The one thing we should have done before purchasing our 1st short-term

Backstory

Last year my wife and I finally pulled the triggered, and purchased our first rental property.  The property is a short-term rental in the Outer Banks of North Carolina that we manage remotely. For those of you not familiar with this area, it is a popular beach destination on the East coast of the United States, and is made up of about 200 miles of barrier islands.  It is also a very popular place for investors to purchase homes and condos, and rent them to vacationers.

What Did We Do To Prepare

Like many people, we did a ton of research.  What did that look like? It meant reading all the posts on BiggerPockets about whether or not to setup an LLC, the type of insurance to purchase, learning about flood insurance, the local regulations about short-term rental taxes, all the things that could go wrong in the closing, and all the stories about how guests damaged properties and thinking this was a crazy idea.  Besides the research, we also overcompensated for our newbie-ness by making a couple of decisions before the purchase.  At the the time of the purchase since we "did not know what we didn't know" we set aside an additional $20k to cover anything unexpected that might come up (which it did!).  And we also made sure that we still had cash left over to handle projected operating costs of the property for at least 1 year.  The trade-off with this insurance policy we made for ourselves was that we could not put down a larger down payment (and get better cash flow) on the property or put that money to use elsewhere.

How Did It Go

Overall it went pretty well, and is not nearly as scary as we thought it would be now that we are on the other side of the fence.  You can only read so many BiggerPockets articles, and listen to so many podcasts before you have to say ask yourself what you are doing all this reading and listening for.  You do not get any return on your time you invested in reading and listening unless you eventually commit to taking action and putting it to use for yourself (or others).  Just like if you are going to take a day trip somewhere that is a few hours away, if you tell yourself you will never leave the house unless every single road is free of traffic, construction, speed traps, and problems you will never leave.  At some point you have to just go, and have confidence that when something comes up you will figure out a way around it.

What Do I Wish I Knew Before Then...That I Know Now

We should have planned and made processes for all the various guest scenarios that can come up.  My advice would be that you brainstorm all of the questions and problems that could come up for your area, and for the type of property you are renting.  What I mean by that is that if you are marketing your property as "the party house", then you are going to have a different set of scenarios that can come up vs. someone who is marketing "the couples retreat".  You also need to think about how to handle the more mundane questions and problems such as when the guest calls you because they locked themselves out, the guest can't figure out how to use the remote control for the television and switch it from DVD to cable, the washer is not working, the guest checked-out of the property but left something behind and didn't realize it for 3 days, etc.  Today we have it documented with exactly what to do for emergencies, and who to call so when these situations come up so they are much easier to handle.  We also have a document in electronic and paper format (in the house) that answers these questions for the guests.  For example in our "Welcome Book" we have pictures of our remote controls with steps on how to exactly watch a DVD movie, how to watch cable, and how to play a video game. These documented processes and procedures minimize the problems we need to handle, and puts us in a position to outsource this role in the future if we choose to do that.  

What Advice We Received From The Forums and Podcasts That Was Priceless

You need to have good relationships with "your team".  We searched for the best cleaning service, handyman, electrician, appliance repair person, pest extermination, banker, attorney, and locksmith we could find and in our opinion we found them!  Make sure you are in contact with them regularly, and support their businesses even if it is just liking/commenting on their social media posts, recommend them to friends and colleagues, to let them know that you are on "their team" as well. Our relationships with our team have been a huge factor in the success we have experienced in our first year as a rental and minimizing stress when some of the above mentioned situations with guests have come up.