (and other details) all in one place.

Cody Woods · Answer

Congrats @Meghan Reed!  Just a couple of things from my experience...

I agree to go on multiple platforms.  I tried Airbnb, Vrbo and Booking and found Booking to be a pain and not used in my area so I dropped it.  I get about 90% from Airbnb and 10% from Vrbo.

I'm not sure why people talk about the turnover costs... I actually prefer to have people stay shorter times because they damage less, use less, and have less time to nitpick at anything they might find.  They are paying for the cleaning (I charge $105 and the housekeeper charges me $85, the rest goes towards their consumables).  Just a different perspective.

I use Smartbnb to automate my messaging.  The templates they have are a good start.  I just have 5 standard messages: Initial welcome, check in instructions a week before they arrive, a quick check-in the morning after they arrive and check out instructions the night before they leave.

I use Pricelabs to automate my pricing (although Vrbo isn't fully automated yet).

I use Turnoverbnb (free version) to automatically let my housekeeper know when a new booking comes in.

Best of luck!

Meghan Reed · Answer

Thanks again for all the info @Michael Baum.  When everything is said and done on the reno we probably will end up spending close to $50k but we're definitely interested in the resale as we may upgrade in a handful of years.  We really want to make the place a great space for us and our extended family as well so we're OK if it doesn't fully pay off in the short term.

Advice for a newbie in the short term rental space?

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