Here is my opinion and experience of the Ins and Outs of owning and managing vacation rentals. It is A LOT of work! We started out renting our ski cabin on www.vrbo.com about 5 years ago. I have numerous friends and family that all had listings and we would talk amongst each other if we had any inquiries we couldn’t personally fill. The website and the concept was simple. We paid a yearly fee of $399 and the income was ours. We would get 50% of the booking income when someone reserved and the remainder a month before the rental booking date. We would see the Security Deposit in our bank account and we would refund the tenant once they checked out. If we, the owner ever needed to keep any of the security deposit it was simply done. In 5 plus years of using these websites I can say I maybe asked for any or part of a security deposit less than 5 times. (When you rent to a group of 25 year olds for a wedding – you end up with a bigger cleaning fee) Lesson learned on groups under 25. I still prefer families any day and would decline any inquiries I didn’t see fit. God love the young girl who filed a complaint on me over that! lol
In the last 3 years the VRBO website has had constant changes and it became a headache keeping up with all of it. VRBO started adding in extra fees on both ends on top of the 8% on each booking. Then they decided to keep all the money until 24 hours after a booking arrived. So if you are only renting summer months and are using this income to maintain your mortgage and utilities you won’t see any money until your first reservation in July. Clearly I was getting frustrated with VRBO and their fees and changes so I decided to check out Airbnb. Super simple website, no sign up fees and only 3% fee. Sounds great doesn’t it! I found the simplicity of Airbnb refreshing and would probably say its my favorite site when it comes to bookkeeping if I had to pick one.
The issues with Airbnb came about when I requested some of a Security Deposit. I had to file a complaint with pictures and the guest could decide if they wanted to send me any money or not. The one time I asked – the guest declined. Those 25 year olds again right?! Lesson learned. I clearly wrote on my listing “family oriented home” and “not suitable for parties” and “age 27 and older”. Eventually a young girl complained re discrimination and Airbnb sent me a warning. I had to accept anyone on the site – they didn’t allow age restrictions. Another great change – lets talk about algorithm – before we would show up in the Top 50 searches because we had been on the site for years. Eventually it came down to you had to be on “Instant Booking” and have more bookings per year than most to find your way to the the top. So If i only rented 2 summer months a year – good luck finding my listing.
One of my last rentals of this summer ended up with a few issues. The issues were out of our control – the roots from a tree had gone in the plumbing lines and it backed up. We got the call at 930 AM and it was fixed by 1130 AM. The next day we brought the plumber back to clean the tree roots out of the sewer pipes. We brought wine and gifts and we fixed immediately – everyone was happy. The issue came when the tenant got home and messaged me wanting 2 nights refunded. I didn’t agree with her as I found it interesting she only asked once she left. If she had of packed up and left prior to the week tenancy ending – I would of understood. I declined and she then filed a claim and wanted refunded 4 full nights. Yes it went from 2 – 4? Guess what? Airbnb refunds 50% the nightly rate so she was refunded – you guessed it – the price of 2 full nights. Does she know the system hence why she asked for 4? What a tenant said was the final answer and they took the money off the next rental income. It’s also impossible to contact Airbnb for any form of help. This was my final confirmation I had enough to do with vacation rental websites and tenants. I would like to add that 90% of all our tenants were absolutely amazing. So I won’t focus on the few that were frustrating. This was the one and only tenant claim in my 5 years of running vacation rentals!
Now the question… do we stay short term or do we go back to long term lease agreements. In a short term tenancy, I can get $1800 a month rent off-season Sept to June (10 months) and then $1800 a week for 8 weeks in July/August totalling $14400. I’m estimating high but a total of $32k a year. Keep in mind this is only if all weeks are booked and all off season months are booked. Rarely does that happen. Last year we only rented the home for 6 months off season.
Today I can rent that same house on a long term lease for $1800 a month x 12 months. I’m actually getting in my pocket $21600 a year. Based on my best case scenario, I could potentially make another $10k year if I stay short term. Lets not forget we also pay all utilities year round (average $600 month) when its a vacation rental. So take $7200 off your income for that. Plus $1100 a year for yard maintenance.
Long term lease – I do not pay any utilities or manage the yard. Long term is starting to sound more affordable after 5 years of managing rentals.
I want to emphasize how much more work it is just to get potentially an extra $2500 in your pocket. Scheduling year round, inquiries year round, managing cleaners and checking in when the tenant leaves and after the cleaner is done. If you don’t walk through once the tenant leaves – you don’t know how to review the tenant. Did they start laundry? Was it left clean? etc.. Always check after the cleaner is finished. I give cleaners a whole lot of credit in the crazy busy summer months. Its labour intensive and you usually only have a 4 hour turnaround. Cleaners get burnt out near the end of the summer. Stuff gets missed. If you want good reviews – you as the homeowner or property manager must do walk throughs. Did the grass get cut? Is the BBQ propane tank empty? Do you need more toilet paper? Is the proper recycling in the recycle bin? Weekly checks are mandatory. Let’s not forget about all the empties and garbage you have to deal with. A lot of times this has to be done on a hot summer weekend and you would rather be on a boat!
I feel my deciding factor is that these websites have become more tenant based than homeowner based. Which really doesn’t make sense to me. What is Airbnb or VRBO without our homes? Nothing. If they don’t have owners, they don’t have any homes to rent. I know they have to focus on both clientele but after 5 years of all this chaos, we have packed up our home and signed a 1 year lease.
Are vacation rentals a fad or here to stay? I know our small touristy town definitely needs them – so many hotels have been purchased by BC Housing. After all of this – personally I will continue to rent vacation rentals. I have met amazing people through this process and maybe one day the websites will go back to simplifying things. It was much easier 5 years ago.
PS I did write this number down years ago to actually get a human on Airbnb. Hope this helps…1-855-424-7262. VRBO I have 1-866-210-6106. Best of luck out there!