CFD 560 – The Short Term Rentals Business Q&A

October 11th, 2019

Questions and Answers

  • What’s your system for rewarding or getting rid of cleaners that work for you?

The best way to make this work is to make sure that everybody you work with understands the metrics that you are measuring performance by. You should know what your revenue was before you hire someone, and you should see a reflection of that person’s productivity in that after you hire them. You should have a minimum standard for review scores the you require your cleaners to maintain and then keep that number in front of them.

  • If the landlord feels the negotiation around the lease is too much work, is there a better way to go about it?

There isn’t much to deal with a lease other than the specific clause around being able to use the property as a short term rental. Other than that there is a clause around marketing and making sure the lease is in the company name. Those are the three main things that you need to address, other than that there shouldn’t be much you should have to fight for.

The more units and the more revenue you’re bringing to the table, the easier it is to have this type of conversation. Start using future language to help your side of the negotiations.

Failing fast and failing frequently is the secret to success in the short term rental business. You won’t be able to get the ball rolling if you are trying to get it right the first time and are unwilling to fail.

  • Do you find you have more success when you are having a conversation with someone in person or is more of a numbers game?

Being in person is a major advantage when you’re getting started because when you’re new, you have a lot working against you including the mainstream media. You have to overcome a bunch of assumptions which is a big challenge over the phone, which is why your only goal on the phone should be to secure a face to face appointment.

  • Can you talk about how many towels, sheets, and linens you put in your units for each stay?

There is a file in the program that breaks down what you need based on the number of beds and bathrooms. Basically you want to stock for maximum occupancy.

  • Can you speak to the Cashflow Game, where do you find it, host it, why do you consider it important?

The Cashflow Game was developed by Robert Kiyosaki and his wife but the best way to buy it now is through Amazon. Being an introvert, J had to figure out a way to increase his odds of attracting customers. The way to do that is to filter, and the kinds of people who are willing to show up and play a Cashflow Game are self selecting as people who are willing to take action.

He or she who educates their market, dominates their market.

  • Can you talk about obtaining guests that are looking for short term rentals due to being displaced and using insurance claim to fund the rental? Who do we need to build relationships and how do we meet them?

You tend to need a lot of inventory to meet these people. You won’t typically find them, they will find you, but once that happens, developing the relationship is crucial. When someone comes to you ask them who their adjuster is or if the adjuster is contacting you, get to know them and their company.

  • Do you have any ideas to generate more income from short term rentals I already have?

Have you automated offering your upcoming guests early arrival? You can also do that with late departures, extra cleaning, or an extra parking spot. There are a lot of little things you can offer to generate extra revenue.

  • What are your suggestions for offsite storage?

If your running a property with a large number of units, an offsite storage area is just how it has to be done. If it’s on a completely different property, then maybe your cleaners have a legitimate complaint.

  • Do you wash all the towels, including the ones that haven’t been used?

Yes, it’s more important to clean everything than to save the money.

  • Is it true that certain services will turn on instant booking for all listings once they are connected through a property management software?

It depends on the connection type. If it uses iCal to schedule bookings, you will maintain control, but if it uses an API then it will be automatic.

  • How do I handle it when someone books for someone else?

When someone makes a reservation on behalf of another party, instead of referring them to the link we let them know that that’s not allowed and help them understand how to fix it. One way is to have the other person register. You will have to come up with a process that you’re satisfied with because there is no other way to make it work for business travellers.

  • Should I get an AC for a house in Vancouver, WA that doesn’t have one?

There should be inexpensive options that will allow you to install some sort of AC option in the unit. You should also help the landlord understand that by not having an AC in the property they will be at a major disadvantage. If they won’t spend the money on the AC, they will spend it on vacancy.

  • Is there any pros to using software instead of a direct booking site?

Ultimately they are too expensive for what you get. Just because you’re not ready to use a direct booking site, that doesn’t mean you should start building your business on a faulty foundation.

  • Does the landlord have to obtain the permits?

Read the ordinance and do what it says. You can’t reliably call the city and expect the person to know the answer.

  • How do we get into the cleaning business for short term rentals?

The easiest way would be to make a reservation at one of the busiest short term rentals in your area and then comment on their cleaning. Go wherever short term rental owners hang out. There are many ways to attract the right people to you but they are attracted to you you must also communicate what services you have to offer.

  • If a landlord had six stand alone houses and wanted to work with you, but they had an HOA that’s in charge of 80 houses in that area, would you still pursue those houses as short term rentals?

You need to read the CC&R’s understand the rules. Do you want to operate the type of business that the rules allow for, if that’s true then go for it. As an entrepreneur, it’s up to you to decide who you want to serve.

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