10 Mistakes VRBO’s Often Make – #5 will kill your business before it gets started

Managing a vacation rental by owner property can be challenging. There is so much involved in creating a profitable vacation rental business that getting it right from the start is tough — manageable but tough. It is more than learning from a few websites and hoping for the best; adopting a strategy for marketing and operating the business professionally from the outset can yield more income and occupancy than any adhoc approach.

These 10 points are a sample of the most common mistakes VRBO’s make. Maybe you have done one or two and maybe you are still. Being able to take a step back and observe your vacation rental business from back behind the trenches will give you a better perspective as to the areas you need to improve your strategy.

1. Not screening
Vacation homes are often seen as ideal ‘party’ venues for groups of young (and not so young) people. If you set your own restrictions on your property i.e. family groups only or no-pets, or as not suitable for young children, you’ll need to ‘screen’ potential guests to make sure they are a good match for your property. This simply means you need to talk to your guests — on the phone and not by email – to establish what they are looking for in a vacation rental and deciding whether you property is right for them, and conversely whether you want them in your property. Many first time owners get so excited about the first enquiries and bookings, they go for them without really thinking it through which can result in the potential for issues on arrival.

2. Listing with too many sites
There’s a gazillion listing sites on the web, all vying for your marketing dollars. Many of the newest sites will entice you in with a free listing and while there is nothing wrong with taking up these offers, think twice before you sign up with too many. Also make sure you are able to link back to your own website before you do. Remember that each time your business information changes (rates, amenities, photos) you will have to go to each site you’ve registered with and manually change the details.

Check out ‘Free Is Not What It’s Cracked Up To Be‘ for more information on free listings.

3. Thinking Craig’s List and Kijiji will bring quality clients
This is purely personal opinion but we have not yet had an enquiry via Craig’s List or Kijiji that has brought an acceptable application. The guests you are looking for will be looking for reputable sites to find listings of vacation homes and tend to use Craig’s List and Kijiji for last-minute or discounted offers. Let’s just say that on a hit-and-miss scale, they are mostly misses. In addition to this, scammers use these sites extensively and because of the media coverage surrounding some of these, advertising on these sites is seen with suspicion by many potential renters.

4. Taking a booking without a rental agreement
A well written rental agreement is essential for your peace of mind as well as your guests’. It records the period of the rental, check -in/check -out times, occupancy limits, pet policy as well as any other restrictions you place on a rental. It saves any misunderstanding as you can easily refer back to the signed agreement in the event of a dispute. Your ‘small print’ can go in a Terms and Conditions of Rental document that is signed along with the agreement.

5. Pricing too high….or too low
‘My neighbour rents for $2000 a week and his place is a shack compared to mine’. That may be the case, but before you rush to slap a high price on your property, take some time to evaluate more of the competition. Your neighbour may accept all-comers and easily get the money from ten 18-yr olds wanting a party venue, who don’t care they are being over charged. You, on the other hand, are probably looking for more responsible groups who will respect your property. When pricing, look carefully at what is advertised on agency and listing sites for properties in your area and evaluate the facilities and features of your competitors closely.

6. Taking the first booking that comes along
It’s exciting when an enquiry turns into a booking and you just want to grab it. Forget the fact there are 9 people and your place only sleeps 7 comfortably, and that they have got 2 dogs and you prefer to accept only one. Set your maximum occupancy levels and pet policy and any other restrictions you want to make and stick to them. You’ll feel much more comfortable turning a booking away because you haven’t compromised your decisions. And….there will always be more guests anyway.

7. Ignoring gut feelings
Sometimes a conversation with a potential guest just doesn’t feel right. The person might say something that makes you feel a little uncomfortable or they forget to tell you about a child or two in the initial application and it later comes up in discussion on the phone. The question, “How many cars can we park there?” can be an entirely innocent one if a small family is coming up at different times and may bring a couple of vehicles, however it could also mean a small wedding is planned they are conveniently forgetting to mention. If it doesn’t feel right, sound right or sit comfortable with you, it is always better to err on the side of caution and politely reject the booking.

