How to manage a mixed portfolio: Short-term rentals and multifamily units

The merging of short-term rentals and multifamily units has become an increasingly popular trend in the rental industry. These two sectors are intersecting as managers of multifamily buildings, including apartments and condos, are now offering their units as short-term rentals.  

Managing a mixed portfolio can provide many benefits to your rental business, but requires a firm grasp on the operations behind both. There are significant differences between managing residential properties and short-term rentals, primarily due to the varying needs of long-term tenants compared to short-term guests. In this blog, we'll explore effective strategies for managing a mixed portfolio of short-term rentals and multifamily units. 

Understanding the basics

Short-term rentals

Short-term rentals are properties rented out for short periods, usually ranging from a few days to a few months. Platforms like Airbnb and VRBO have made short-term rentals a popular choice for both investors and travelers. The main advantages of short-term rentals include higher per-night rental rates and flexibility in pricing.

However, they also require more hands-on management and are subject to regulatory changes. Short-term rental management demands more frequent housekeeping, proactive and detailed guest communication, and hospitality services.

Long-term rentals

Long-term rental units, on the other hand, are residential properties ranging from multi-unit complexes to single-family homes. Multifamily properties typically offer steady, long-term income and can benefit from economies of scale in terms of maintenance and management.

However, with a large scale of units, management can become much more complex. Residential property management emphasizes the ongoing maintenance, safety, and security of the building, amenities, units, and tenants.

Benefits of a mixed portfolio

Diversifying your real estate portfolio by including both short-term rentals and multifamily units can provide several benefits: 

• Income Stability: Multifamily units offer stable, long-term rental income, while short-term rentals can generate higher, albeit more variable, returns.
• Risk Mitigation: Diversification reduces risk. If the short-term rental market faces a downturn, the consistent income from multifamily units can provide a buffer.
• Market Flexibility: Having different types of properties allows you to adapt to changing market conditions and regulations.
  
  

Strategies for effective management

Focus on customer experience

For short-term rentals, guest experience is paramount. Your business relies on 5-star reviews, so it’s important to promptly address any questions or concerns to maintain high ratings. With guest communication tools like Breezeway Messaging, you can streamline all communication in one dashboard so nothing gets missed. You can also provide excellent service with less work by automating messages to guests at the right time, such as pre-arrival messages, property readiness notifications, check-out reminders, and review collection.

For multifamily units, tenant satisfaction is key. Provide a safe, clean living environment and responsive maintenance services to retain good tenants and reduce turnover. Breezeway Messaging also facilitates seamless communication between property managers, tenants, and vendors. Our tools help you automatically coordinate work with vendors and communicate work order status updates with tenants.

Breezeway’s customized automated SMS messaging can save you needed time as you share important information with guests.

Regular property maintenance

Routine maintenance is essential for both short-term rentals and multifamily units. However, the approach may differ. short-term rentals require more frequent deep cleaning and minor repairs due to higher turnover, while multifamily units benefit from scheduled inspections and preventive maintenance to avoid larger, costlier issues.

Breezeway's property maintenance tools help you save time by automatically scheduling recurring maintenance tasks to prevent issues before they arise and reduce complaints. Create custom preventative maintenance checklists with photo documentation to ensure every task is completed to your brand standards, and receive real-time inspection reports with photos and notes to upkeep brand standards and the rental property’s condition.

Simplify turnovers

For short-term rentals, ensuring the property is clean, well-maintained, and equipped with essential amenities is a major operational challenge. Vacation rental turnovers usually require a quick turnaround time between guests sometimes checking out and checking in on the same day. Be sure to set a good first impression from the start by exceeding guest expectations when they walk into a sparkling clean property.

For residential units, turnovers may be less frequent and have larger gaps in vacancy giving cleaners more time in the unit and more flexibility when scheduling turnovers. However, without the same regimented check-in and check-out days like short-term rentals, navigating this process and coordinating tenant and cleaner schedules is still tricky.

Breezeway’s Operations Platform can serve to streamline this process for both markets and eliminate manually scheduling turnover tasks. You can create consistent, quality work by automating repeatable and scalable processes for turning and inspecting units. Staff can also use the Breezeway mobile app in the field, which is equipped with digital checklists customized to each property and unit to ensure nothing is overlooked. This gives you visibility into property readiness in real time, reduces cleaner callbacks, and streamlines operational processes.

Ensure quality work is completed in the field with real-time updates and photo documentation in mobile checklists.

Automate where possible with smart tech

• Noise monitoring

Noise complaints are something that every property manager has to deal with in both short-term rentals and residential units. Don’t wait for renters to complain about these issues, get ahead of it with noise monitoring devices.

Breezeway Messaging integrates with noise monitoring devices to automatically text renters when noise levels have been surpassed. In 90% of cases, this message solves the noise issue in under 30 minutes—usually with just that first text. No management intervention, no late-night property visit, no added labor cost.

• Smart locks

Smart locks are a tool that most modern travelers and renters come to expect at their units. They help all renters feel safe and allow property managers to manage access from anywhere. Breezeway Messaging also integrates with smart lock devices to automatically text guests their unique arrival codes. This not only gives residents peace of mind but also makes the check-in process seamless for guests and reduces complaints.

• Digital guidebook

A guest guidebook is a great way to proactively communicate with guests to provide everything they need to know about their stay. While residents are familiar with the property and local area, visiting guests will need more guidance to make the most of their short stay.

With Breezeway Guide, you can automatically send guests a customized digital welcome book outlining important property information for their specific stay. For short-term rental guests at a multifamily unit, this could include directions to access the property, check-in and check-out information, a unique door code, WiFi password, local recommendations, local rules and regulations, and any specific instructions about property appliances and amenities. This information not only gives guests a more seamless experience but also prevents any issues with current residents.

The Breezeway Guide is easy to share with guests and ensures they have the smoothest stay possible, from arrival to check-out. 

Stay informed about regulations

The increase in popularity of short-term rentals in the past few years has driven regulators to pay more attention to the industry. It’s important to stay informed as local laws and regulations continue to change to ensure compliance. Regulations for short-term rentals are often more stringent and can have a large impact on your business’s operations and profitability.

Multifamily units also have regulatory requirements, but they tend to be more stable. Regularly review local landlord-tenant laws to stay compliant.

Successfully managing mixed portfolio operations

Managing not only one rental property market, but two, can be extremely challenging, but also comes with key benefits. By understanding the unique aspects of each property and tenant or guest type, you can implement effective management strategies to maximize your revenue and achieve long-term success. Luckily, Breezeway’s technology gives property managers the tools to help make managing mixed portfolios a little bit easier.