CFD 565 – Bed Bugs, Insurance, and Bad Reviews Q&A

October 23rd, 2019

Questions and Answers

  • How do I improve my rankings so that I can be viewed more frequently and more often? Also do you have any tips on attracting last minute guests?

The first step is to run a Market report using SmartBnB on the caller’s location. Start making incremental changes to the pricing specifically for the available dates coming up in the future. The market report will reveal the low, high, median, and average prices for any comparable listings, you should be pricing your listing relative to the market for your available weekends.

You should also adjust for seasonality. The change from August to September can be quite drastic. Since the optimal booking window for the caller is 25 days, it may make sense to start experimenting with the discount curve beyond 14 days.

Being on page 11 of the rankings is basically the same as not being present at all. Look at your title and thumbnail as possible places to improve alongside pricing.

  • My closing was put off because of the hurricane, can I go ahead and list the property but not go live?

There is a window of time when your listing is considered new and it gets a boost in exposure and rankings. You should maximize the SEO bonus when it’s available. We also have a number of students that have optimized their locations as possible shelters from bad weather or natural disasters.

If you have a property in an area that is exposed to bad weather, a good tip is to have a generator so that your property doesn’t lose electricity when everything else does.

  • Any updates regarding automation getting agreements signed?

J had to put this project on the back burner due to some issues scaling out the customer service team. The goal is to have two way communication through as many channels as possible. Once we’ve worked through that we’ll be making more steps towards automation.

  • What do I do about bed bugs?

Ideally when you are building a business you want to build in systems so that your amount of time working in the business instead of on the business is as minimal as possible. Hopefully you never experience bed bugs but having systems in place will definitely help.

We have only seen one instance of bed bugs in all the history of tenants that have been our guests. It occurred in a two bedroom unit where the guest reported the bed bugs to us. We learned that you should hire the best pest control company you can right away, even if it’s delayed by a day or two. It’s better to resolve this properly, even if it costs you some revenue.

Before a unit is sprayed, cleaners should strip the beds, vacuum and clean the unit, and while doing it they should be wearing gloves and masks. We originally thought we would have to throw out all the linens in the unit, but that wasn’t necessary. Just bag the linens up and mark them as contaminated, the cleaners will wash them in extreme heat in order to eliminate the infestation.

Sadly there is no guaranteed fix for bed bugs. In order to get a heat treatment on the unit we had to hire a company that can drain the fire sprinkler system. The outlets should also be dusted in the adjacent units because bed bugs move quickly and get into the walls as well.

Another major lesson is to notify your insurance company immediately, and if possible you should be insured specifically in the event of bed bugs.

All told, this one problem took between 40 and 50 hours to resolve. There is a lot of coordination involved with a number of different people. Students now have access to the process we’ve put together to handle this situation.

If we include lost revenue, the total cost of the whole episode was around $15,000. Now that there is a process in place to handle things, the cost would probably be around $7,000 to $8,000. Even if you have insurance, this isn’t something that you’re going to be able to wait for them to pay for things. You will need the funds in place to take care of things in the meantime.

  • Did the insurance reimburse everything?

No, you will be reimbursed charges related to cleaning. One of the mistakes we made was not separating our linens, this meant that we had to pay for extra cleaning to make sure we didn’t contaminate other people’s linens. It’s also very possible that you would have to replace furniture as well, we got lucky in that case.

  • How do you recover from bad reviews because of an instance like bed bugs?

Bad reviews can be a challenge, but there are ways you can mitigate their impact. When you’re trying to recover from bad reviews, and there are a number of situations that can lead to one, one of the ways is to accelerate the frequency with which you can generate a review. The best way to decrease the impact of bad reviews is to reduce the maximum length of stay. This will generate a number of shorter stays and more frequent reviews, which will push down bad reviews on your listing.

  • Is there a way to create a market report on a listing that I don’t currently manage so that I can start to understand the owner might be having difficulty?

Most people in the short term rental space don’t actually have a grasp on what it takes to run the business well. Right now you don’t have to be good, you just have to be present. Over time, as this marketplace matures you’re going to have to be good and the ones that are will build the brand that they want to and get the kinds of customers they deserve.

If you want to be able to run a report on a property that you do not control or manage AirDNA is your best bet. You should be looking for trend data for the particular market you’re looking into and compare the listing to the surrounding area. If performance is poor on the property, it may be as simple as being on the wrong platform.

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