8. Asking for payment on arrival
If you don’t take a deposit, and simply ask for payment to be made on your guests’ arrival, you run the risk of them not turning up, or arriving with a cheque you then have to clear through your bank which may not happen until they have departed. It is very difficult to ask your guests to leave and go back home if they ‘forgot to bring the money’ and promise to bring cash when you come back at departure time. Make sure you take at least 25% deposit on booking, and the remainder with enough time to clear through your account. This is standard practice in the industry, so if your guests don’t want to follow your procedures, you are probably better off without them. For very last minute bookings accept a money order sent to you by courier or expedited mail.

9. Sending keys in the mail
This was the old method of guests getting entry to the property but if you want to maintain security of your property, don’t do it. Giving guests a method of access before their appointed rental period opens up a lot of security issues — not least of which is them copying the keys and giving one to each group member. At the end of the season you could have a vast amount of keys in circulation. Instead, fit a keyless entry system, or use a lockbox, and set a new code for each guest. This way, once they have left the code is changed and they cannot use it again.

10. Supplying the barest minimum
The key to great rental income is in repeat guests and 5 star testimonials. The way to achieve both is by going above and beyond the competition. If you provide the barest minimum in the way of features and facilities, your guests will either be barely satisfied, or will complain after they leave. Expectations have risen significantly and what was seen as ‘luxury’ a few years ago, now is considered to be standard. I still hear the expression, “It’s just a rental” as if that excuses old and stained mattresses, clunky and rusted refrigerators, and grandma’s hand-made throws on the beds. This isn’t a dollar-store business — it’s a consumer driven tourism industry that is rapidly achieving main stream status as a vacation choice. It’s better to be on the leading edge of it, than in the bargain basement.

All vacation rental owners will experience a range of issues and it doesn’t take too long to get into the swing of enquiries, reservations, and rental agreements and finally, maximum guest occupancy. We all make mistakes along the way and wish we had done things differently, but each one is a learning point that just creates a better business along the way.

Please share some of your biggest learning points in the comments below.

About the author

Heather Bayer

  • Cher

    VRBO charged me $100 for extra insurance that really is fake insurance that you cannot activate against in the case of a loss.

  • Cher

    Yes, I’ve done all of these things. I just want to warn people that AirBNB and VRBO are no different than Craigslist, however they pretend to offer “insurance” and “security deposits” however they DO NOT.

  • randy and amy

    “It is really upsetting that VRBO does not seem very surprised or apologetic and their insurance only covers $5k in damages.”

    My point was that you suggest that the tenants were the fault of vrbo and somehow they let you down. VRBO is simply a conduit. A dating site for lodging. Sometimes you get a prince, other times a frog. They do require phone numbers and email which is a good way to investigate potential tenants. We had an attorney from NY inquire. We googled her and she was the party attorney. Every photo online was at a club. She wanted to rent with 8 friends… no thanks.

  • Theresa Kresser

    I have been renting my private home for five years, only in season. Which is December -March in Southwest Florida. Everyone wants to get out of the cold
    Well this year I had my second nightmare tenant. They booked in April of 2016 paid the down payment with credit card. Signed the rental agreement. Normal people will contact you a month before arrival this party was hard to get a hold of and when I did he asked about smoking, it is in the agreement Only Outside! They could only stay for two weeks they signed for one month. After their arrival they stayed one night, calling the next day around 4:30pm saying they could not stay. Asking for all the money back when the Contract clearly states 90 day cancelation. Out of good faith I reimburse them for the balance they paid at check-in.Last week they disputed the down payment and VRBO withdrew it from my checking account! Homeowners beware do not accept credit card payments
    After the damage done last year and the BS this year I’m done! I don’t recommend VRBO they are scamming Homeowners.

  • Zahid Hussain Khan

    check this website http://www.a1vacationhomes.om

  • Davenna Greathouse Trahan

    So how do you find out if it stolen??

  • c.Katelier

    Yes, beware! Airbnb doesn’t screen well-we were robbed by our renters and they took everything, even art on walls, appliances, furniture, everything–and Airbnb only paid us 75% of what we lost after months of us trying to get Airbnb to do the right thing–they kept hanging up on us and I finally threatened them with a legal fight–they finally paid, but we still lost lots of $$$.

