Vacation rental management: A complete guide

The hospitality industry is ever-evolving, and vacation rentals have emerged as a dominant accommodation type. As the demand for short-term rentals increased from guests, so did the investment in real estate in the vacation rental market. Not all investors and homeowners have the capacity to manage a property themselves, thus creating the need for property management services.

A vacation rental business is successful by driving guest bookings and maintaining owner relations. The importance of scalable solutions cannot be overstated in this context. As your portfolio grows, the complexity of managing multiple properties and more guests increases exponentially. This is where an integrated tech stack and automation come into play.

By leveraging technology, you can streamline operations, reduce manual effort, and enhance the overall guest experience. Breezeway, a vacation rental operations and guest experience software, is designed to help you achieve these goals by providing a comprehensive platform to manage your properties efficiently.

In this article, we’ll dive into all aspects of a vacation rental property management business - including what it is, how it works, and key steps to starting a vacation rental property management business yourself.

What is vacation rental management & how does it work?

At its core, vacation rental management is operating short-term rental properties for homeowners, whether you own the property yourself, or manage it for other owners or investors. This involves overseeing the operations of short-term rental properties, ensuring they are well-maintained, effectively marketed, and consistently delivering exceptional guest experiences. For property managers, the challenge lies in managing operations efficiently with employees and vendors while providing personalized service to guests and owners.

Vacation Rental Management Business Models & Revenue Streams

Understanding the various business models and revenue streams in vacation rental management is crucial for selecting the right approach for your business. Here are some common models:

• Full-Service Property Management: This model involves managing all aspects of the rental property, from marketing and bookings to maintenance and guest communications. Homeowners can be completely hands off or as involved as they wish. For this high-level of service, managers typically charge a percentage of the rental income, usually between 10-30%, depending on the market.
  
• Co-Hosting:This is when a manager works alongside the owner to co-host the property, handling specific tasks such as guest communications, check-ins, and cleaning. Fees are typically lower than full-service management, often around 10-15% of the rental income.
  
• Booking Agent:This model focuses on maximizing occupancy and rental rates through effective marketing and booking management. The agent charges a commission, usually around 10-15%, on the booked revenue. The owner is then responsible for operations after the reservation has been made.
  
• Maintenance-Only Services: On the other hand, some managers specialize in property maintenance, ensuring that the property remains in top condition. This service can be billed on an hourly basis or as a flat monthly fee. The owner is responsible for marketing the property to drive bookings and handling guest interactions.
  

What are the Main Responsibilities of a Vacation Rental Manager?

Vacation rental managers have a few key stakeholders: homeowners, guests, and employees. Each of these stakeholders have different priorities, requiring managers to wear many hats, and their responsibilities are diverse. Here are the key areas they need to focus on:

• Property Maintenance: Ensuring properties are clean, well-maintained, and ready for guests at all times.
  
• Guest Communications: Handling inquiries, booking confirmations, check-ins, and addressing guest concerns during their stay to drive 5-star reviews.
  
• Marketing & Reservations: Promoting the properties on various booking sites, managing reservations, and optimizing occupancy rates.
  
• Brand Building: Building the relationship with the guest and establishing a strong brand presence so they book directly through the business and come back in the future.
  
• Financial Management: Tracking income and expenses, setting rental rates, and managing payment processing.
  
• Compliance & Legal: Ensuring properties comply with local regulations, obtaining necessary permits, and handling insurance.
  
• Technology Integration: Utilizing property management and operations software to automate processes and improve efficiency.
  

Key Skills for Managing Short-Term Rentals

To excel in vacation rental management, you need a diverse skill set, including:

• Organizational Skills: Ability to manage multiple properties, employees, and tasks efficiently.
  
• Communication Skills: Strong verbal and written communication to interact with guests, employees, and property owners.
  
• Hospitality: Exemplifying patience, empathy, and a sense of humor when interacting with guests.
  
• Marketing Savvy: Knowledge of online marketing strategies and platforms to promote properties.
  
• Financial Acumen:Understanding of financial management and budgeting.
  
• Problem-Solving: Ability to address and resolve issues promptly and effectively.
  
