Six things you need to ask before hiring an Airbnb manager

Hello everyone, I will be writing a four part series regarding expectations in the short-term rental (STR) industry. Part one is about investors expectations. More specifically, five things you can expect from the STR company / person you hire.

I hope you find this post helpful and insightful, we want to equip you with the TOOLS you need to be successful!

There are two primary reasons why I want to dive into this topic:

1. 1. STRs are a niche and relatively new industry.
2. 2. Most investors don’t actually know what to expect from a STR management company when hiring or partnering with them.

I’ve heard horror stories from investors who lost thousands of dollars because they did not vet their previous STR management properly. In many instances because they didn’t know what to ask for. I’d like to prevent you from making the same mistakes many others have, so here we go.

1. 1. City Regulations: Many hosts and STR management companies disregard this part and it's arguably the most important. What are the regulations in your city? What paperwork is needed from you? How will your STR management help you be in compliance with your city? Always make sure you understand the process and receive the amount of guidance needed to ensure you are up to date with permits and regulations. The last thing you want is to have your STR / vacation rental shut down after you launch because you weren’t in compliance.
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4. 2. Guest Screening: Screening guests is very important because this is how you prevent damages to your house, parties that disturb the neighborhood, and keep criminal activity at bay. A good STR manager will have questions and tactics to avoid undesirable guests from booking the place. I always suggest having a conversation about this. Some things you can ask are, how do you screen guests? What limitations do you have set on your listings? What do you do to prevent parties (in the case that parties are not allowed).
11. 3. Claim Management: In the case that damages occur, you want to work with a STR company that has an excellent track record getting claims resolved with the main platforms such as Airbnb / VRBO. Ask them to explain in detail how they’ve handled claims. They should be able to describe the process in 3-5 steps. It is vital to understand the system around claims so your investment is protected. In the case of direct bookings, ask about experience submitting claims and getting them resolved with the insurance company.
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14. 4. Market Knowledge: As seasoned professionals in this industry, we’ve had to do market research and analysis for the areas of our current rentals. We may have rentals in the area you’re interested in so we can provide first-hand insights of revenue, hot areas, criteria, and occupancy rates. A STR manager should be able to give you comps and give an estimate for average monthly booking revenue. If you don’t know the market or the numbers in the industry, seek expert insight. It will be worth it.
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17. 5. Reporting: Many companies will provide you access to a portal where you can track your financials and bookings / reservations anytime you want. You may also receive reports once a month including details such as revenue, occupancy, and gross income. Whatever the method is, make sure you are receiving updates that provide you insight into how your investment is doing on a monthly cadence.
19. 6. Pricing: Seasoned STR professionals typically use a combination of pricing strategies to increase bookings and maximize cash flow. It may include dynamic pricing software, manual updates, competitor analysis, and market knowledge. It should be a combination of them each. It is important to go with someone who is actively improving the pricing. When vetting a STR manager you should ask: What’s your pricing strategy? Do you use a dynamic pricing tool? What amount would you set the minimum price for a place like mine?

I hope this is helpful. I’d love to hear your experience or suggestions in the comments!