  • Dave

    How much of a cleaning fee do you charge?

  • Dave

    How do the VRBO fees work? I read on the web that they don’t charge guest fees, so how do they make their money? I am new to the vacation rental cottage business.

  • Dave

    What is the cheapest option for vacation rental insurance? So far the couple of agents I contacted only offered me Lloyds of London, which was three times the price of the landlord insurance we are currently paying.

  • Clary Roberts

    I took out a commercial liability policy which replaced my homeowners policy and covers guests.

  • CJP

    I have a vacation rental and just had nightmare renters. I had a rental agreement, they broke rules on day one. I asked them to leave, but they agreed to comply with our rules so we let them stay. This was supposed to be a week rental, they continued to have too many people at the house (we live next door), break other rules, and finally set our grill on fire to where the fire department and police had to come. When trying to get them to leave, I was physically assaulted. The police said I had no rights in “evicting them”. Is this correct? I live in CT.

  • Our cleaning fee of $200 is standard. Why do you ask?

  • Dave

    My family is converting a rental house to a vacation rental, and I was trying to get a perspective on what people charge. Is it acceptable to take a refundable $200 cleaning fee, and also take an authorization to bill a credit card for a lot more, in the even there is damage?

  • A cleaning fee and deposit are standard charges for vacation rentals. Check the listings in the area to see what other homes are charging in your area to make sure you’re competitive. And don’t hesitate to ask for referrals for cleaners. Standard total charges are rent, cleaning, deposit, listing site fees and taxes if tot taxes are required in your area.

  • Dave

    Picture ID of person must match name on visa, and also picture of person taking picture. This is the same procedure store merchants use when verifying identity in person. I would ask them to email you an image of themselves, and their driver’s license.

  • Love Luxury Homes

    Dave, the cleaning fee should be included as part of the price – the total – ie. included in the rate. All professionally managed homes (or even the ones where owners manage it professionally) offer either a daily cleaner or weekly in the worst case scenario. But for the past 12 years the most successful rentals, had a cleaner Mon-Sat or Mon-Fri, as standard. We do this as “standard” because not only is a more professional and pleasant experience for the guest, but the owner also has peace of mind. Cleaning should never be optional – be professional, like in a hotel.. 🙂

  • Frank Miller

    Here I have found a website for Vacation Rentals with no booking Fee http://www.findamericanrentals.com

  • samandsandy

    I am just in the thinking about stage but I wondered if you can request their social media account names ie facebook along with contact information prior to the rent occurring. Thx

  • Teresa Cumber

    I crashed their party!!! There was a reservation for 5. I got a text from a neighbor saying you have 15 guests plus and 5 cars in the driveway!! I crashed the party!!! Made sure only 5 guests stayed in the cottage and the rest went to sleep in their cars and stayed at the cottage.

  • Harry Jones

    I have recently listed my property on https://www.findamericanrentals.com/ and received couple of inquiries, Lets see how I do with them however I am still searching for some vacation rental website where I can advertise and I can pay annual subscription.

  • JC

    I haven’t rented my property yet but have been advised to take anything small and of any value out which I plan to do. The place is well-furnished so all that will stay. The rest I will have to learn as I go but I am also a landlady so have some experience with annual tenants

  • George & Sue

    We are just starting (actually close at the end of September. Where do we start? We have a beautiful cabin with lots of amenities but it is small (1000+ sqft) and we are greener than the three acres on which it sits…

  • Harry Jones

    I did little research and found this website https://www.perfectstayz.com

  • Peter Silano

    I have my listing with lakehouse.com. Could not be satisfied. Pay a small set fee for the year which includes my photo’s. They send the potential renters e-mail to me thru their site with any questions and I can either answer by return e-mail or phone them. The site is super simple to list on and simple to use. The thing we like is that they are our listing site. The rest as far as the booking, payments, and everything else it is done by us. My wife and I have a simple motto. We treat every guest the way we would want to be treated. Keep the rental clean and always make their visit as pleasant as we can. Simply show them that you care that they are staying at your rental. For us it works better then we ever expected.

  • Peter Silano

    I use lakehouse.com. They have a few other websites that have a small annual fee. I have a posting on this blog which you can read