The travel industry has been evolving for a few years now. What used to be unreliable hotels or expensive stays with basic facilities has undergone a major transformation. And this applies to the hotelier and client as well.
Travellers are opting for offbeat destinations and experience stays over the mainstream options. Property owners are also creating exclusive experiences for their customers to stand out from the competition.
Out of all options, short term vacation rentals seem to be winning from both ends. Travellers love them as they offer many benefits over traditional hotels, and this means they are a better investment option for Home Owners too.
But what about running and managing the property?
While many Home Owners like to manage the stay themselves, some choose to go down the managed stays option by hiring rental operators.
Are you considering letting your second home out for managed stays? What do you think will be the most suitable option for you and why?
Let’s tackle this dilemma methodically.
DIY Vacation Rentals vs Rental Operators
In a previous piece, we spoke of how the vacation rental industry is entering a new era, especially in India. The pandemic has given birth to a new generation of guests who value customer service above anything. And in this industry, how you manage your properties forms a major part of the customer’s impression of your service.
So, which way do you go? Should you do it yourself, or is it better to hand it over to a management firm?
Let’s take a look.
DIY Vacation Rentals
What is in store for you if you choose to manage your vacation rental property yourself? We spoke to some Home Owners from our trusted circle and found out. Let’s take a look.
Pros of DIY Vacation Rental
- Flexible business model – If you choose to take over the management of a vacation rental, there is no one you are accountable to. You can choose the rates based on your convenience, choose when you keep it operational and even use it for personal/family uses. If you want this flexibility, it is better to do this yourself unless you find a management firm that is flexible as well.
- Control over guests – This is a very important criterion for many Home Owners. Many want complete control of who uses their property, and that is a fair ask as well. You have picked out a property and furnished it with care, you would not want that to get damaged at any cost. If you are managing the property, then you can be assured that you only allow people you are comfortable with. Enforcing this with a rental operator may be a little tough and would need constant micromanagement.
- Work in hospitality and be your boss – As we mentioned, some people love to work in the hospitality industry. But they also may not want to work under someone. In such circumstances, operating their vacation rental home is the best-case scenario.
If you live nearby, understand the basics of running and managing a property, and are willing to put in the time and effort, we say go for it!
Cons of DIY Vacation Rental
- Unexpected expenses – Managing a home is no easy task, especially when it comes to a vacation rental home. If you are new to the industry, you may not anticipate many expenses that crop up. You can account for regular maintenance works. But still, unexpected expenses can move your bottom line further away than you expected it to.
- Time-consuming – Even if you love the work and have no other jobs lined up, this work is extremely time-consuming. Your guests will need round the clock service, maintenance, and troubleshooting. Even when the guests are not around, the property needs seasonal maintenance. Admin tasks crop up too. Most Home Owners end up hiring individual servicemen or teams that may prove expensive.
- Fluctuating income – We assume that you expect a steady income from your vacation rental home since you are diving headfirst into it. But when you start, you run the risk of experiencing fluctuating income. In fact, for the first few years of a DIY vacation rental home, you may have to work with low rentals because of low marketing skills, higher operating expenses, and so on until you get the hang of it.
If you don’t want to contend with a long learning curve, we recommend working with a rental operator to optimise your income levels.
PROPERTY RENTAL OPERATORS
Pros of Property Rental Operators
- Steady Rental Income – When you work with a rental operator for your vacation rental home, you have a better chance of steady rental income. These operators have been in the game for a long time and have extensive knowledge of customer acquisition, pricing, and guest turnaround as well.
- Better upkeep of the property – The valuation of your property and long term gains from your vacation rental home depend on the upkeep of your asset. If the quality of the property deteriorates, then the valuation goes down too. Property rental operators understand maintenance in and out, and have specialised teams with industry know-how. So, instead of learning 10-12 disciplines, you can access these services via an experienced player.
- Higher ROI – We covered long term gains in the previous point, but even on a monthly or quarterly basis, property rental operators optimise your ROI numbers. Since they work systemically in bringing guests and minimising operating expenses including, maintenance and salaries, your ROI improves.
You can choose to partner with them or get a fixed rental from them per month/year and enjoy the benefits.
- Hassle-free management – Managing guests, handling the various statutory departments, working with brokers, and carrying the upkeep of the property is extremely strenuous. Why go through that when you can rope in the experts and employ a property rental operator?
Cons of Property Rental Operators
- Lack of control – This is a pain point for many Home Owners. As we discussed, a little earlier, people prefer having control over guests approval and even the day to day operations. Many rental operators choose to have autonomy over the properties they manage for efficiency. But, you can always set some ground rules so that both parties are happy.
- Lose the charm of a rental home – The vacation rental industry is booming because customers are foregoing the hotel experience and looking for a more personalised option. When you employ a rental operator, you run the risk of losing that charm and turning the home into a hotel. In such cases, we recommend vetting the operator beforehand and understanding their model of operation in detail. Most importantly choosing a rental operator who is constantly in touch, empathetic to your needs, interactive in communication and will only have the best in mind for your home.
Do you think you need a professional team to manage your vacation rental property? Reach out to us at partner@saffronstays.com, and our team will take it ahead.