• Technical Proficiency: Familiarity with property management software and other technological tools in the vacation rental industry.
  
• Sense of Community: Property managers need pride in their local destination. Visitors build an impression of the destination from the interactions they have with your business and employees.
  

Starting your vacation rental management business: Key steps

Starting a vacation rental management business involves several key steps. Here are practical insights for each step:

1. Research & Planning

• Market Research: Analyze the local market to understand demand, competition, and potential revenue.
  
• Business Plan: Develop a comprehensive business plan outlining your goals, target market, revenue model, and marketing strategy.
  
• Network and Learn from Peers: Attend industry events and conferences to learn from other professionals. Stay in your own properties and others to see what works and doesn't for inspiration and optimizations.
  

2. Legal & Regulatory Compliance

• Licensing & Permits: Obtain the necessary licenses and permits to operate legally in your area. Vacation rental regulations are ongoing so it’s important to be aware of local guidelines that could impact the way you operate your vacation rental management company.
  
• Insurance: Secure appropriate insurance coverage for your properties and business.
  
• Vacation Rental Safety: Limit your liability with preventative maintenance and proactive safety measures at your vacation homes. Breezeway's Vacation Rental Safety Course prepares your with everything you need to know about standard safety procedures to protect your guests and properties.
  

3. Building Your Property Portfolio

• Property Acquisition: Identify and acquire properties that meet your criteria for location, size, and amenities.
  
• Owner Partnerships: Build relationships with property owners and establish clear agreements regarding management responsibilities and fees.
  

4. Setting Up Operations

• Property Management Software: Invest in a robust property management system (PMS) to manage bookings across OTAs like Airbnb, Vrbo, Booking.com, and more.
  
• Operations Software: Connect your PMS with an operations software like Breezeway to automate task scheduling based on reservations in real-time. Manage every clean, guest arrival, maintenance task, inspection, inventory levels, and more - all in one dashboard.
  
• Standard Operating Procedures (SOPs): Develop SOPs for cleaning, maintenance, check-ins, and guest communications to ensure consistency and operational optimizations. Empower your team with custom checklists with photo documentation for each property with Breezeway’s mobile app.
  
• Find Staff and Vendors: Source internal employees or external vendors to service the properties and complete boots-on-the-ground work in the field.
  

5. Marketing & Reservations

• Online Presence: Create a professional website and social media profiles to drive direct bookings in addition to listing your properties on popular vacation rental platforms like Airbnb, Vrbo, and Booking.com.
  
• Dynamic Pricing: Implement dynamic pricing strategies to optimize occupancy and revenue based on market trends.
  

6. Guest Experience

• Personalized Service: Provide a personalized experience for each guest, and drive additional revenue with Breezeway Upsells.
  
• Guest Communication: Breezeway Messaging allows you to offer guest support from pre-arrival communications to post-departure follow-ups to ensure guests have the best vacation. Even provide after-hours guest support with Breezeway Assist - a team of trained hospitality specialists who respond to guest messages 24/7 and understand your properties.
  
• Feedback & Improvement: Collect guest reviews and continuously improve your services based on their suggestions and feedback.
  

7. Financial Management

• Accounting Software: Use accounting software or accounting functionalities in your PMS to track income, expenses, and profitability.
  
• Regular Reporting: Generate regular financial reports to monitor performance and make informed decisions. Breezeway Insights provides a reporting tool that gives vacation rental managers an in-depth look at their operations and employee performance.
  

8. Scaling Your Business

• Team Building: As your portfolio grows, hire additional staff or outsource tasks to maintain service quality.
  
• Technology Integration: Continuously integrate new technologies and tools to enhance efficiency and guest satisfaction. The more time you save with automated technologies, the more time you can spend growing your vacation rental property management company and impressing guests and owners with incredible service.
  

Sustainable property management

Short-term rental management is a dynamic and rewarding field that offers numerous opportunities for growth and success. By understanding the different business models, mastering key responsibilities, and leveraging technology, you can build a thriving vacation rental management business.

Breezeway’s comprehensive platform helps you streamline operations, enhance guest experiences, and scale your business efficiently. With the right approach and tools, you can achieve operational excellence and deliver exceptional value to your guests and property owners.